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AI data centers cornered the gas turbine supply — now fertilizer plant repairs are physically blocked
On April 7, a ceasefire with Iran was agreed and the Strait of Hormuz is expected to reopen. Oil futures fell and stock markets rallied.
But reopening the strait doesn't fix destroyed factories.
Roughly half the world's fertilizer is produced as a byproduct at Persian Gulf oil and gas plants. The 39-day war destroyed many of these facilities. Repairs are expected to take 3–5 years.
Why so long? Follow the supply chain, and you arrive at an unexpected destination: AI data centers.
Qatar's Ras Laffan Industrial City is the world's largest LNG export hub. Natural gas refined here has produced ammonia and sulfur — fertilizer feedstocks — as byproducts.
Iran's retaliatory strikes hit Ras Laffan, instantly eliminating 17% of Qatar's LNG export capacity. Repairing the facility requires replacing its core component: large gas turbines.
Only three manufacturers in the world can build these turbines: GE Vernova (USA), Siemens Energy (Germany), and Mitsubishi Heavy Industries (Japan).
The chokepoint narrows further. The performance-defining component of a gas turbine is the "single-crystal turbine blade" — engineered to withstand temperatures exceeding 1,600°C. Manufacturing these blades requires a specialized process called "directional solidification casting" in purpose-built furnaces. Building a furnace and obtaining quality certification alone takes 2–3 years. Constructing a casting facility from scratch takes 4–6 years. The physical time required for metal to cool and crystallize cannot be shortened with money.
The super-heat-resistant alloy (nickel-based and cobalt-based superalloys) master ingots that form the raw material for these single-crystal blades are manufactured and supplied by Japan's IHI Master Metal. The company holds a near-monopoly in this field. There are three gas turbine manufacturers, but the heart of all three companies' turbines depends on master ingots from this single Japanese company.
According to energy research firm Rystad Energy, these three manufacturers were already carrying 2–4 years of backlog before the war. No matter how much money Qatar's government invests, gas turbine delivery is physically queued.
So where did this 2–4 year backlog come from?
Since 2023, surging power demands for training and running large language models drove AI companies to race in building massive data centers. To supply power, each company rushed to build gas turbine power plants.
The "Stargate" project in Abilene, Texas — backed by OpenAI, Microsoft, SoftBank, and Oracle — was initially planned at 1.2GW but eventually expanded to approximately 5GW, rivaling a small country's national power grid. Developer Crusoe ordered 10 GE Vernova gas turbines in December 2024 and another 19 in June 2025. Elon Musk's xAI ordered up to 60 gas turbines for its Memphis supercomputer facility.
The result of this AI procurement race: gas turbine prices surged 195% compared to 2019, and production lines are fully booked through 2029.
Then, in February 2026, the war began.
Ras Laffan was hit, eliminating the supply of ammonia and sulfur — fertilizer feedstocks. Repairs require gas turbines. But gas turbines are booked through 2029 by AI data center orders.
Strictly speaking, AI data centers are ordering aeroderivative (aircraft-derived) small turbines, and their final assembly lines differ from the large turbines used in LNG facilities. However, the heart of both — the single-crystal blade material, IHI Master Metal's master ingots — is drawn from the same pool. When massive orders for small turbines consume the material supply, large turbine material and casting capacity get squeezed. The competition isn't at the assembly line level — it's at the most fundamental layer: raw materials.
The power infrastructure needed to ask ChatGPT "What should I have for dinner tonight?" is physically blocking the restoration of fertilizer feedstock production that grows that dinner's ingredients.
Beyond the turbine competition, AI's business model itself is under pressure.
Structural rise in energy costs. Oil exceeds $100, and electricity accounts for 30–50% of data center operating costs. Strait of Hormuz transit fees are expected to become permanent, and rebuilding destroyed Middle Eastern facilities will take 3–5 years. Cheap energy won't return for years. As the electricity cost per ChatGPT response rises, the $20/month subscription becomes unprofitable. Raise prices and users leave; don't raise them and losses mount.
Evaporating investment capacity. War expenses from the Iran conflict, signs of global recession, trade contraction from tariffs. Spare capital for AI investment is disappearing. In March 2026, Oracle and OpenAI abandoned their plan to expand Stargate from 1.2GW to 2.0GW. OpenAI lost $5 billion in 2024 and is projected to accumulate $44 billion in losses by 2029, when it hopes to break even.
Collapse of trust. The Epstein files surfaced the names of Elon Musk (xAI), Bill Gates (Microsoft/OpenAI backer), and Larry Summers (former OpenAI board member).
Legal constraints. The Anthropic v. Department of Defense case (April 30) may rule that government-compelled military use of AI companies is illegal, eliminating a portion of government-driven AI demand.
Collapse of Middle Eastern AI infrastructure plans. AI data center complexes planned for Saudi Arabia and the UAE lost their foundation as the war destabilized Middle Eastern energy supply.
Should gas turbines power food or AI?
Without AI, people survive. Without food, people die.
But in reality, AI companies' purchase orders are already in manufacturers' production queues. Under market economics logic, whoever pays first gets the turbines first.
This is not a problem the market should be left to solve. A political decision by governments to intervene in gas turbine delivery order is necessary.
In this structure, Japan occupies a unique position.
One of the three gas turbine manufacturers is Mitsubishi Heavy Industries. And IHI Master Metal — which supplies the master ingots of super-heat-resistant alloys at the heart of all three manufacturers' turbines — is a Japanese company. Japan controls the most upstream point in the global gas turbine supply chain.
A Japanese government policy on master ingot supply priority would directly affect the global prioritization between AI infrastructure and food production recovery. The legal basis already exists. Japan enacted the Economic Security Promotion Act in 2022 and designated "fertilizer" as a specified critical material in December of that year. The justification and legal framework for intervening in master ingot and gas turbine supply order to restore the fertilizer supply chain already exist.
Simultaneously, Japan can maintain a unique diplomatic channel with Iran. Japan did not attack Iran. Since the ceasefire, Japanese vessels are already transiting the Strait of Hormuz. Combining the leverage of gas turbine material supply with diplomatic relations with Iran, Japan has a path to independently securing its own energy and food security.
Reference: Gas Turbine Supply Chain Priority Debate (PDF)
Fact-finding for this article was conducted using Gemini Deep Research. Structural analysis and writing were done using Claude (Anthropic).
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