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While the world is focused on the race for faster AI chips, the true bottleneck for the industry’s explosive growth is rapidly becoming power, according to a leading tech analyst from I/O Fund, Beth Kindig.
On Sunday, Kindig reshared a snippet from an old interview with Wealthion, which originally aired on August 29, highlighting that the immense energy demands of next-generation GPUs will drive “at least 10x growth” for strategically chosen energy stocks, making the sector the next major AI investment frontier.
She highlighted that her firm began moving into AI networking nearly a year ago and is now in the “early stages of moving into energy.” This shift is driven by big tech companies “gobbling up whatever alternative power they can find” to fuel their burgeoning AI infrastructure.
The analyst pointed to Nvidia Corp.‘s (NASDAQ:NVDA) upcoming Blackwell platform as a critical inflection point. “Blackwell is about 100 kilowatts more or less… it’s breaking through 100 kilowatts, could be 140 kilowatts,” Kindig explained.
She projected that by the end of the decade, GPU energy requirements would reach 1 megawatt, representing a staggering tenfold increase in power demand. This escalating need creates an urgent and compelling opportunity for investors in the energy sector.
Kindig warned that without an adequate power supply, the “extremely expensive systems” like multi-billion-dollar GPU racks would “have to sit on the shelf or stagnant.”
She emphasized that major tech players, which she dubs “neo clouds,” are thinking a year or two in advance, proactively securing power to avoid future bottlenecks.
Looking further ahead, Kindig believes Nvidia’s “Ruben” chip, anticipated in the next one to two years and projected to be 3 to 5 times more powerful than current systems, could trigger “serious problems” for the power grid.
This foresight, she suggests, is why companies are accumulating power resources now, even as the broader energy sector is currently “pretty beat down” and out of favor with investors.
See Also: Jeff Bezos Touts Data Centers In Space As Samsung And OpenAI Plan Floating Data Centers In The Ocean
The growing energy crisis in AI has prompted other tech visionaries to propose unconventional solutions.
OpenAI and Samsung are reportedly collaborating on floating data centers in the ocean, aiming to leverage cold seawater for efficient cooling, a process that can account for up to 40% of a land-based data center’s power consumption. This maritime approach is estimated to cut total energy use by up to 70%.
Meanwhile, Amazon founder Jeff Bezos and venture capitalist Chamath Palihapitiya have even touted the concept of placing data centers in orbit to harness limitless solar power and the natural vacuum of space for cooling, predicting these orbital facilities could become cost-competitive within two decades.
While Kindig suggests focusing on energy investments, the broader energy exchange-traded funds have underperformed this year, while nuclear energy ETFs have had a stellar performance.
This also comes as industry veterans like Cathie Wood have highlighted that nuclear energy can potentially emerge as the lowest-cost source of electricity, outcompeting solar.
| Energy Sector ETFs | YTD Performance | One Year Performance |
| Energy Select Sector SPDR Fund (NYSE:XLE) | -0.78% | -4.54% |
| Vanguard Energy Index Fund ETF (NYSE:VDE) | -1.16% | -3.43% |
| Fidelity MSCI Energy Index ETF (NYSE:FENY) | -1.32% | -3.48% |
| iShares Global Clean Energy ETF (NASDAQ:ICLN) | 42.50% | 23.82% |
| Alerian MLP ETF (NYSE:AMLP) | -6.34% | -2.25% |
| First Trust Natural Gas ETF (NYSE:FCG) | -12.58% | -8.85% |
| VanEck Oil Services ETF (NYSE:OIH) | -8.91% | -10.22% |
| Nuclear Energy Linked ETFs | YTD Performance | One Year Performance |
| VanEck Uranium and Nuclear ETF (NYSE:NLR) | 79.21% | 56.67% |
| Sprott Uranium Miners ETF (NYSE:URNM) | 37.97% | 13.76% |
| Range Nuclear Renaissance Index ETF (NYSE:NUKZ) | 68.07% | 60.65% |
| Themes Uranium & Nuclear ETF (BATS:URAN) | 63.08% | 44.24% |
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Posted In: AMLP FCG FENY ICLN NLR NUKZ NVDA OIH URAN URNM VDE XLE
