Energy & compute
Intelligence is now an energy business wearing a software valuation.
The thesis
Compute buildout is gated by interconnect, transformers, and cooling water long before it is gated by chips. The scarce asset is a site with firm power and a grid connection on a timeline that matters.
That reprices a set of unglamorous businesses: behind-the-meter generation, grid equipment, thermal management, and the developers who can navigate a permitting process end to end.
Capital structure
These are infrastructure returns financed with infrastructure instruments, increasingly underwritten against single-tenant offtake from a small number of counterparties. Concentration risk is the thing to price, not demand.
The bear case
If model efficiency gains outrun demand growth, contracted power becomes a stranded cost with a twenty-year amortisation and a five-year tenant.
What we'd watch
- Interconnect queue times in the primary corridors
- Turbine and transformer lead times
- Contracted versus utilised capacity at the largest buyers
- Local permitting outcomes where water is the constraint
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