Key Takeaways
- Anthropic reportedly agreed to pay $3.4 billion to take over 1.7 gigawatts of Caterpillar gas generator orders that OnePWR Solutions needed financing to complete.
- For Caterpillar, the win is a buyer that can pay for an order it has likely already counted, and that buyer is heading into one of the largest IPOs on record.
- The deal is roughly the size of Caterpillar’s entire third-quarter power generation sales of $3.42 billion, though the $3.4 billion may also cover installation.
Anthropic is heading into its IPO with a $3.4 billion power purchase, and the generators come from Caterpillar (CAT).
On Sunday, the Financial Times reported that Anthropic agreed in late September to pay $3.4 billion for 1.7 gigawatts of Caterpillar gas generators. OnePWR Solutions, a San Antonio developer of on-site power plants, ordered them about two years ago but needed financing to complete the purchase.
That’s a much better buyer to have on the other end of an order.
Same Generators, a Far Better Buyer
Anthropic first planned to buy power from OnePWR. Instead, it took over the Caterpillar orders itself, along with the engineering and construction work to install them. It didn’t buy OnePWR. Anthropic and OnePWR declined to comment to the FT, and Caterpillar hasn’t commented.
The buyer can pay. Anthropic held $131.8 billion of cash and short-term investments at Sept. 30, and its IPO filing on Tuesday has it selling up to $62.5 billion of new shares, at $70 to $78 apiece.
Caterpillar’s Earnings Ramp Looks Safer
Analysts already expect Caterpillar’s normalized EPS to roughly double, from $19.06 in 2025 to $38.69 in 2028, as its power business ramps:
An order placed two years ago is most likely already in Caterpillar’s record $78 billion backlog, so I wouldn’t expect this news to move those estimates. What it improves is the odds that this piece of the backlog actually ships and gets paid for.
And it’s a big piece. Caterpillar’s power generation sales were $3.42 billion in the third quarter, up 30% from a year earlier, so this one deal is about a full quarter of that business. Total revenue has climbed to $20.7 billion a quarter:
(The FT didn’t say how the $3.4 billion splits between equipment and installation, so Caterpillar’s share is likely smaller than the headline number.)
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The Older Price Matters Less Than the Place in Line
OnePWR ordered two years ago, and Caterpillar has booked favorable pricing since. Escalators on long-dated orders may close some of that gap, but the terms aren’t public, so the margin on these units is an open question. Either way, EBIT margin is back above 20% for the last two quarters, up from 17.8% a year earlier:
(Tariff refunds helped: $392 million in the second quarter and $128 million in the third.)
Anthropic was really paying for a spot in Caterpillar’s queue. CEO Joe Creed said on the October 29 call that large gas engines for prime power are booked into late 2028 and 2029. An AI lab paid $3.4 billion to take over another company’s place in line rather than wait, and Caterpillar has said its long-dated orders carry price escalators.
Caterpillar Wins on Who’s Paying
I’d count this as a clear win for Caterpillar shareholders, especially after last week’s 10% drop despite a record backlog. An order that once depended on a developer’s financing now has an AI lab with $131.8 billion of cash behind it. The risk is concentration: Caterpillar’s power growth leans on data center spending, and Texas Gov. Greg Abbott ordered a pause on data center permits in September. Caterpillar’s fourth-quarter report, expected in late January, will show whether the backlog keeps growing past $78 billion.
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