What Powers AI May Power Your Portfolio
Artificial intelligence (AI) is the buzzword dominating today’s investment landscape. Companies across virtually every industry believe incorporating AI is essential to remaining competitive. Investors have also been captivated by AI’s transformative potential, driving the rapid rise of stocks closely tied to this technology. But beneath the excitement surrounding AI lies a critical but often overlooked fact: the infrastructure needed to support AI’s massive computing power requires substantial amounts of energy.
Why energy matters to the AI story
AI and its closely related technologies, including cloud computing and high-performance computing (HPC), consume significantly more energy than traditional computing. Training sophisticated AI models or running data-intensive applications relies on vast data centers filled with energy-hungry equipment.
According to the International Energy Agency (2024), global electricity demand from data centers supporting AI infrastructure is expected to more than double by 2030. Here in the U.S., the Energy Information Administration projects that by the end of this decade, nearly 9% of total electricity usage will be consumed by data centers (EIA, 2025).
After years of flat electricity usage in developed countries, AI is creating a noticeable spike in power consumption. This trend presents meaningful opportunities within traditional energy and infrastructure sectors, which must expand rapidly to meet increased demand.
A thoughtful position in energy
At CPC, we have maintained a slightly overweight position in the traditional energy and infrastructure sectors. This choice is deliberate and reflects our careful analysis of AI’s growing energy demand and its long-term implications. Our measured approach to this sector considers several potential beneficiaries:
- Thermal Management Providers: Data centers require advanced cooling systems to manage heat from powerful AI processors, creating steady growth opportunities in this infrastructure space.
- Electrical Infrastructure and Grid Expansion: Increasing AI workloads mean significant investments in power transmission lines and grid modernization potentially driving consistent revenue for infrastructure-focused firms.
- Electrical Equipment and Reliability Solutions: AI demands uninterrupted power, leading to a greater need for backup systems, transformers, and specialized electrical components. This should positively impact companies in this sector.
- Traditional Utilities and Fuel Providers: In the near to medium term, meeting this higher electricity demand will largely depend on existing energy sources, particularly natural gas, offering stability and steady growth potential for utilities and traditional fuel providers.
The role of energy in your investment portfolio
It’s important to emphasize that our slight overweight exposure to energy is carefully designed. Our goal is not to chase short-term trends but to thoughtfully position portfolios for long-term stability and predictable returns, qualities especially valuable for retirement-oriented investors.
This measured approach also helps diversify portfolios away from high valuations often found in the most popular sectors. Energy and infrastructure exposure provides balance and potential downside protection, complementing other areas of your investment plan.
Staying disciplined in an AI-focused world
CPC’s investment philosophy emphasizes discipline, diversification, and thoughtful risk management, especially when navigating the excitement and volatility surrounding transformative technologies like AI. We continually strive to balance enthusiasm for market trends with prudent long-term decision-making, ensuring your portfolio remains thoughtfully aligned with your financial goals.
