Demand for Gas Turbines Remains Strong Despite AI Advancements

The demand for gas turbines is projected to remain robust even as data centers reduce their electricity consumption, according to Mitsubishi Heavy Industries' (MHI) CFO.

Amidst market fluctuations driven by the emergence of Chinese AI DeepSeek, MHI remains confident in its turbine business. CFO Hisato Kozawa believes that even an efficient AI would not alter the projected increase in global power demand.

"I find it somewhat encouraging that our company is now recognized as AI-related," said Kozawa, referring to the recent DeepSeek-induced sell-off.

MHI's positive outlook is supported by its record third-quarter earnings and annual forecasts. Strong demand for gas turbines in power plants has been a primary driver of these results.

The company has raised its net profit forecast for fiscal 2024/25 to 240 billion yen ($1.55 billion), surpassing its previous guidance by over 8%. In addition to gas turbines, growing orders for jets, naval ships, and missiles amidst Japan's defense build-up have contributed to MHI's financial success.

Despite a slight decline from the previous day's close, MHI shares remain elevated, having more than doubled in value over the past year.