Fantomas

"The limiting factor for AI deployment is fundamentally electrical power." That was Elon Musk in a conversation with Larry Fink during his first-ever appearance at Davos. And it's the most honest thing anyone in Big Tech has said in a while. Forget the hype about superintelligence and robots. Forget the promises about productivity gains that CFOs still can't measure. The bottleneck is power. And that bottleneck is very real. Here's why & how to position yourself to make the most out of this: We're producing more chips than we can turn on. AI chip production is increasing exponentially. US electricity generation is growing 3-4% annually. The math doesn't work. US data center power demand is expected to hit 75.8 gigawatts in 2026, up from 61.8 gigawatts in 2025. By 2030, it could reach 134 gigawatts. The largest US grid operator, PJM, expects to add 31 gigawatts of data center load over the next five years. But only 28 gigawatts of new generation capacity is planned. The deficit is already here. Residential electricity rates near data centers have jumped as much as 267% compared to five years ago. Regular Americans are subsidizing Silicon Valley's power consumption. Whether AI delivers on its big promises or not, the electricity bills are coming due right now. Elon made another point that deserves attention: China is solving the energy problem while America talks about AI miracles. He noted China's solar deployment is "tremendous." And that's an understatement. I verified the numbers. They're insane: China installed 275 gigawatts of solar capacity in the first 11 months of 2025. That's more than the ENTIRE installed solar capacity of the United States. In May 2025 alone, China added 93 gigawatts. Roughly 100 panels every second. For the first time in history, a single country surpassed 1,000 gigawatts of total solar capacity. China added more solar in one month than America has built in its entire history... But this ISN'T about climate policy. It's about strategic positioning. China understands something Wall Street is ignoring: whoever controls the energy infrastructure controls the next era of computing. While American investors chase the latest AI stock, China is building the power grid that will actually run the technology. My take: The data center buildout will fall short of expectations. Big Tech wants trillions in infrastructure. The grid can't deliver it. Not at this pace. Not with 3-4% annual electricity growth against exponential demand projections. Something has to give. Either the buildout slows dramatically, or electricity prices spike to levels that destroy the economics of the entire AI story. The AI trade has been built on the assumption that infrastructure will materialize to meet demand. That assumption is looking increasingly shaky. BUT the companies selling power to Big Tech win either way. Scarcity means pricing power. Utilities don't need AI to cure cancer. They just need hyperscalers to keep signing power agreements. And they are. Microsoft, Amazon, Meta, and Alphabet spent ~$350B in 2025 on data centers. That money flows to utilities and grid infrastructure whether AI changes the world or not. US utilities are forecasting a ~6% jump in capital expenditures to $228B in 2026. Cumulative utility capex is expected to surpass $1.1T through 2029. Dominion Energy is investing $50B through 2029, projecting 5-7% annual earnings growth. Entergy plans $41B between 2026 and 2029, targeting more than 8% compound annual earnings growth. These aren't speculative bets on AI changing everything... They're regulated utilities with contracted demand and predictable cash flows. So beware the AI story. The productivity miracle remains unproven. The physical constraints are becoming impossible to ignore. But the picks-and-shovels play? THAT'S where the smart money is looking. The hyperscalers have to pay their electricity bills. I'd rather own the companies collecting them.

Copper surged 43% in 2025 - its best year since 2009. It already broke $13,000 per ton in early January 2026. And the fundamentals suggest this is just the beginning... The supply situation is catastrophic. In September 2025, a mudslide at Indonesia's Grasberg mine - the world's second-largest copper producer - killed seven workers and buried critical infrastructure under 800,000 tons of wet debris. Goldman Sachs estimates 525,000 metric tons of lost supply. That's roughly 2.6% of global annual production wiped out. Full operations won't return until 2027. But Grasberg wasn't alone: Chile's El Teniente - a tunnel collapse in July killed six workers. Production guidance slashed. DRC's Kamoa-Kakula - seismic flooding in May forced shutdown. Stockpiles depleted by Q1 2026. Chile's Quebrada Blanca - guidance cut by 20% due to tailings dam issues. Before Grasberg even happened, analysts estimated 497,000 tons already lost to disruptions through August 2025. J.P. Morgan now forecasts a 330,000-ton refined copper shortage in 2026. Benchmark Mineral Intelligence raised its deficit projection from 72,000 tons to 400,000 tons. These aren't marginal misses. These are structural deficits. Now here's where it gets interesting: Trump's 50% Section 232 tariff on copper products created a two-tier global market. COMEX inventories in the US have surged past 500,000 short tons - a seven-year high - as traders front-ran potential tariffs on refined copper. Meanwhile, LME inventories in London have plummeted 80% this year alone. Available stockpiles now cover less than a single day of global demand. The LME went into deep backwardation - spot prices trading $345 premium over 3 month futures. That's the widest spread since the 2021 squeeze. The US is hoarding copper while the rest of the world goes short. This is supply chain fragmentation in real-time. And NOT normal market dynamics. But here's what truly changes the game: Data centers are now consuming copper at unprecedented rates. S&P Global's new study shows copper demand will rise 50%+ by 2040 - from 28 million to 42 million metric tons. AI data centers use 27-33 tons of copper per megawatt of installed capacity. A single 100-megawatt hyperscale facility consumes thousands of tons before you even account for grid connections. The IEA projects data center electricity demand to more than double by 2030. This demand is price-inelastic. Microsoft isn't canceling data centers because copper hit $13,000. Here's the math problem nobody's solving: Global copper production peaks in 2030 at 33 million metric tons. By 2040, demand hits 42 million. That's a 10 million ton supply shortfall. Building a new copper mine now takes 12-18 years from discovery to production. Up from 6 years in 2000. Even at $13,000 per ton, the breakeven for next-generation copper mines exceeds current prices. J.P. Morgan targets $12,500 by Q2 2026. UBS says $13,000 by year-end. Goldman sees $15,000 by 2035. The AI buildout isn't stopping. The grid expansion isn't stopping. The mine disruptions aren't stopping. And new supply takes 15 years to develop. Copper at $13,000 isn't the top. It's the market finally pricing in physical reality.