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Where will the Power Come from for AI?
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1. Where will the Power Come from for AI?
Prof G with Summary of AI Electricity Needs
AI’s Electricity Needs Are Growing Faster Than the Grid Can Handle
Tech companies are racing to build new data centers to handle the surge in AI computing demand. These facilities use massive amounts of electricity — just this year, electricity demand from data centers in the U.S. is estimated to rise 22%.
The problem is that the electrical grid isn’t built for that kind of growth. Power shortages are already delaying data center projects by two to six years. Which raises two questions: Can the U.S. actually produce and deliver enough electricity to sustain this boom — and if it can, who’s paying for it?
Nowhere is that question more extreme than with OpenAI. OpenAI wants to build out a chip network that would consume 250 gigawatts (GW) of energy by 2033. That is equivalent to a fifth of America’s entire electric generation capacity.
§ To put that in perspective: If OpenAI had 250 GW of capacity today, it would rank as the seventh-largest country in the world by electricity production capacity — ahead of France, South Korea, Brazil, and Saudi Arabia.
The U.S. added a record 56 GW of new power capacity last year. Even if that pace continued annually, OpenAI’s plan would require the company alone to use more than half of all the new electricity the country adds over the next eight years.
Where would that power come from? Nuclear is the popular talking point, but to generate 250 GW from nuclear alone, you’d need roughly 250 new reactors at an estimated cost of $12.5 trillion. Each one can take 15 years or more to build, so the math and the timeline don’t add up.
Natural gas isn’t a realistic option either, as much as Trump wants it to be. Just 12.5 GW of natural gas capacity is expected to come online this year, one of the biggest additions ever. OpenAI’s target is 20x that.
The obvious answer is solar. Renewable power like solar and onshore wind is the least expensive and quickest power generation source to deploy in the U.S., even without government subsidies. Of the 56 GW of capacity added last year, more than half of it came from solar.
But politics are getting in the way. The One Big Beautiful Bill Act scraps key tax credits and adds new permitting hurdles, including a requirement that new projects be personally approved by Interior Secretary Doug Burgum. These changes could cut U.S. solar capacity projections by roughly 20%.
Prof G Markets
Energy isn’t the only challenge. Local communities are increasingly pushing back against new data centers. About $64 billion worth of projects have been blocked by residents who don’t want them in their communities. Their criticism is simple: These projects raise costs without giving much back.
In major data center hubs, electricity prices have jumped as much as 267% over the past five years, according to Bloomberg. And despite the huge price tags, they don’t create many jobs.
§ Apple’s data center in North Carolina was a $1 billion investment, but resulted in fewer than 100 permanent jobs.
For many communities, the math just doesn’t work: higher electricity bills, environmental impacts, and little economic benefit — all to power the infrastructure behind an AI boom that may be running faster than the grid, the economy, or the public can keep up with.
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2. Stock Earnings Keep Improving
Ryan Detrick
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3. Margin Debt Has Soared
Key Points-Barrons
§ Margin debt increased by 32% to $1.3 trillion over five months through September, a pace suggesting market optimism may be peaking.
§ Year-over-year margin debt growth of almost 40% as of September indicates potential risk for investors in high-yield bonds.
§ Historically, when margin debt exceeds 40% year-over-year, high-yield spreads have increased by 1.21 percentage points in six months.
Y-Charts 10 Year FINRA margin debt chart—Breakout Above 2021 Levels
Y-Charts
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4. Be Careful What You Buy….Single Stock Leverage ETFs Trailing
WSJ Jack Pitcher The brutal divergence in performance is caused by what traders call “volatility decay,” or the tendency of price fluctuations to erode the long-term returns of a leveraged fund, even if the underlying asset goes up. And it is why leveraged-fund managers are quick to warn that their funds shouldn’t be held for long periods.
“Everything that is problematic about these funds is more problematic the more leverage or volatility you add to them,” said Dave Nadig, an industry veteran and director of research at ETF.com.
Money managers say that most leveraged funds aim to amplify returns for a single day, and shouldn’t be held for longer periods.
One of the most popular funds provides an extreme example. Last November, two recently launched ETFs that offered to double the daily returns of bitcoin-linked stock MicroStrategy (now known as Strategy), began to soar. The outsize gains attracted attention on social media, and thrill-seeking individual investors began to pile in at a pace never seen before for a leveraged single-stock fund.
Many of those investors are now sitting on huge losses, despite the fact that the underlying Strategy shares are up over the past year. Strategy shares rose 28% in the 12 months ended Wednesday, while one of the leveraged funds, the Defiance Daily Target 2x Long MSTR ETF, plunged 65%.
WSJ
5x Levered ETFS Coming….Levered ETFs 55% have Closed and 17% have Lost 98% of their Value
Business Insider
§ An ETF provider has filed for 27 new levered ETFs, including some 5x-levered products.
§ Leveraged ETFs are risky; 55% have closed, and 17% have lost over 98% of their value, Morningstar says.
§ The SEC’s current shutdown has left a question mark hanging over the approval of the funds.
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5. Anthropic vs. Open AI
Sherwood
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6. Altcoin Market Approaching Lows
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7. The Quiet Expansion of the USA’s Bitcoin Balance Sheet
The Crypto Advisor-It’s not every day the U.S. government quietly adds $15 billion in Bitcoin to its balance sheet - without authorizing a single purchase.
Last week, the Department of Justice announced the largest crypto forfeiture in U.S. history: roughly 127,000 BTC linked to an international fraud network led by Cambodian billionaire Chen Zhi. The Bitcoin was recovered from unhosted wallets and is now in federal custody.
At first glance, it’s a simple enforcement story. But look a little closer, and it’s something more consequential - a real-world example of how Washington’s Strategic Bitcoin Reserve (SBR) may begin to take shape in practice. Under the framework established by President Trump’s executive order, seized Bitcoin doesn’t just sit idle. It’s classified as a strategic national asset, meaning each enforcement action now doubles as a form of accumulation.
From Seizure to Strategy
Senator Cynthia Lummis was quick to connect the dots. In a post on X, she wrote:
“The seizure of 127,000 bitcoin underscores two urgent priorities for Congress: first, passing clear digital-asset market-structure legislation to ensure law enforcement can act decisively against bad actors while protecting innovation. Second, codifying how seized bitcoin is stored, returned to victims, and safeguarded for future generations.”
Her statement gets to the heart of what’s unfolding: the U.S. government isn’t just seizing Bitcoin - it’s beginning to define what national ownership looks like. And under the Strategic Bitcoin Reserve, that process is no longer ad hoc. It’s structured, audited, and explicitly designed to treat Bitcoin as a long-term strategic holding rather than an expendable asset.
Today, the United States holds approximately 325,447 BTC, worth roughly $36.3 billion at current prices - more than most public companies and sovereign treasuries combined. None of it was purchased. It’s the cumulative result of years of enforcement actions, now woven into an official framework that treats those assets as part of a reserve strategy. https://thecryptoadvisor.substack.com/
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8. Peak TED Talk 8 Years Ago
Sherwood
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9. Protein Powders and Shakes Contain High Levels of Lead
Consumer Report By Paris Martineau
Much has changed since Consumer Reports first tested protein powdersand shakes. Over the past 15 years, Americans’ obsession with protein has transformed what had been a niche product into the centerpiece of a multibillion-dollar wellness craze, driving booming supplement sales and spawning a new crop of protein-fortified foods that now saturate supermarket shelves and social media feeds.
Yet for all the industry’s growth and rebranding, one thing hasn’t changed: Protein powders still carry troubling levels of toxic heavy metals, according to a new Consumer Reports investigation. Our latest tests of 23 protein powders and ready-to-drink shakes from popular brands found that heavy metal contamination has become even more common among protein products, raising concerns that the risks are growing right alongside the industry itself.
For more than two-thirds of the products we analyzed, a single serving contained more lead than CR’s food safety experts say is safe to consume in a day—some by more than 10 times.
RECOMMENDED BETTER CHOICES
Owyn Pro Elite High Protein Shake Serving Size: 330 ml (1 carton)
Transparent Labs Mass Gainer Serving Size: 194 grams (2 scoops)
Optimum Nutrition Gold Standard 100% Whey Serving Size: 30.5 grams (1 scoop) BSN Syntha-6 Protein Powder Serving Size: 47 grams (1 scoop) Momentous Whey Protein Isolate1 Serving Size: 26.5 grams (1 scoop)
Dymatize Super Mass Gainer Serving Size: 333 grams (2.5 scoops)
Muscle Tech 100% Mass Gainer Serving Size: 357 grams (6 scoops)
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10. Putting Yourself in Positions for Good Things to Happen
A lot of success in life is just putting yourself in a position for good things to happen to you.
+ Be reliable
+ Avoid drama
+ Help other people win
+ Take care of your body
+ Take care of your mind
+ Live below your means
+ Treat your job as if it matters
+ Take care of your relationships
Simple, but not easy. https://fs.blog
As Stated in My Quarterly Letter.. The U.S. is a Now a Stock Market Nations….Half of Private Sector Employees in 401k
Peter Mallouk
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