Forget the Industry Labels: Chevron and Caterpillar Are Both Betting on the AI Power Boom. Which 30+ Year Dividend Grower Wins?

Caterpillar (CAT) and Chevron (CVX) are both major industrial companies, but they are each taking a different approach to meet the growing demand for electricity from artificial intelligence (AI) data centers. While Caterpillar is better positioned to provide the necessary power now, Chevron's long-term growth strategy could make it an attractive option for dividend investors.

A key challenge for AI data centers is that their electricity demand is substantial and the power grid struggles to meet that demand. Caterpillar has a competitive advantage in this area, as it manufactures generators that can supply electricity in remote locations. These generators can be used as backup power or as primary power in AI data centers when a grid connection isn't available, allowing the facilities to come online more quickly.

Caterpillar's backlog at the end of the second quarter of 2026 reached a record $72 billion, up 92% year-over-year. This strong performance is due in part to the company's generators, which are essential for building AI infrastructure. However, Caterpillar is not solely focused on power generation. The company also manufactures earth-moving equipment, which is vital for constructing AI infrastructure.

Chevron, on the other hand, is taking a different approach. It has entered into a deal with Microsoft to build a natural gas power plant specifically designed to serve a data center. This power plant agreement comes with a 20-year power contract. Although Caterpillar also supplies generators to Chevron's project, the key difference is that Chevron is working to create a business model that generates consistent revenue year after year for decades.

If Chevron can replicate this deal with Microsoft, it could lead to long-term growth for the company.