There is one truth that has followed every major technological revolution in human history.

Energy demand always rises to meet technological capability.

When we industrialized, coal consumption exploded.

When we built the modern transportation system, oil demand reshaped global geopolitics.

When we entered the digital age, electricity quietly became the backbone of the global economy.

And now we are entering the AI era.

What most people don’t appreciate is that AI is not just a software revolution. It is an electricity revolution.

Training a single advanced AI model can consume as much electricity as tens of thousands of homes use in an entire year. And once trained, these models continue to run inside data centers filled with specialized hardware operating 24 hours a day.

A single large AI data center can require over 1 gigawatt of power. To put that into perspective, that’s enough electricity to power roughly 700,000 homes. One building consuming the equivalent of a major city.

Now consider that companies like Microsoft, Google, Meta, and Amazon are planning dozens of these facilities.

Suddenly, you begin to see the scale of what’s happening.

Even individual AI queries consume more power than traditional computing tasks meaningfully. One estimate suggests an AI query can use roughly 10 times the electricity of a traditional search query. That difference seems trivial until you multiply it by billions of interactions per day.

This is why, for the first time in decades, electricity demand in the United States is accelerating again.

For nearly 20 years, electricity demand was relatively flat. Efficiency gains offset economic growth. But AI, electrification of transportation, and domestic manufacturing are reversing that trend.

And here’s where the story becomes even more interesting.

China understands this.

China is building power infrastructure at a pace that is difficult to comprehend. They are adding entire national-scale power capacity every few years. In 2023 alone, China added more new coal power capacity than the rest of the world combined. At the same time, they are installing solar and wind at record rates, becoming the global leader in renewable deployment.

They are not choosing one energy source.

They are choosing all of them.

Because they understand that energy availability determines technological leadership.

Meanwhile, in the United States, building new power plants and transmission infrastructure can take a decade or more due to regulatory hurdles, permitting delays, and political resistance.

This creates a very real risk.

The country that can generate the most reliable, scalable energy will have a structural advantage in AI, manufacturing, and economic growth.

Energy is becoming the limiting factor.

And whenever something becomes a bottleneck, investment opportunities emerge.

We are entering a period where trillions of dollars will be spent on power generation, grid modernization, nuclear energy, solar, battery storage, geothermal, and technologies that most people have never even heard of.

Some of the biggest fortunes of the next decade will likely be tied directly or indirectly to solving this energy constraint.

In today’s episode, we explore alternative energy sources, the challenges we face, and the technologies that may power the future.

Because understanding energy is no longer optional if you want to understand where the world is going.

And as investors, those who see these shifts early have the opportunity to position themselves ahead of the crowd.

Watch on YouTube:

https://youtu.be/D0Lpmq0SAvo

Listen on Apple Podcasts:

https://podcasts.apple.com/gb/podcast/548-ai-is-about-to-trigger-an-energy-crisis-most/id718416620?i=1000752299883

Listen on Spotify:

https://open.spotify.com/episode/5l4674hFIJPWkz0spMq4YL

Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.

Welcome everybody. This is Buck Joffery, the Wealth Formula podcast. And today, before we begin, I wanna remind you as always, there is a website associated with this podcast, wealthformula.com. That’s where you want to go. If you have, uh, an interest in uh, ing more in the community in particular, there is a, a credit investor club.

AKA investor club, which you need to sign up for. Uh, go to wealthformula.com and see some private deal flow at, uh, no cost to you, uh, that, uh, you might have an interest in. Uh, let’s talk about today’s show. It’s a little bit about, uh, something. You know, that is, uh, on I think, a, a major issue, uh, going into the next decade.

Um, you know, there’s one truth that’s followed. Every major technological revolution in human history. Energy demand is always rise, uh, to meet technological capability. You know, when we industrialize, uh, coal consumption exploded, obviously when we built modern transportation system oil. Demand, uh, reshaped global geopolitics.

And when he entered the digital age, electricity became the backbone of the global economy, and now we’re entering

the era of artificial intelligence. Now, what most people don’t appreciate is

that AI is not just a software revolution, it’s an electricity revolution. Uh, training a single advanced AI model can consume as much electricity as literally tens of thousands of homes in an entire year.

And once trained, these models continue to run inside data centers filled with specialized hardware operating 24 hours a day. A single large AI data center can require what’s called a entire one gigawatt of power. Now, what’s a gigawatt? Well, to put this all into perspective, that’s enough electricity to power.

Roughly 700,000 homes, one building consuming the equivalent of a major city. Now, consider that companies like Microsoft, Google Meta, Amazon, they’re applying to build dozens of these facilities, and suddenly you begin to see the scale of what’s happening. Uh, even individual AI queries when you do them, they consume a lot more power than traditional computing tasks.

Um, there’s an estimate that suggests that an AI query. Can use roughly 10 times the electricity of a traditional, uh, search query. The difference seems trivial until you multiply that by like billions of these interactions per day. And that is why for the first time in decades, electricity demand in the United States is accelerating again and doing so quickly.

Now you might ask, well, you know, what’s been happening for the last 20 years? Well, electricity demand was actually relatively. Flat. And a lot of that is because of efficiency gains, offsetting economic growth, but ai, electrification of transportation, domestic manufacturing, they’re all gonna reverse that trend.

And, and here’s where the story becomes even more interesting, because we know that China already understands this. China’s building power infrastructure at a pace that’s difficult to really even comprehend. They’re adding entire national skill, power, capacity every few years. In 2023 alone, China added more new coal power capacity than the rest of the world combined.

And at the same time, they’re installing solar, wind, all these things at record rates becoming really the global leader in re renewable deployment. So you don’t think of China is that way, but they are. They’re not choosing one energy source. They’re choosing all of them. And because they understand that energy availability will determine technological leadership.

Meanwhile, in the US things are kind of slower. Building a, a new power plant and transmissions infrastructure can take a decade or more. We got lots of regulatory hurdles and permitting delays in political resistance that the Chinese don’t have, and that creates a lot of risk. The country that can generate the most reliable, scalable energy, we’ll have a structural advantage in AI manufacturing and economic growth.

And that is a big, big deal because energy at the end of the day is becoming. The limiting factor for growth, and whenever something becomes a bottleneck, you also get investment opportunities that emerge. So we’re entering a period where trillions of dollars will be spent on power generation, grid modernization, nuclear energy, solar battery, geothermal, you name it.

And a lot of those things you’ve never heard of. Some of the biggest fortunes of the next decades will be tied directly or indirectly to solving these ener...

AI Is About to Trigger an Energy Crisis Most People Don’t See Coming