FTAI's stock surges as it enters the data center business
FTAI Aviation (FTAI) launched a new platform on Tuesday called FTAI Power that will focus on converting CFM56 engines to power turbines that it says can be used to deliver reliable energy to data centers across the globe.
The company is promoting the solution as being cost-efficient and scalable, which are priorities for hyperscalers.
FTAI said that it is in a strong position to bring new power turbine to market because it is one of the largest aftermarket maintenance providers and one of the largest owners of CFM56 engines.
Production is expected to begin in 2026.
“The CFM56 engine market is the largest and most reliable in the world, making it an ideal candidate for aeroderivative conversion which will further extend the engine’s life,” FTAI chairman and CEO Joe Adams said in a statement.
“At FTAI, we have over one million square feet of maintenance facilities globally and billions of dollars of engines which we believe gives us unrivaled capabilities.
Adams noted that the plan has been in development for over a year and once it begins production of the FTAI Power aeroderivative, it will offer the market "an alternative to address the unprecedented need for electricity.”
An aeroderivative gas turbine is a lightweight engine derived from aircraft jet engines that can then be adapted for land or marine use. They are known to provide a significant amount of power quickly.
Based in New York, FTAI owns, leases, and services aircraft and aircraft engines, with a focus on the CFM56, the best-selling commercial aircraft engine in aviation history, used in both Boeing and Airbus fleets.
The company's stock gained 13.4% on Tuesday and has surged 36.4% for the year.
FTAI found itself in a unique position this year among other aviation companies by the fact that the nature of its business is to rebuild used engines, which made it essentially immune to President Trump's tariffs.
And Adams said earlier this year that demand for rebuilt engines remains strong across the industry, giving FTAI flexibility to sell to a wide range of third-party customers.
The company said that the aeroderivative adapted from the CFM56 engine will provide a 25-megawatt unit that offers grid operators increased flexibility and "finer output control" than larger units provide.
“FTAI Power is built on the core belief that the future is electric and that the CFM56 engine will play a key role in delivering much needed power to the world,” David Moreno, chief operating officer of FTAI, said in a statement.
“The accelerating demand from AI hyperscalers has created an urgent need for immediate power solutions."
"We believe FTAI Power will be a critical partner for the AI economy, which requires unparalleled amounts of electricity faster and in a more flexible format," Moreno added.
According to an analysis from McKinsey & Co., the power demand for data centers is expected to reach 1,400 terawatt-hours by 2030, equivalent to 4% of total global power demand.
The United States alone will need to more than triple its annual power capacity over the next five years, according to McKinsey, increasing from 25 GW of demand in 2024 to more than 80 GW in 2030.
The global demand for energy is expected to reach 230 GW by 2030, McKinsey said.