Energy Tech, Convergence, and the Hyperscalers

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This week we expand on the Energy Technology component of our Geopolitical Super Vol framework we introduced last week (here). The massive unmet energy needs of the other seven billion people on Earth were already driving investment in new energy technologies in particular for countries not blessed with sufficient domestic resources like crude oil, natural gas, or coal. A backdrop of structurally increased geopolitical uncertainty and turmoil, in particular amongst the largest economies in the world, will drive a doubling, tripling, and quadrupling down on a wide swath of new technologies that help meet energy needs. For The Lucky 1 Billion of Us, there is a need to invest in the technologies that allow our industries to compete in a host a new areas and to no longer simply cede all manufacturing to China and other Asian countries—as the U.S. and Western Europe have done over the past 25 years.

The new technology areas we are most interested in span four broad buckets:

* Grid optimization and enhancement

* Power generation

* Demand diversification opportunities, which encompasses areas like EVs (electric vehicles), LNG (liquefied natural gas) trucks, and energy efficiency

* Manufacturing and industrial competitiveness via physical AI, robotics, and automation

In this post we:

* differentiate between “Energy Tech,” which we believe has a very favorable outlook, and “Climate Tech,” the latter of which always seemed non-sensical to us.

* highlight the key areas we are watching most closely within the new technology buckets noted above.

* provide a progress report on hyperscaler profitability given the massive ramp in CAPEX seen by those companies.

* highlight Aramco as an AI and technology leader.

The opportunity for investment spans a broad spectrum of companies, technologies, and regions across a range of sectors including technology, industrials, traditional energy, new energies, power, infrastructure, metals, minerals, and mining. In a nutshell, Energy & Power + Technology + Industrials + Metals & Materials convergence.

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DISCLAIMER

My views are my own and not attributable to any current or past affiliation.

CREDITS

Intro & Outro music: Wolf Hoffman on Apple Music: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

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