Baker Hughes

Industrial & Energy Technology (IET) segment revenue surged 11% year-over-year to $2.9 billion in Q1 2025, with Climate Technology Solutions exploding 114% as new energy orders crossed $1.25 billion in Q2—carbon capture projects in the Middle East, Organic Rankine Cycle power plants for Fervo Energy's Utah geothermal facility (300 MW by 2028), and CarbonEdge digital monitoring for Wabash Valley Resources' low-carbon ammonia plant. Baker Hughes holds a record $31.3 billion IET backlog, positioning the organism for phase transitions in energy infrastructure. Unlike pure-play oil services firms, Baker Hughes architected a dual metabolism: traditional upstream equipment (gas turbines, compressors, subsea systems) funding diversification into carbon management, geothermal, hydrogen, and data center power solutions. This exaptation—repurposing subsurface engineering expertise from hydrocarbon extraction to CO2 sequestration—mirrors how bird feathers evolved for insulation before enabling flight.

The organism reduced Scope 1 and 2 emissions 39.5% since 2019, exceeding initial targets while committing to 50% reductions by 2030 and net-zero by 2050. CarbonEdge software combines digital monitoring and risk management across the CCUS value chain, deployed at Frontier Infrastructure data centers to verify captured CO2 volumes. Baker Hughes remains the only provider integrating advanced software with deep subsurface engineering—well construction, NovaLT gas turbines, CO2 compression—creating vertical integration competitors cannot match without acquisitions. Q2 2025 revenue of $6.9 billion (down 3% year-over-year) demonstrates cyclical upstream exposure, but adjusted EBITDA margins expanded to 17.5% as high-margin IET contracts offset commodity-driven volatility.

Path-dependence appears in capital allocation: $731 million trailing twelve-month R&D investment targets AI innovation networks and energy transition technologies, but 85%+ of revenue still derives from fossil fuel infrastructure. The company bet that hydrocarbon demand persists long enough for new energy revenue to compound toward the $6-7 billion 2030 target. Baker Hughes' September 2025 Fervo Energy partnership and agreements with bp-Equinor-TotalEnergies validate this dual strategy, yet quarterly earnings remain vulnerable to drilling activity slowdowns. The organism evolved redundancy—gas infrastructure, digital solutions, new energy systems—to survive energy market phase transitions, wagering that its technology breadth provides optionality competitors lack.