"Lee and I discussed one of the most overlooked realities of artificial intelligence. None of it works without electricity. For a while, there was a belief that data centers could simply generate their own power through wind or small localized grids. As Lee quickly pointed out, that idea does not scale. Wind energy cannot reliably power a data center, let alone meet residential heating and lighting demand at the same time."
"We discussed how even large technology companies are being forced to work directly with utilities. Microsoft's effort to restart Three Mile Island is a perfect example, and notably, it is being done in partnership with a utility, not independently. That reality is why utilities have moved from being an afterthought to becoming a core AI infrastructure investment. Lee noted that utilities were one of the strongest-performing sectors earlier this year."
Artificial intelligence growth requires substantial and reliable electricity, and data centers cannot sustainably self-generate sufficient power using wind or small localized grids. Wind energy cannot reliably power data centers while also meeting residential heating and lighting needs. Large technology companies increasingly must partner directly with utilities for power solutions, exemplified by Microsoft’s effort to restart Three Mile Island in partnership with a utility. Utilities have shifted from an afterthought to core AI infrastructure investments, experienced strong performance earlier in the year, and recently pulled back about 10%, with geographic concentration making Southeastern and Eastern U.S. utilities especially attractive.
Read at 24/7 Wall St.
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