#238: Electricity bills & AI
In this email:
Outlook for AI in the new administration
The Utilities sector in relation to AI
Interesting ticker from the XLU ETF
American AI in this next presidential cycle
As the 2025 presidential cycle unfolds, AI is poised to become a cornerstone of American economic and technological leadership. (Of course, it’s also a focus from other countries, as noted by China’s DeepSeek-driven sell-off this week)
The Trump administration is well aware of the competitive AI landscape — supposedly working on "eliminating harmful Biden Administration AI policies". (We'll have to wait for more details and material actions on this)
Talk of large scale investments like the $500bn Stargate Project is around — may not ending up happening, but the political atmosphere and focus are around it, to say the least
The Utilities sector in relation to AI
Yes, electricity bills!
The utilities sector is undergoing a significant transformation driven by AI adoption. As energy demands surge due to data centers and AI applications, utilities are modernizing grids, optimizing operations, and more importantly, building.
AI-driven data centers are significantly increasing electricity demand, potentially leading to a 70% increase in electricity bills for consumers and small businesses by 2029.
This surge in demand is prompting utilities to rapidly expand their infrastructure and generation capacity.
Interesting tickers from the XLU ETF
Which utilities companies are poised to benefit from the most from AI-driven boost in demand? For now, market’s been focusing on Entergy.
Meta Platforms announced plans to build a $10 billion AI data center in northeast Louisiana, which will be the company's largest data center to date.
Entergy will support Meta's project by constructing three new natural gas power plants, generating over 2,200 megawatts of electricity for the data center over a 15-year period
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