Electric power has become a bottleneck for AI and the trend is unlikely to ease soon as AI chips are increasingly power hungry and as data centers capacity is expected to double globally over next years, sparking a surge in power demand in many countries.
Data centers will then have no choice but to become more energy-efficient and secure new sources of power. The growing mismatch between power needs and recent low grid infrastructure capex should spark actions on both data center electricity demand and global power supply.
On the demand side, the first and main step towards improving AI energy efficiency will be to shift data centers from air to liquid cooling. With air cooling failing to maintain monster AI chips at normal working temperatures, the data center and semiconductors industries are pivoting towards liquid solutions that are expected to cut power usage by 40%.
On the supply side, cloud giants have been seeking to secure specific power supply agreements with utilities. Nuclear power specifically is emerging as a key solution to tackle the energy challenge as its reliability and predictability make it an excellent complement to renewable energies.
More globally, this sudden power demand pick-up from data centers should spark a 2x or 3x increase in global electricity demand and structurally change the power market dynamics.
This should reenergize expectations about electric grid capex and open a multi-year cycle of growth for most companies involved in the power management ecosystem.
As promised during his campaign, President Donald Trump declared a national energy emergency following his inauguration and signed several executive orders aimed at boosting domestic fossil fuel production while reversing many of the clean energy policies from the Biden era. Trump, along with key cabinet members such as Doug Burgum, the newly appointed Secretary of…
Synapse Invest was founded in 2019 with the mission of offering a diverse range of thematic investment products centered around innovation. Our journey began with the launch of our first Actively Managed Certificates (AMCs) in the closing weeks of 2019, and we are now proud to celebrate more than five years of consistent growth and…
We have been highlighting for months that, even if deploying new solar/wind capacity and building/reopening nuclear plants are key to tackling the power challenge arising from data centers in the medium and long term, these initiatives are unlikely to come online fast enough to handle short-term extra electricity demand. Accordingly, transitory solutions to fill the…
GE Vernova kicked off the earnings season in style for the electrification/powering AI theme last week, with two of its three main units delivering impressive results. The group’s Power unit (generation equipment) recorded a significant +470bp margin expansion to 11.9% and 34% bookings growth, while the Electrification unit (grid equipment) grew 22% and boasted a…
After Microsoft, that is financing the restart of an idle reactor, Amazon and Google just made the headlines by announcing that they both will bet on a very promising technology, small modular reactors or SMRs. The former (which also acquired earlier this year a data center powered by an adjacent nuclear power plant) will partner…
On Friday, US electric utility Constellation announced the restart of its Crane nuclear plant, that had been shut down in 2019 for economic reasons, along with a 20-year power supply agreement with Microsoft. The Tech giant will then secure 835 MW of power over 20 years to supply its data centers in the PJM Interconnection,…
Just months after the US Senate passed the ADVANCED Act, a landmark legislation designed to ease the permitting process for nuclear reactors and reduce costs and construction times (see our previous report), various US administrations are moving fast on the nuclear topic. The Nuclear Regulatory Commission (NRC) indeed exempted Kairos Power from a full environmental…
If one needed further evidence that we are heading towards a growing supply/demand imbalance for uranium, last week’s news flow provided it. Kazatompron, Kazakhstan’s state-owned uranium miner (and the world’s largest), announced (again) a cut to its 2025 production forecast due to continued sulphuric acid shortages and delays in construction works at new deposits. The company…
With AI electricity consumption surging and utilities starting to have difficulties meeting demand, both cloud giants and utilities are actively looking at solutions to tackle the power challenge. Deploying new solar/wind capacity and building nuclear reactors (or reopening idle ones) are clearly part of the agenda. But these initiatives also represent a multi-year effort, suggesting…
The US gave a major boost to its nuclear industry yesterday as the Senate passed the ADVANCED (Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy) Act with overwhelming bipartisan support, and as the DoE announced it would fund up to $900 million to support the deployment of small modular reactors (SMRs). The ADVANCED Act is a…
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ISIN
XS2817746469
Currency
USD
Type
Active Equity
Issuer / Rating
Morgan Stanley / S&P A+
Inception Date
16.07.2024
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Daily