The Mainstream’s Still in the Dark

AI and Electricity: Mainstream (Still) Clueless

OK, everything I said Monday about how the mainstream is catching on to the immense demands AI is making on an already-stressed power grid? Never mind.

Yesterday the president ventured to Pittsburgh for an AI-and-energy event. We mentioned it briefly earlier this month.

It was the first big public push by the Trump administration addressing an issue we’ve been screaming about for the last 18 months: AI is quickly becoming “the monster that ate the power grid” — consuming ever-greater quantities of electricity while the capacity of the power grid is constrained.

To illustrate: A single ChatGPT query uses 10 times the electricity of a Google search — an amount equal to running an 8-watt LED bulb for about 20 minutes.

ChatGPT now processes over 1 billion queries every 24 hours — consuming enough juice to power 100,000 typical U.S. homes for that same 24 hours.

Reminder, and we can’t say this often enough: The U.S. power grid’s capacity now is no greater than it was in 2011.

So yesterday’s event was a big deal. And yet, most of the corporate media’s coverage was a mush of words that conveyed a lot of nothing. Really, who’s going to bother reading an article based on these headlines?

• “Trump Promotes Energy and Tech Investments at a Summit in Pennsylvania” (Associated Press)

• “Trump Joins Tech and Energy Executives Amid AI Push” (Reuters)

• “Trump Touts Billions in Investments to Create AI Hub in Pennsylvania” (Wall Street Journal),

The articles were mush as well, never conveying the stakes: If the grid’s capacity isn’t grown — and quickly — we’re facing the prospect of rolling blackouts just to keep AI data centers humming 24/7.

To be fair, some of the blame lies with the White House communications team.

They were keen to tout a big number — $90 billion in investments, not all of it geared toward shoring up the power grid.

“Data centers, energy infrastructure and workforce training,” is how the NewsNation network describes it. And as is often the case with events like this, some of the projects were previously announced.

Too, Trump, his cabinet members and the other speakers kept the emphasis on “winning the AI race with China” rather than “making sure AI doesn’t shut the lights off.”

(It also didn’t help to convey urgency when the president appeared to nod off at one point during the event.)

Don’t get us wrong: It’s good to see the administration taking the issue seriously. But we can’t help wondering if it really has its arms around the scope of the problem. Read on…

Can the Grid Power Zuck’s Ambitions?

The day before Trump’s event in Pennsylvania, Bloomberg News published the following…

Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg said the company is building several massive data centers to power its artificial intelligence efforts with the first one expected to come online next year.

“We’re calling the first one Prometheus and it’s coming online in ’26” Zuckerberg wrote Monday in a post on his social platform Threads, referring to a project in Ohio. “We’re building multiple more titan clusters as well,” he added, a nod to other planned data center complexes.

Zuck seems more invested in giving these projects clever names — Prometheus and Hyperion — than in describing where the juice will come from to power them.

That’s because much of the juice to power these projects still isn’t lined up.

Hyperion alone is a 5-gigawatt project. Zuckerberg “just got one GW of that power from a single nuclear reactor in Illinois,” says Mark Nelson of the energy consultancy Radiant Energy Group.

“There are 10 more reactors here in Illinois. Trouble is, they power Chicago. You can't relocate either Chicago or the reactors.

“Chicago, 100% powered by nuclear most days of the year, doesn't know or care. I have tried to tell the city and I will continue to try. Chicago politicians think they are powered by a solar farm in southern Illinois.”

Addressing the discrepancy is doable — but a steep climb.

“The best way this shakes out,” Nelson writes on X, “is to expand the capacity of the Illinois nuclear plants as fast as possible, first through maximum power uprates of the existing reactors, then by adding more to the plants.

“It will take a full team effort between the utility, reactor vendors, the nuclear engineering sector, the city of Chicago and its business community, the state of Illinois and its politicians.

“We have to try. Failing to grow our power supply, or trying to block one of America's best shots to lead on AI via reactionary anti-data center energy laws, are both unacceptable.”

There’s much more to be said about this story in the weeks and months ahead. We’ve been on top of it since early 2024 and we’re not going to let it go. But for now, we’ll move on to other matters…

The Problem With “Loss Aversion”

“As humans, we are biologically programmed to feel the pain of a loss stronger than the pleasure of a gain. Our bodies react as much as eight times more to losing money than to winning.”

So says Paradigm trading pro Enrique Abeyta. This “eight times” figure is something that’s stuck with me ever since he joined our team last fall.

It’s also stuck in my mind that successful trading means having the discipline to overcome this aversion to losing.

That’s a trait Enrique has mastered across more than 30 decades as a financial professional — including a stint managing over $1 billion for a hedge fund.

His discipline is paying off for his readers. As we mentioned a few days ago, they bagged big gains on the rare-earth miner MP Materials after striking a deal for the Pentagon to take a 15% stake in the company. Yesterday, he said it was time to take the money and run. That’s a 139% gain in just over a month.

All told, Enrique has amassed a 77% win rate — as he explains below in our special 6th Bullet today. There, he shows you two keys to maintaining the discipline that allows him to rack up consistent winners — anyone who trades stocks needs to heed this guidance. (Scroll down if you don’t want to wait.)

The beauty of Enrique’s approach is it enables you to tune out the day-to-day noise. Of which there’s quite a bit today…

The Powell Yo-Yo

Life comes at you fast…

But wait!

And with that, all manner of asset classes have been yo-yoing today. The S&P 500 took a spill of over 0.8% when the first set of headlines broke, only to recover it all with the second set of headlines.

At last check, the index is up just under a quarter-percent from yesterday’s close at 6,244. The other major indexes are also modestly in the green.

Gold also rallied big and then pulled back. But it’s still up $28 on the day at $3,350. Alas, silver still has work to do to get back over $38. Bitcoin hovers a little over $119,000.

Crude is little moved after the release of the Energy Department’s weekly inventory numbers at $66.51.

➢ Worth noting: Federal prosecutors as well as the Commodity Futures Trading Commission have dropped their investigations of Polymarket — the blockchain-powered prediction market spotlighted in yesterday’s edition. “The investigations were closed amid a broader pullback by the federal government from the Biden administration’s crackdown on the cryptocurrency industry,” says The New York Times. Of course, the Times gets all judgy about it, calling Polymarket a “gambling website.”

Pricey Tickets: Inflation and Location

It cost a small fortune to attend Major League Baseball’s all-star festivities this week in Atlanta — and way more than in previous years.

On Sunday, the Axios site reported that the “average sold price” of a ticket for last night’s All-Star Game was $1,183 — far exceeding the previous record of $754 in 2023.

For Monday night’s Home Run Derby, the increase was even more eye-watering — $1,041 compared with $604 two years ago.

Inflation? Yes, that’s still affecting nearly everything even though the inflation rate is down substantially from its peak three years ago.

But location is also a factor: Last night was the first time since 2000 that the All-Star Game was in Atlanta. The last time the game was played anywhere in the Southeast was Miami in 2017.

That previous 2023 record was in Seattle. Curiously, 2024’s All-Star Game in Arlington, Texas didn’t even crack the top five list of most expensive… but last year’s Home Run Derby did come in at No. 4 on the list at $458.

Thus endeth our excursion into financial trivia today…

Best regards,

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets