When "aircraft engines" become the target for "data center power supply"

In the arms race of AI computing power, every engine of the economy is drawn into this battle—including jet engines.

As Silicon Valley giants anxiously seek stable power sources, an unexpected solution is crossing over from the aviation industry: retrofitting retired Boeing passenger plane engines into ground gas turbines to directly power data centers.

With the exponential growth in power demand from AI data centers, the lag in expanding traditional power grids has become a common enemy of the industry. In this context, companies like FTAI Aviation and ProEnergy are accelerating the "dimensional reduction" of aviation power assets into the electricity market. This cross-industry experiment not only changes the fate of retired aircraft but also reshapes the global supply landscape of distributed energy.

The Premium of Speed: Spot vs. Long Cycle

In the field of power equipment, time is money. Currently, the global gas turbine market is dominated by the "big three": GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries (MHI), which together hold about 80% of the market share. However, due to surging demand, these giants have long lead times for large heavy-duty gas turbine orders, extending for several years.

This supply-demand mismatch provides a window for aviation asset management companies like FTAI Aviation. FTAI President David Moreno pointed out that retrofitting an aircraft engine into a power turbine takes only 30 to 45 days. Although the initial design and adaptation take about 18 months, once the retrofit process begins, its delivery efficiency far exceeds that of traditional energy giants.

This "spot advantage" has triggered a strong resonance in the capital market. Since announcing its entry into the electricity business, FTAI's stock price has risen by about 42%. Jefferies estimates that this business could contribute $750 million in EBITDA annually to FTAI, which is equivalent to 52% of analysts' previous total annual expectations.

Dimensional Reduction Strike: From "High-Pressure Takeoff and Landing" to "Stable Power Generation"

Converting aircraft engines for land-based power generation (Aeroderivatives) is highly feasible from a technical standpoint.

Aviation turbine expert Mark Axford pointed out that the core of the retrofit involves two key changes: first, replacing the fuel nozzle to enable burning natural gas instead of aviation kerosene; second, replacing the large front flight fan with a smaller fan more suitable for power generation.

From the perspective of asset lifespan, this resembles a precise "residual value reconstruction." Narrow-body aircraft engines (such as the CFM56 used in Boeing 737s) must endure high-pressure stress from frequent takeoffs and landings, while once converted to ground power generation, the wear and tear they experience significantly decreases. FTAI can extend the usable life of aviation parts with only a few years of remaining lifespan to several years in the power generation field.

Currently, this sector has attracted multiple players: ProEnergy is retrofitting engines from Boeing 747s; startup Boom Supersonic also plans to deliver its retrofitted gas turbines to AI data center service provider Crusoe in 2027

Efficiency Game and Supply Chain Butterfly Effect

In the face of the invasion of new forces, GE Vernova CEO Scott Strazik candidly stated in a recent earnings call that he does not believe these small units pose direct competition. The core of his logic lies in "efficiency": over a 20-year operational cycle, the fuel efficiency advantage of heavy-duty gas turbines remains the financial core for data center operators.

However, market research firm Thunder Said Energy points out that while heavy-duty gas turbines are more efficient, they are expensive and have long waiting times. To compensate for the efficiency shortfall, FTAI and Boom Supersonic have proposed that their products can be configured in a "Combined Cycle" mode, capturing waste heat through steam turbines to approach the efficiency of heavy-duty units.

The more profound impact lies in production capacity scale. Jefferies analyst Sheila Kahyaoglu noted that approximately 1,600 commercial engines are retired globally each year, and if one-third of these are converted for power generation, it would add 13GW of capacity, equivalent to a quarter of the global annual production capacity. The U.S. Energy Information Administration (EIA) even estimates that the potential conversion capacity of retired military engines could reach up to 40GW.

However, this capacity transfer is not without risks. If a large number of aviation components are diverted to the power sector, it could further exacerbate the already extremely tight aviation maintenance market shortage, leading to a chain reaction on the operating costs of global airlines