The One Thing That Can Bring AI and Crypto Crashing Down

Today, we live in a world of MORE.

More people, more technology, more demand… more, more, more. It’s a never-ending cycle of growth over the long run, and no matter how much the media headlines want to suppress it, the truth always comes out in the end. 

That is certainly the case when it comes to energy, too. 

Don’t get me wrong, I’m not some fortune-teller reading tea leaves and hoping to strike it rich on a whim. My readers and I have seen this coming for a while now, and I can only hope their portfolios are positioned as well as mine is. 

And quite frankly, I’m always surprised how investors out there realize that energy is the lifeblood of our society. 

Without it, all of our progress would grind to a screeching halt. 

Just think, last year we saw global oil demand hit an all-time high of 103 million barrels per day in June. I know there’s a constant war over the narrative waged between OPEC and the IEA over how high it’ll grow going forward. 

One side sees strong demand growth, the other sees less growth, but both can’t deny the underlying fact that we all had better get used to seeing new all-time highs from here on out. 

Last week, we talked about two oil stocks I’m buying on the next dip. With supply-side tightness ahead this year, the market will soon wake up to the reality of our demand situation. 

But there’s a catch here… oil may become the least of our concerns when it comes to an energy crisis. 

Weird, huh?

If I were to ask any of you what the biggest market trends are right now, I doubt that oil would be at the top of the list. 

In fact, I’d bet the top two answers would be unanimous: AI and crypto. 

I won’t blame anyone for immediately thinking of names like Nvidia. The AI boom has pushed beyond simply having fun with a chatbot. We’re now seeing every company in nearly every sector of the market scrambling to integrate AI technology into their operations… and for good reason, too.

As for crypto, you probably don’t need me to tell you the current hype over bitcoin, which broke above $73,000 yesterday. 

It’s nearly impossible not to scroll through your phone and NOT see your news feed flooded with AI and crypto stories. 

We’re talking about hundreds of billions of dollars pouring in these two investments, and there’s only one thing that puts a damper on this party. 

Like I said earlier, energy is the lifeblood of our society; it’s the one achilles heel to these incredible investments. 

And it’s only a matter of time before the investment herd takes notice. 

According to an IEA report earlier this year, data centers, cryptocurrencies, and AI accounted for roughly 2% of global electricity demand in 2022. Data centers alone consumed about 460 terawatt-hours (TWh) that year — that’s set to grow to 1,000 TWh within the next two years. 

To put that into perspective, we’re talking about roughly the same electricity consumption as Japan.  

Here in the U.S., demand for electricity is expected to pick up, growing 2.5% this year… and that’s assuming we don’t have an abnormally hot summer. But forget cooling your house, it’s those huge AI data centers that will account for nearly one-third of additional demand between now and 2026. 

For crypto-miners, we’ve seen this demand story play out before. We’ve even gotten to the point that the Biden administration is now looking to collect as much data from miners as they can get their hands on, which includes how much power they’re drawing. 

Keep in mind that all of this new electricity demand will be drawn from an already over-stressed power grid!

Fortunately, there are solutions to this crisis. 

As bitcoin continues to push higher and AI technology becomes widely integrated into every facet of our daily lives, there’ll come a point when the need for more energy will drive us toward one very specific sector — one that is not only cleaner than natural gas, but has the capacity to generate the immense amount of power required. 

For some, that answer is developing next-gen nuclear power. 

Believe me, it’s not a coincidence that Amazon recently bought a data center campus that is completely powered by a 2.5GW nuclear power station owned by Talen Energy. 

However, the future of nuclear energy may not be what you think it is. You see, the development of next-gen nuclear technology like small modular reactors (SMRs) will accelerate to  bolster the U.S. power grid over the next decade. 

This is the opportunity for us to not invest in the building of these next-gen reactors, but what’s fueling them.

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.