As we’ve been writing for the better part of the past year, the focus of the next AI trade remains all about energy and ‘powering up America’ through an upgraded grid to ensure AI infrastructure can support power-hungry chatbots.
However, the conversation appears to be shifting as Goldman President of Global Affairs and Co-Head of the Global Institute Jared Cohen published a new article discussing the geopolitics of AI infrastructure and a data center diplomacy strategy.
Cohen penned an article in Foreign Policy titled “The Next AI Debate Is About Geopolitics,” in which he explores the geopolitical importance of AI infrastructure, particularly the global race to establish data centers.
On Monday, Cohen provided clients with an executive summary of the note that explained data might be the “new oil,” but nations – not nature – will determine where data enters are built.
Here’s more:
The United States is home to the plurality of the world’s data centers, yet America’s aging energy grid is under enormous strain. Energy demand in the U.S. has been flat for two decades, data center vacancy rates are near record lows, and the shortage of powered land with the connectivity required to support large-scale data centers, combined with supply chain challenges and lengthy permitting timelines for new infrastructure present challenges to realizing both the public and private sectors’ AI ambitions. Goldman Sachs Research estimates that data centers used three percent of U.S. power in 2022, a number that could reach eight percent by 2030 – estimates by regulatory and industry groups, as well as the International Energy Agency, all point in the same direction.
AI could solve some of these problems, and innovation could improve the U.S.’s domestic outlook. AI could improve grid planning, grid resilience, and materials discovery for clean energy technologies. Increased efficiency of chips, with denser circuits and new architectures are already reducing semiconductor energy needs at remarkable scale. The U.S. produces more oil than any nation in history, and natural gas production has boomed since the shale gas revolution of the early 2000s. A more robust power grid that embraces diverse energy resources—including nuclear power, small modular reactors, and reactivated nuclear plants—could change the market calculations in America’s favor.
But to win, the United States will need to enlist its asymmetric advantage of global alliances and partnerships, both in the public and private sectors. This would be a commercial and public sector strategy for data center diplomacy—proactively identifying able, willing, and trusted international partners; pooling public and private capital; identifying and addressing security and privacy risks; and incentivizing innovation across the technology stack. This task is growing more urgent, and more promising. Leaders need to develop a list of locations that satisfy all or even most of these criteria for data centers.
Key players include:
- Canada: The United States’ top trading partner with vast amounts of powered, networked land close to abundant natural resources and energy. Leading hyperscalers and data center developers have recently announced major projects in Canada totaling tens of billions of dollars, including investments in the energy-rich province of Alberta. A U.S. ally through NATO, the Five Eyes intelligence alliance, and potential future AUKUS technology partnerships.
- The Nordic countries: Leaders in green energy and now all members of NATO. They have exceptional technology companies of their own, including telecommunications giants. Their connectivity, energy sustainability, and access to power have long made them data center hubs for hyperscalers. Their cool climates also help prevent overheating in data centers, potentially allowing better performance levels and lower costs over the long term.
- Japan and South Korea: Home to world-leading technology ecosystems. Tokyo is investing 0.71 percent of its gross domestic product on semiconductors through 2025—a much higher figure than most industrial economies, including the United States.
- The Arab Gulf countries of the Middle East: These countries aim not just to export oil, but also AI. Saudi Arabia and the United Arab Emirates have some of the highest internet penetration rates worldwide. Qatar’s AI market has grown substantially, and Doha has the capacity for significant infrastructure buildouts, as demonstrated by its investments around energy and transportation. The subsea fiber optic cables that are the backbone of the modern internet have critical nodes in the Red Sea and the Persian Gulf, where 90 percent of Europe-Asia data traffic is carried. The region connects Europe to the global south. They are all moving their petrodollars toward investments in the energy transition and domestic industries, from life sciences to telecommunications to manufacturing, and AI will accelerate that trend. The U.S. has a chance to pull these countries closer to its technology ecosystem rather than China’s, but will have to make prudent risk assessments as it does so.
For those who missed it, in our note “The Next AI Trade” from April of this year, we outlined various investment opportunities for powering up America, most of which have dramatically outperformed the market.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
