In September, Sam Altman, the founder of OpenAI, presented a secret plan to the White House.

It had nothing to do with super intelligent AI taking over the world…

But it did come with a grandiose title:

“Infrastructure is Destiny”

And I’m convinced it will become a top priority for the new Trump administration.

According to officials at the meeting, Altman warned that the U.S. needs bigger data centers to harness the power of tomorrow’s AI.

If we don’t build them, we risk losing the AI arms race to China.

And that’s a race we can’t afford to lose.

Indermit Gill, a Senior Fellow at the Brookings Institute says: “Whoever leads in artificial intelligence in 2030 will rule the world until 2100.”

And these new, powerful data centers will supply the main resource we need to ensure we keep our lead into 2030.

It’s a new kind of digital commodity called computing power, or “compute” for short.

Without compute, there’s no AI.

And you can’t have compute without its two subcomponents.

The first is GPUs… the type of chips made by Nvidia and AMD.

We’ll need a lot more powerful GPUs to keep scaling AI technology.

The second thing we’ll need?

That’s what Sam Altman is so concerned about.

And so am I.

You see, we need an abundant energy source to power those new data centers…

And right now, we don’t have the infrastructure in place to supply that power.

Simply training a new AI model like ChatGPT can use up to 10 gigawatt (GWh) hours of power.

That’s enough to power 1000 U.S. households for a year.

And even after you’ve trained the AI model, you still need a lot of energy to keep it running.

Each query to ChatGPT uses 2.9 watt-hours of electricity, or 10X the amount of a Google search.

Which means that, on a daily basis, the ChatGPT app uses as much energy as 33,000 U.S. households.

But that’s a fraction of the power we’ll need to keep our lead in the AI race.

That’s why Altman is calling for an unprecedented amount of spending on AI.

He believes we need up to seven new data centers across the U.S. at a cost of $100 billion each.

That’s 20X more than the cost of our current data center builds.

This next wave of data centers would feature two million AI chips and consume five gigawatts of electricity.

Which is 1,000X more than the average data center currently consumes.

It means a single new data center would require enough energy to power all of Miami.

But where will all that power come from?

Our Own Worst Enemy

That’s where we run into a problem.

Because the utility business is a slow-growing industry, and our power grid is old.

Most of the U.S. electric grid was built in the 1960s and 1970s, and over 70% of it is more than 25 years old.

What’s more, over the past few decades there’s been a strong push by environmentalists to provide clean, carbon emission-free energy.

And I’m all for that as long as it’s available at a reasonable cost.

But there’s only one way to achieve clean energy at the scale needed to provide for these new, energy-hungry data centers.

It’s an energy source that…

  • Produces nearly zero carbon dioxide or other greenhouse gas emissions.
  • Isn’t dependent on the weather, like wind and solar.
  • Avoids producing air pollutants that are often associated with burning fossil fuels for energy.

And can generate power 24 hours a day.

And get this, its supply is virtually unlimited.

I’m talking about nuclear energy.

Now, I’m on record that nuclear energy is at a tipping point.

And I believe we won’t reach our AI goals without bringing it back.

Fortunately, it seems that nuclear power is making a comeback some 50 years after the technology was last considered a growth industry.

Earlier this month, the Biden administration unveiled a roadmap to triple our nuclear power capacity by 2050…

Mainly through the construction of new reactors, plant restarts and upgrades to existing facilities.

And tech giants Microsoft, Google, Amazon and Meta are all embracing nuclear as a clean energy solution to help meet the increasing demand for clean electricity.

But the problem is, federal regulators keep getting in their way.

For example, this year federal regulators stymied Meta’s plan to build an AI data center next to an already operating nuclear power plant.

One of the issues cited by CEO, Mark Zuckerberg, is that a rare bee species was sighted on the land.

And in March, Amazon’s Web Services division (AWS), spent $650 million to buy a 1,200-acre data center campus next to the Susquehanna Steam Electric nuclear plant in Pennsylvania.

But just this month, the Federal Energy Regulatory Commission (FERC) ruled against Amazon, blocking the company from tapping into the plant.

This despite FERC Chairman Willie Phillips’ warning that the decision threatened national security and grid reliability.

Both are clear examples of Big Tech “doing the right thing” in pursuit of carbon-emission-free energy.

And they’re both clear examples of government overreach holding us back from our “infrastructure destiny.”

Here’s My Take

As I’ve said before, the AI race is critical for our future.

And the time to act is now.

According to OpenAI, there’s an estimated $175 billion of global infrastructure funds sitting on the sidelines today.

The U.S. needs to act quickly to ensure this money flows our way instead of going to China.

The 11th hour nuclear push by the Biden administration is a good start…

But I don’t believe it goes far enough.

Instead, I’m convinced we’re facing another “Manhattan Project” moment for the Trump administration…

Where the President puts the full force of the U.S. government behind developing nuclear energy as the path forward.

After all, Trump was bullish on nuclear energy during his first term in office.

And since bridging the infrastructure gap is a key to maintaining U.S. superiority in the Intelligence Age…

I believe we’ll see quick action by Trump to deregulate the problems plaguing its expansion here in the U.S.

Nominating North Dakota Governor Doug Burgum for Secretary of the Department of Interior and to lead his new National Energy Council is a great first step.

When announcing his choice, the incoming commander-in-chief declared, “With U.S. Energy Dominance, we will… win the A.I. arms race with China (and others).”

To accomplish that goal, Burgum will lead an effort to cut red tape, boost private-sector investments and promote innovation over regulation.

And that will open up a whole host of investing opportunities for us.

Regards,

Ian King's Signature
Ian King
Chief Strategist, Banyan Hill Publishing