Unleash AI's potentials, Buy NEE, DUK, XLU ?
Knights of the Round Table.
On Thu, 12 Sep 2024, top tech executives gathered at the White House to discuss the significant energy consumption of their artificial intelligence technologies.
Among those present were:
OpenAI, Chief executive - Sam Altman,.
Anthropic, Chief executive - Dario Amodei.
Google, President - Ruth Porat.
Nvidia, Chief executive - Jensen Huang.
Amazon’s AWS, Chief executive - Matt Garman.
Amazon’s Data centre planning & deliver, VP - Kerry Person.
Also “several” power and utility companies…
Discussion Topics.
The focused meeting covered several fronts:
How public & private sectors can collaborate to sustainably support AI's intense energy consumption.
Other topics also included data center capacity and semiconductor manufacturing.
As tech giants race to develop advanced AI tools, their emissions are expected to increase. This poses a challenge to climate goals set by many companies, including Google & Microsoft..
Cases in point.
(1) Nvidia’s highly anticipated Blackwell AI chip.
It consumes 1,200 watts of electricity.
Almost enough to power an average home in US.
(2) Data centres.
Is the place where most AI training and processing takes place.
Electricity consumption is expected to rise to +9.1% by end of the decade, more than double what it is consuming now.
Post White House Meeting.
AWS expressed its appreciation for the meeting and emphasized the need for:
Modernizing the nation's utility grid.
Expediting project permits.
Ensuring timely grid connections for carbon-free energy projects, that drive growth in Technology & Manufacturing sectors.
The Biden-Harris administration is committed to deepening US leadership in AI while ensuring responsible development and US-based data centers.
So far, neither the participants nor the White House responded to a request for comment.
Separately, Nvidia’s Chief executive - Jensen Huang mentioned the followings, on 2 separate occasions:
(1) Interview with CNBC:
He emphasized the industry's growing need for energy to support AI development.
He stressed the importance of (a) understanding the upcoming challenges and opportunities, as well as (b) finding efficient and scalable solutions.
(2) Goldman Sachs’ Communacopia+Technology conference:
Nvidia is ramping up production of its new Blackwell chips.
Demand for them is so high that customers are expressing growing concern.
My viewpoints : (mine only)
Hopefully this is but one of few meetings to come for US (as a country) to lay down the infrastructure foundation required for AI progression, while there is still time.
The US government used to be very hands off leaving the private sector to take the lead and drive the change.
Obviously, artificial intelligence is more than just technological advancement.
It is clear that Energy is the next area of focus for US, it is not too early to do the homework and plan where to invest the limited resources.
What I Want To Share:
These are some preliminary energy stocks & ETFs for reference and sharing. They are not purchase recommendations.
US Stocks:
$NextEra(NEE)$ : Known for its focus on renewable energy, NextEra has consistently demonstrated strong financial performance. $83.46 per share on 12 Sep 2024.
$Duke(DUK)$: With a diversified portfolio, Duke Energy has been a reliable performer in the utility sector. $115.97 per share on 12 Sep 2024.
$Southern(SO)$: A large, diversified energy company with a strong financial track record. $88.49 per share on 12 Sep 2024.
US ETFs:
$iShares U.S. Utilities ETF(IDU)$: A widely-traded ETF that provides exposure to the US utility sector. $98.35 per unit on 12 Sep 2024.
$Utilities Select Sector SPDR Fund(XLU)$: A sector ETF that focuses on the utility sector, including the most profitable companies. $77.45 per unit on 12 Sep 2024.
Vanguard Utilities ETF (VPU): A passively managed ETF tracking the utility sector. $167.15 per unit on 12 Sep 2024.
With the US market poised to rally soon, I wonder if the early bird is already late in catching the worms. Better late than never, I always say.
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