Meta Platforms, the parent company of Facebook, announced on Monday that it has reached an agreement to purchase geothermal energy from Sage Geosystems for its data centers in the United States.

This initiative is part of Meta's efforts to enhance its infrastructure in response to the growing energy demands associated with its significant investments in artificial intelligence.

The initial phase of the 150-megawatt project is expected to be operational by 2027 and aims to greatly increase the utilization of geothermal energy across the country. While the specific site for the project has not yet been finalized, it will be located east of the Rocky Mountains.

The financial details of the agreement remain undisclosed. Geothermal energy, a renewable resource harnessing the Earth's internal heat for electricity and hot water, can generate enough power to supply approximately 38,000 homes with 150 megawatts.

This announcement coincided with a U.S. Department of Energy event focused on geothermal advancements, as the Biden administration encourages major tech companies to invest in clean energy solutions to meet their rising electricity needs.

This demand surge is largely attributed to the growing use of technologies such as generative AI, which necessitate substantial electricity for data center operations, potentially hindering the administration's goal of decarbonizing the power sector by 2035 to combat climate change.

Houston-based Sage, a startup founded four years ago, is developing innovative technology that can be implemented in more locations than conventional geothermal systems, which depend on naturally occurring hot water reservoirs and currently contribute to only 0.4% of U.S. electricity generation.

Sage is supported by oil and gas companies Chesapeake Energy and Nabors Industries, along with venture capital firms Virya and Helium-3 Ventures. This project represents Sage's most significant undertaking to date, having validated its technology in the field just two years ago.

A spokesperson for Meta informed Reuters that the company anticipates the energy generated by Sage Geosystems will contribute to the power grid, rather than being directed to any particular data center.

In recent years, Meta has been actively working to upgrade and expand its infrastructure to support its initiatives in generative AI, modifying its data centers to accommodate the types of chips that are optimal for AI tasks. This focus on AI has led to a notable increase in the company's expenses.

Last month, Meta projected that its capital expenditures for 2024 would range from $37 billion to $40 billion, while also warning that infrastructure costs would remain a "significant driver" of expense growth in 2025.