Here’s Why the Biggest Winners Behind the Growing AI Trend Are Not What You Think…

Guest Post by Chris MacIntosh

If you thought we’d suggest Nvidia, you’d be as wrong as Miley Cyrus swinging naked on a wrecking ball. Nope, it’s not that! Here, take a look…

An interesting piece from the IEA:

Electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026. Data centres are significant drivers of growth in electricity demand in many regions. After globally consuming an estimated 460 terawatt-hours (TWh) in 2022, data centres’ total electricity consumption could reach more than 1 000 TWh in 2026. This demand is roughly equivalent to the electricity consumption of Japan. Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption from data centres.

We wonder where all that extra electricity is going to come from? Even if the IEA is only half right, a bucket load more electricity will be required.

Data centres require a consistent supply of electricity, so forget solar and wind. Nuclear power plants run at full capacity most of the time and it takes 10 years or so to build a nuclear power plant. So that only leaves natural gas and coal with realistic spare capacity.

Perhaps the biggest winners of the AI revolution will be the companies supplying the commodities to produce all the extra electricity that will be required.

The Deepwater Boom

Stuff we already knew about, but just a reminder how offshore is coming back into vogue.

A 12-year high in capex:

Next year, capital expenditure (capex) on new deepwater drilling is set to jump to the highest level in 12 years in 2025, Rystad Energy reckons. At the same time, capex on all-new and existing deepwater fields could surge by 30% in 2027 compared to 2023, to $130.7 billion, per the consultancy’s estimates cited by Reuters.

We don’t see “12-year highs” in offshore oil focused service companies (yet). We reckon that the crowd hasn’t woken up to the genuine long-term boom in offshore oil and gas that is coming.

The crowd probably also doesn’t appreciate how decimated offshore service companies were from 2018 to 2022. Most went bankrupt or had massive equity capital injections to stave off bankruptcy. Helix and Oceaneering were two companies that emerged from the devastation of the sector with their capital structure intact, so there is some meaning in looking at their long-term charts. The point of discussing this is the lack of capacity that offshore oil and gas service companies have to deliver services compared to 10 years ago.

Once again…

Uranium Outlook

Kazatomprom, world’s largest uranium producer, flashes red

Kazatomprom is the world’s largest and, arguably, most important uranium producer, accounting for 23% of global supply in 2022. To put in context, that’s double the next largest producer, Cameco in Canada.

The company has now warned production will be 20% below levels allowed by permits in 2024, with production impacted possibly into 2025. The warning comes just as uranium prices are approaching historic highs with significant fallout across the global energy and nuclear sector.

But this may not even be the biggest challenge facing Kazatomprom’s uranium supply to the West, with geopolitical tensions threatening to spillover into Kazatomprom’s joint venture partnerships across Kazakhstan, which make up a staggering 43% of global supply.

We remain long.

End of Coal?

You can’t make this up.

The Biden administration has just signed an economic suicide pact that would require the United States and six other Western democracies to shut down its coal power plants by 2035, while China, India and the rest of the world currently have more than 1,000 new coal power plants in the planning or construction phase. The no-coal pact allows all nations but the Suicidal Seven to continue using as much affordable coal power as they like.

Speaking of that dirty old coal and myopic ignorant woke government policies and how they transpire, rest your eyes on this hilarious short video clip from the New Zealand government propaganda channel.

Before you watch it, some background information — the New Zealand government, entirely captured by the Malthusianists at the World Economic Forum, banned oil and gas and went as far as cementing gas pipelines, an act of industrial sabotage. They did this so that they can NEVER be used again (cement paid for by taxpayers, of course).

“What we’ve seen this year is a 30% decline in natural gas and so the only fuel we have left to back it is coal”…

It is a situation of, if you don’t have the gas unfortunately we need to use the coal until we can transition to a lower carbon solar fuel in the future like biomass…”

It’s worth reminding folks that “biomass” is wood pellets. Yes, it’s true. Burning trees is “green.” Fucking idiots! I suspect this energy “transition” is going to go as well as this ugly man’s transition went.

Something else: You’ll notice this trend now across the Western world. All the video clips on YouTube from government propaganda channels have comments “disabled.”

The irony is that Western media outlets disable the comments section while Russian, Chinese, and Middle Eastern ones don’t. Imagine that!

Editor’s Note: The Western system is undergoing substantial changes, and the signs of moral decay, corruption, and increasing debt are impossible to ignore. With the Great Reset in motion, the United Nations, World Economic Forum, IMF, WHO, World Bank, and Davos man are all promoting a unified agenda that will affect us all.

To get ahead of the chaos, download our free PDF report “Clash of the Systems: Thoughts on Investing at a Unique Point in Time” by clicking here.

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