One of Wall Street’s most vocal AI bulls says the biggest risk to the revolution is not valuations, interest rates, or funding.
Speaking in a new Basis Points interview, Wedbush analyst Dan Ives points to energy as the biggest risk factor that could derail the AI trade.
According to Ives, the US has ticked everything in the AI boom list from chips to capital, except for energy constraints.
“I think the biggest bear case around the AI revolution is energy. Because to me, everything else, I feel really like check, check, check… What’s the blind side? Seeing around the corners, what is it? It’s energy because the reality is that China’s way ahead of us in energy, way ahead of us in nuclear. In the US, you get 20% of companies that actually go down the AI path from 3- 4 % today, you don’t have enough energy.”
Ives paints a scenario where AI adoption accelerates across corporate America, only to run into hard infrastructure limits.
“Eventually it’s, ‘Dude, our power went out while watching Netflix. Yeah. There’s a data center upgrade at Microsoft.’
So I’m just trying to explain like energy. I wouldn’t say it’s like a national security issue, but I would say, and I think to me, that is the biggest bear case. It’s not about the funding, Fed or 10-year valuation.”
Ives is not the first to sound the alarm about America’s energy capacity. In January, famed short-seller Michael Burry said that the US cannot expect to sustain its tech leadership absent a massive expansion of reliable power generation.
Earlier this month, Elon Musk said space would become the most economical place to run advanced compute amid terrestrial energy and scaling constraints.
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