TLDR: Baker Hughes CEO Lorenzo Simonelli announced that the company’s resilience in 2025 will be significantly driven by the rapid expansion of artificial intelligence, which is boosting power demand and industrial activity. Despite this, the company anticipates a high-single-digit decline in global upstream oil and gas spending, with oil-related investments remaining subdued due to market oversupply concerns. Baker Hughes is confident in exceeding its data center order targets, leveraging AI-driven productivity gains to achieve ambitious financial goals by 2028.
Baker Hughes, a leading energy technology company, expects its resilience in 2025 to be primarily propelled by the burgeoning growth of artificial intelligence, according to CEO Lorenzo Simonelli. Speaking on Friday, October 24, 2025, Simonelli highlighted that the global macro environment is set to remain robust throughout 2025, even in the face of geopolitical and policy challenges. This resilience is largely attributed to the rapid deployment of generative AI, which is significantly driving increased power demand and industrial activity.
Simonelli expressed strong confidence in Baker Hughes’ ability to surpass its initial three-year target for data center orders, projecting to reach $1.5 billion ahead of schedule. This optimism stems from the sustained strong momentum observed in data center power demand. The company’s Industrial & Energy Technology (IET) segment has already secured $4.1 billion in orders during the third quarter of 2025, contributing to a record backlog of $32.1 billion. Power generation orders alone exceeded $800 million in Q3, with data center power solutions accounting for over $700 million year-to-date.
Despite the positive outlook driven by AI and data center demand, Baker Hughes maintains an unchanged forecast for 2025 regarding global upstream spending, anticipating a high-single-digit decline. Simonelli cautioned that oversupply concerns in the oil market are impacting sentiment, with several OPEC+ members still struggling to meet their production quotas. Consequently, oil-related upstream investment is expected to remain subdued until the market effectively absorbs the group’s additional supply. Early indicators suggest that 2026 will likely see continued subdued activity and spending reductions before a gradual recovery begins, particularly in international and offshore markets.
Financially, Baker Hughes reported an adjusted EBITDA of $1.24 billion for Q3 2025, surpassing guidance with a 2% year-over-year growth. The company has raised its full-year adjusted EBITDA midpoint to $4.74 billion. Looking further ahead, Baker Hughes has set ambitious targets for 2028, aiming for 20% company margins and at least $40 billion in IET orders. Management is confident in achieving these goals, citing a strong backlog and pipeline across LNG, gas infrastructure, power, and new energy sectors, alongside business-system improvements, AI-driven productivity gains, and portfolio optimization efforts, including approximately $1 billion in disposals.
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The company also noted strong demand for its NovaLT turbines, expecting over $1 billion in NovaLT orders in 2025, with roughly one-third allocated to oil and gas applications and the remainder to data center and industrial uses. Delivery slots for these orders extend into 2028 and beyond, supported by expanding manufacturing capacity. Furthermore, the integration plans for the Chart merger are progressing, with 14 workstreams in place to realize $325 million in cost synergies by 2026, while the Oilfield Services & Equipment (OFSE) segment is prioritizing margin quality over volume in 2026 amidst the anticipated upstream activity slowdown.
