The Great Drilling: A New Frontier in Energy Consumption

La prospérité de la consommation

The cornerstone of our civilization has always been energy. In the history of the United States, the economy has moved from an agrarian one, to a manufacturing one (Hollywood: tomorrow’s Detroit, thanks, AI), to services (think: M&A law), to the modern day titans of the technology industry. There is a not-so-hidden movement in markets which we will get into later.

Enjoy the read - TYP

A New Frontier:

The use of energy is a direct function of the GDP per capita of a given society. Those with higher per capita energy use enjoy higher GDPs per capita and better living standards, on average. Global trade and innovation increased with increased energy providing research and development, transportation, logistics, and efficient movements of goods and services.

For instance:

Source: Our World in Data 

At the dawn of the 19th century, societies transformed from agrarian ones into industrial powerhouses. Stream engines revolutionized transportation and manufacturing capabilities, driving productivity and efficiency forward.

At the dawn of the 20th century, electric power allowed factories to operate more efficiently and safely. Electricity paved the way for things such as the telegraph, telephone, radio, and eventually the internet - raising the standards of living and quality of life for all. Households gained access to heating, appliances, lighting, and reduced labor-intensive chores; healthcare and education improved.

The 21st century, has generally, seen a transition to renewable energy. Though the United States continues to drill record levels of oil.

Source: EIA

This includes environmental benefits, as well as the lifting of quality life through decreased pollution and emissions from fossil fuels that potentially create health risks.

Now, in 2024, the rise of AI has created more demand for data centers: Une nouvelle frontière en matière de consommation d'énergie. This has marked a significant milestone in technological advancement - promises of revolutionizing industries, enhancing productivity, and contributing to a higher standard of life for all, globally. Algorithms require substantial computational power, just as data centers require substantial infrastructure investment. This has ramped up drastically. Constellation Energy is reopening Three-Mile, Microsoft is partnering with BlackRock to create a super AI fund - the corporate lifecycle is forcing companies to turn into zombies in order to create a super-owning culture, similar to that of boomers of present day, whilst the new guys on the block put in the sweat equity and rent.

Year to date the S&P is up 20.88%, while the energy sector in the 500 is up 5.51%, the 400 is up just 1.37%. Energy and AI are tying into one, and it is only a matter of time before heads start turning and granting a premium. The leveraging of AI will grant society unlimited upside in digital productivity. “AI won’t take your job, but someone who knows how to use AI, will.”

life is rich,
mickey