From Yahoo Finance, January 22:
The AI boom triggered a surge in energy demand and infrastructure development throughout 2025. Global leaders gathered at this week's World Economic Forum in Davos expect these same themes to be a major part of the AI story in 2026.
"I said, you can't create this much energy. We needed more than double the energy currently in the country just to take care of the AI plants, and I said we can't do that," President Trump said in comments during his speech in Davos Wednesday, during which he repeatedly emphasized the US's commitment to powerful domestic electricity infrastructure.
The administration, Trump said, is intent on making infrastructure development in the US a booming industry to power the country's AI ambitions.
"Instead of closing down energy plants, Trump said, "we're opening them up."
Global power usage by data centers is expected to grow from a current level of around 55 gigawatts to 84 gigawatts in only the next two years, according to research from Goldman Sachs.
Yet, the heavy machinery companies building the data centers that underpin AI's computational power are facing years-long backlogs for parts such as natural gas turbines, and the process for getting new-generation equipment connected to the US power grid can take more than a decade.
"This is the fundamental paradox of the modern economy," said Schneider Electric (SU.PA) CEO Olivier Blum in comments for the Davos summit. "AI is the digital engine of growth, but it is also a massive consumer of one of the world’s most in-demand resources — energy."
Against this backdrop, the Industrials sector (XLI) has soared, picking up 17.5% over the past year against the S&P 500's (^GSPC) return of 13.5%. Caterpillar (CAT), the largest heavy machinery operator in the US, has returned a staggering 58% over the same timeframe.
'The largest infrastructure build-out in history'
During his comments on Wednesday, President Trump insisted that infrastructure and energy production are on the rise in the US.Steel production is "doubling and tripling, and we have steel plants being built all over the country," the president said. Factory construction is "up by 41%, and that number is really going to skyrocket right now." US natural gas production is "at an all-time high by far."
The domestic investments are indicative of the insatiable demand for new infrastructure to feed AI's growth, according to a chorus of voices at the Davos summit.
During a conversation with BlackRock (BLK) CEO Larry Fink during the summit, Nvidia (NVDA) CEO Jensen Huang said that — despite the hundreds of billions already spent by Big Tech companies — AI's development will require "trillions of dollars" of spending on what the chipmaking leader called the “largest infrastructure build-out in history.”....
....MUCH MORE
