Oracle Just Hit an AI Power Wall. This Pipeline Giant Builds Its Way Around It.

Research Desk · September 25, 2026

Downtown Tulsa, Oklahoma, where Williams is headquartered at One Williams Center. Photo via Wikimedia Commons.

The most important AI story this week had nothing to do with chips.

On Thursday, Oracle sent a force majeure notice to its financing partner on Project Jupiter, a 2.45-gigawatt Stargate data center campus in New Mexico. The shares slid.

The culprit was plumbing. A natural gas pipeline meant to fuel the site has been pushed back roughly six months, to February 2027, and an air permit for the on-site power equipment is still waiting on state regulators.

Oracle says the project remains on its planned schedule. But the notice itself tells investors something important.

The bottleneck in artificial intelligence has moved from the chip to the electricity, and to the fuel behind it.

That is where Williams Companies (NYSE: WMB) comes in. It is one of the few companies in America that already owns the gas, the pipes, and a proven playbook for turning both into power at the data center's front door.

The Toll Road Under the AI Boom

Most people have never heard of Transco, but a large share of the East Coast depends on it. It is Williams' flagship pipeline, running roughly 10,000 miles from the Gulf Coast to New York City.

Williams says its full network touches about a third of the natural gas used in the United States.

Think of it like owning the interstate highway rather than the trucks. Williams does not need gas prices to be high. It collects a fee on every unit that moves through its system, largely under long-term contracts with utilities and industrial customers.

That is why the business has held up through gas booms and gas busts alike. The toll gets paid either way.

The Second Business: Power in a Hurry

The newer and faster-growing piece is what Williams calls Power Innovation.

Here is the problem it solves. A tech company can build a data center shell in about a year. Getting a new high-voltage hookup from the local utility can take many years longer.

Imagine opening a restaurant and being told the city cannot run a gas line to your kitchen until 2030. You would pay handsomely for someone who could park a working kitchen out back next month.

That is Williams' pitch. It builds natural gas power plants right beside the data center, fed by its own pipelines, and signs the customer to long-term contracts. Reported terms on early projects run 10 years and are extendable.

The first project, known as Socrates, serves a Meta-affiliated data center in New Albany, Ohio. Its first phase, about 200 megawatts, entered service in under 18 months from commercialization, on time and within budget. Phase two is on track for completion by year-end.

Williams now has five of these projects commercialized, including a 682-megawatt plant, and management says more are expected before the end of the year. In a week when a flagship AI campus is waiting on someone else's pipeline, that track record is worth a great deal.

The Numbers Behind the Story

The second quarter showed a business accelerating from an already large base.

Adjusted EBITDA reached $1.92 billion, up 6% from a year earlier. Available funds from operations, the cash that actually pays the dividend, rose 10% to $1.45 billion.

Management lifted its full-year adjusted EBITDA guidance by $200 million at the midpoint, to roughly $8.4 billion. It also raised its long-range growth target to 11% or more a year through 2030, up from 10%.

Williams is adding to the highway, too. It agreed to acquire Momentum Midstream for up to $5.5 billion, adding more than 4,000 miles of pipe that connect Louisiana's Haynesville gas field to Gulf Coast export terminals and power demand.

To fund the power build-out without straining its balance sheet, Williams brought in Blackstone as a partner, adding about $5.34 billion of low-cost capital.

A Dividend Built on Cash, Not Hope

For income investors, the headline number is the dividend. Williams pays $2.10 a share a year, $0.525 a quarter, after a 5% raise this year. At about $70.50, that works out to a yield near 3.0%.

More important is how well it is covered. Cash flow covered the dividend 2.26 times in the latest quarter, which leaves plenty of room to keep raising the payout while funding growth.

Leverage has also been moving the right way, with debt at about 3.7 times adjusted EBITDA, down from 3.8 times a year ago.

Risk Factors

No investment is without risk, and Williams has a few worth knowing before buying.

The yield now trails Treasuries. With the 10-year Treasury at about 5.19%, its highest level since 2007, a 3% dividend no longer wins on income alone. The case for Williams rests on the dividend growing over time, not on today's check.

Higher rates raise the cost of building. Williams expects $7.3 billion to $7.9 billion of growth spending this year. If rates keep climbing, financing that work gets more expensive.

Permits cut both ways. The same regulatory delays that stalled the New Mexico pipeline can slow Williams' own projects. Construction costs and policy shifts are real risks to the timeline.

The price already reflects some of the story. Shares trade near 28 to 31 times trailing earnings, roughly double the typical pipeline peer. The stock traded as low as $56.19 within the past year, about 20% below today's price. That is the bear case with a number attached.

The Bottom Line

Every major technology cycle eventually runs into a physical limit. For AI, that limit has turned out to be power.

This week's headline from New Mexico showed how costly a single delayed pipeline can be. Williams is on the other side of that problem: it owns the pipes, it owns the gas access, and it has already shown it can deliver a power plant faster than the grid can.

Wall Street's average price target sits near $86, about 22% above the current price. Meanwhile, investors collect a well-covered, growing dividend while they wait.

For a retirement portfolio that wants exposure to the AI build-out without betting on which chip or chatbot wins, Williams offers something rare: a stake in the boom that gets paid in cash every quarter.