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Key Takeaways:

• Global data center spending is expected to surpass $1 trillion by 2034, driven by AI, cloud buildouts, and national digital investment strategies.
• AI infrastructure is fueling massive electricity demand, with data centers consuming up to 15% of grid capacity in some U.S. regions.
• This demand is creating ripple effects—higher household utility bills, power grid strain, and urgent calls for energy reform.
• Nuclear power is re-emerging as the clean, scalable solution—thanks to policy shifts, SMR development, and Big Tech interest.
• Trump’s 2025 executive order reclassified uranium as a critical mineral and set a long-term goal to quadruple U.S. nuclear capacity by 2050.

Once a quiet corner of tech - hosting servers and storage systems no one cared about - data centers are now driving the economy.

What was once niche infrastructure is now the industrial engine of the digital age - some even call it the fourth industrial revolution - powered by an AI and cloud boom spreading like a virus (no pun intended. Okay, maybe a little intended).

We’ve all seen the headlines - “AI Is Taking Over the World,” and “These 3 AI Stocks You Must Buy Now,” and “How AI Will Cause Surging Unemployment.”

Sure, it’s noisy. Maybe overhyped.

But here’s the thing – whether we agree or not, there’s truth behind the hype.

Why the AI Boom Is Driving Explosive Infrastructure Growth

Did you know that global data volumes are doubling every two years?

Meanwhile, here are some other stats that really emphasize this rapid growth.

• The global data center market is projected to soar from $386.71 billion in 2025 to over $1 trillion by 2034, growing at a rare 24% CAGR¹.
  
  
• Even the global AI infrastructure market (a subset of data centers – like the GPUs and hardware and cooling, etc.) is expected to hit $223.45 billion by 2030 - growing at a whopping 30.4% CAGR from 2024–2030².
  
  
• Corporate AI investment reached $252.3 billion in 2024 - a more than 1,300% increase since 2014.
  
  
• Generative AI usage has more than doubled - with 71% of organizations implementing it in at least one function in 2024, compared to just 33% in 2023.

Figure 1: Yahoo Finance, May 2025

These staggering investment numbers are driven by four big factors:

• Gen AI adoption: Training and running foundation models requires massive compute power, with inference workloads expected to dominate by 2030.
  
  
• Enterprise demand: As industries deploy AI across sectors, cloud infrastructure needs are scaling fast to support increasingly specialized models.
  
  
• Infrastructure race: Hyperscalers and enterprises are rapidly building proprietary AI capacity to gain scale and drive down compute costs.
  
  
• Geopolitical drivers: Governments are ramping up AI infrastructure to boost national security, economic strength, and tech sovereignty.

And this AI arms race has turned data centers and AI infrastructure into a new economic engine in the U.S. – carrying growth higher.

For example, according to Apollo, data center construction added a full point to Q1 2025 GDP growth - the biggest boost since the dot-com boom, and over 8x the average impact of the past decade³.

Figure 2: Apollo Academy, May 2025

But Growth This Fast Creates Ripple Effects And Eventual Demise

So while this growth is impressive and exciting, as always, it isn’t a free ride. . .

For starters, such high growth is often unbalanced growth.

Put another way, historically, rapid investment often leads to gluts. Too much capacity, too fast, hurts margins.

• I’ve written more about how this dynamic plays out in “The Capital Cycle: Do Supply Trends Drive Markets More Than Demand?”

As all these trillions of dollars flow into the AI and digital space, it will inevitably lead to diminishing returns where each new dollar produces less growth or returns.

• Think of diminshing returns like eating pizza - the first slice is amazing, the second still hits the spot. But by the fifth or sixth? You're full, and pushing for more just makes you queasy. That’s the risk with overinvesting - what starts as a sweet opportunity can quickly lead to saturation, waste, and discomfort.

This is why these kinds of booms often sow the seeds of their own busts.

And while this is an issue, it’s still likely years away.

For now, a more pressing thing is that these data centers are energy hogs. They need electricity not just for computing, but for cooling, security, networking, and backup systems.

And all this AI-fueled infrastructure is straining real-world systems - especially the power grid.

• In parts of the U.S., data centers now consume 10–15% of total electricity, pushing grid demand to 20-year highs.
  
  
• On the PJM Interconnection grid - which spans Illinois to D.C. – that higher demand translated into $9.4 billion in added costs, now showing up on consumer utility bills⁴.
  
  
• In Northern Virginia - the epicenter of U.S. data centers - these facilities pull 15% of total grid power and are expected to push peak demand 32% beyond today’s capacity within 15 years.

This is worrying as now average Americans are effectively subsidizing Big Tech.

• More AI energy demand = higher energy costs = higher bills for everyone.

And this is just the tip of the issue.

According to a recent report by Deloitte, AI data center power demand is projected to surge from 4 GW in 2024 to 123 GW by 2035 - a more than 30x increase⁵.

Figure 3: Deloitte, June 2025

Meeting this demand will require massive upgrades to the U.S. power system. Things like transmission lines, new generation, substations, and zoning reform.

Because of this, utilities are scrambling and regulators are asking whether deregulated markets can even scale fast enough.

And let’s not ignore the emissions problem – with most U.S. data centers still running on natural gas and coal. That’s a tough pill to swallow amid climate concerns.

Why Nuclear - and Uranium - Are Making a Comeback

You might be thinking: “Okay, the AI boom is real. The power grid is strained. But what’s the clean, scalable fuel source to support it all?”

Exactly my thoughts.

Instead of focusing on what is already being talked about, it might make more sense to look at what could benefit from all this before it gets over crowded.

That’s why – I believe - the ripple effects of this AI boom and climate caution give nuclear energy a renaissance.

As the need grows for carbon-free, 24/7 energy, uranium is making a comeback.

• Unlike wind or solar, nuclear runs non-stop.
  
  
• Small Modular Reactors (SMRs) are gaining regulatory traction.
  
  
• Tech giants like Amazon, Google, and Meta are already exploring nuclear-backed energy deals.

More importantly, in May 2025, Trump reclassified uranium as a critical mineral and invoked the Defense Production Act to boost U.S. mining and enrichment, aiming to reduce reliance on foreign suppliers. His executive orders also set a long-term goal to quadruple nuclear power capacity by 2050 - triggering a surge in uranium-related equities and accelerating domestic fuel cycle investment.

Uranium itself is trading at roughly $80 per pound as of yesterday.

Figure 4: Trading Economics, June 27th 2025

Of course, more mining = more supply = potential price pressure (yep, the capital cycle again). But that’s likely some time away.

Final Thoughts

We’re no longer just in a tech boom. We’re in a power boom. An infrastructure boom. A uranium boom.

As demand outpaces energy infrastructure, Big Tech’s ambitions are now colliding with the real-world constraints of grids, fuels, and regulation. And that means new winners - and risks - are emerging far beyond Silicon Valley.

The question isn’t whether this boom is real. It’s whether it can sustain itself without overheating. Because like every capital cycle, the seeds of saturation are already being sown.

For now, the data center and AI boom is running. But energy may be the new gatekeeper.

As always, I’ll keep you posted.

Enjoy your weekend.

Sources:

1. Data Center Market Size Hits USD 1,008.65 Billion by 2034
2. AI Infrastructure Market Size To Reach $223.45Bn By 2030
3. Apollo | Data Center Construction Contributing One Percentage Point to GDP Growth
4. BBG | Data Centers Added $9.4 Billion in Costs on Biggest US Grid
5. Deloitte: AI Data Center Power Demand Could Surge 30x by 2035, Amid Power and Grid Capacity Constraints
6. Trump's nuclear energy orders would boost uranium prices, investments, experts say | Reuters

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