Remember when Microsoft needed so much electricity for its AI data centres it was paying to re-open the controversial Three Mile Island nuclear plant in Pennsylvania? The company behind that deal, Constellation Energy, which when not in nuclear is big in natural gas, had been on a run - and that TMI anecdote was rocket fuel for the stock.
Constellation, along with a clutch of other US energy firms and utilities, had seen its valuation explode over the past year as the narrative cemented that AI/data centres were about to strain electricity supply. Other companies often mentioned in the same breath, such as Vistra and Talen, went on spectacular bull runs:
And despite the fact that Nvidia chips (with some alternatives) tend to be the biggest beneficiaries of the AI boom as they make up 60-80% of the cost for creating and training a Large Language Model like GPT-4 - some estimates put it at $600 million for that model - some 10-20% of the cost would be for electricity al…
