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Amazon Finds an Unlikely Partner in Its AI Quest

Austin Smith

Published: October 22, 2024 8:35 am

Key Points

• Amazon is a leader in artificial intelligence and had partnered with Dominion Energy to feed its ever-powerful data centers.
• Megacap tech companies have been making investments in energy production to avoid bottlenecking their multi-billion dollar investments.
• Nuclear, solar, and wind are being used.
• This deal highlights why AI is the trend of the next decade, and why “the Next Nvidia” stocks are so exciting. Read more here.

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[00:00:00] Doug McIntyre: So we’ve got Amazon (Nasdaq: AMZN) joining all the other huge tech companies saying we need massive amounts of electricity for our AI data centers. It’s not available now. It’s too much, but it’s the grid can’t support it. Uh, we’re going to go out and start to look for alternative energy. The energy of the day is nuclear.

[00:00:24] Doug McIntyre: They’re now small nuclear reactors. They’re not like the three mile Island behemoths that. Melted down. Although Microsoft decided it was going to pay money to restart one of those.

[00:00:36] Lee Jackson: The one out there, of course, that, that one actually stayed in production until like 2018 and they just shut it down. You

[00:00:44] Doug McIntyre: can’t, you, you, you can’t, no one will live near there.

[00:00:48] Doug McIntyre: So tell me what the story is. What, what are they actually planning to do?

[00:00:52] Lee Jackson: Well, uh, from the data I’ve seen, Amazon is going to partner up with Dominion (NYSE: D), the big, uh, energy provider that serves North and South Carolina. And I think parts of Virginia as well. And, um, they’re going to go in with them to build a, one of those small reactors just for them, not for anybody else, just for them.

[00:01:16] Lee Jackson: And in addition, they’ve, they’ve kind of put aside or earmarked a half a billion dollars. for additional projects across the United States. So it’s very clear that the poor nuclear that was really three mile island for, for our, our younger viewers, you know, just absolutely collapsed in 1979. And it was a dreadful nightmare.

[00:01:41] Lee Jackson: Now it wasn’t Chernobyl bad, but it was pretty

[00:01:44] Doug McIntyre: bad, but it melded that listen. did melt. Yeah, the core d United States, I think it slowed almost to a halt t

[00:01:59] Doug McIntyre: Nuclear power and it’s taken this long and a new technology and the desperation. I think you need to understand there is a desperate need for electricity for AI data centers. Otherwise, Oh, absolutely. This conversation would not be happening now. And you’ve got. Every major player in AI is looking for some place to go where they don’t have to literally try to tap the grid and then get into political fights about whether or not residential.

[00:02:31] Doug McIntyre: And legacy business customers are having to pay more, or you’ve got rolling black, all the things that go with having a system that’s overtaxed.

[00:02:40] Lee Jackson: Yeah. And, and absolutely, you’re absolutely spot on, uh, to your point on that, because there’s going to be just an absolute roar. Of the crowd if they start to see electric bills going up because they know that there’s a big AI data center in their neighborhood or in in their city and that’s just that’s just not going to fly and plus when you add in the demand for uh crypto mining and you add in all the other just just the sheer demand for for data centers let alone AI driven data centers It’s phenomenal.

[00:03:16] Lee Jackson: And also because we always talk about fixing our infrastructure in the United States, but we never do our grid is taxed as it is now.

[00:03:25] Doug McIntyre: And it’s taxed. And you know, you still have in places like Texas, you will have rolling brown outs there, parts of the United States where the grid is overtaxed. Uh, look, I’m sure this is going to be good for some of the utility companies.

[00:03:41] Doug McIntyre: If I’m an investor in. Utilities I’m looking for situations where, you know, one of the big tech companies is going to have a partnership, you know, it means sources of revenue. They would never have otherwise, um, you know, interesting to look at the exact financial terms, but you have a desperate group when it comes to big tech.

[00:04:02] Doug McIntyre: So I, I think the utilities are probably cutting. Favorable deals.

[00:04:06] Lee Jackson: Yeah. And it’s the big players that can do it. It’s the constellations and the vistras and the dominions, the, the big utility players, you know, the smaller guys who have half a million people, you know, they’re not really going to go into see if they can gin up something with them, but the big guys, you know, and a lot of those data centers are in the Washington DC area and areas in Texas and, and areas like that where they can access the power.