The Scene
Wall Street isn’t built for consortiums.
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Street → build → consortiums
Blood feuds flourish, and the pressure to outperform rivals leaves little reason to team up with them on investments.
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pressure → flourish → investments
But the sheer size of the AI buildout has competitors playing nice.
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competitors → have → buildout
“There’s enough to go around for all of us,” Brookfield Asset Management CEO Connor Teskey tells Semafor.
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Teskey → ’ → Semafor
Chalk it up to Canadians’ go-along-to-get-along instincts, but the race to shift the cost of the AI buildout — $7 trillion over the next decade, by Brookfield’s estimate — from the hyperscalers themselves to external money managers is making strange bedfellows.
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race → chalk → bedfellows
Brookfield has a joint venture with Nvidia to buy up to $100 billion of AI infrastructure assets.
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Brookfield → have → assets
It’s also in a consortium arranged by the chipmaker to corral another $500 billion alongside Apollo, Blackstone, and KKR — some of Brookfield’s fiercest rivals.
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It → ’ → rivals
Data centers, as well as the hardware inside them and the power plants feeding them, are basically the same as bridges, ports, and other unsexy but economically fundamental stuff that firms like Brookfield exist to build, own, and operate — albeit “on a much larger scale and happening much faster,” he said.
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he → feed → scale
There will still be plenty of losers among data-center financiers, he said.
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he → say → financiers
For power projects, he’s wary of gas, which is slow to deploy, and keener on fuel cells, onshore renewables, batteries, and nuclear.
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which → ’ → cells
“If there’s a single narrative that is most starkly divorced from the fundamentals we’re seeing on the ground,” he said, “it’s the idea that the demand for AI infrastructure and the energy and the supply chain that supports it is in some way fragile.”
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that → ’ → way
This imbalance and the capital requirements for energy are going to last through the end of this decade and beyond.
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imbalance → go → decade
But in an environment where all forms of generation are seeing increased demand, we see certain technologies growing the fastest — fuel cells because they’re the fastest to deploy; renewables because they’re the cheapest form of bulk electricity; batteries and energy storage because they provide stability to an increasingly volatile electric grid; and nuclear because it provides your large-scale baseload and energy security.
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it → see → baseload
Which offers the best returns?
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Which → offer → returns
Down-the-fairway, mature renewables — onshore wind and solar, battery storage — are absolutely seeing the most growth and have the most market participants.
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renewables → see → participants
So maybe your return outcomes are more range-bound.
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outcomes → bind → ?
There is incredible demand, huge capital requirements, and there are far fewer people who have the expertise in order to invest and help pull those projects off of the ground.
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who → be → ground
Therefore, the return requirements are going to be different.
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requirements → go → ?
You’re part of the consortium that Nvidia put together.
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Nvidia → ’re → that
[Nvidia CEO] Jensen Huang has been propping up a huge chunk of the AI buildout.
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Huang → prop → buildout
Are we now at a place where investors who do this for a living are stepping in and backfilling that support?
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who → do → support
If I can play it back to you in a slightly different way, AI infrastructure is growing on a very traditional trajectory that we’ve seen [before].
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we → play → that
Initially it’s done by independent capital providers who look to build and hold the assets.
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who → do → assets
Once the asset class grows, you begin to see banks syndicate the financing.
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banks → grow → financing
Other capital participants come in, whether it’s private credit or insurance.
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it → come → ?
That is exactly what’s happened within AI infrastructure.
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what → happen → infrastructure
The only thing that’s different about this one is it’s happening on a much larger scale and happening much faster.
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it → ’ → scale
I’ve never seen competitors at the same table this often.
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I → see → table
How do you think about places where you want a deal to yourself versus sharing it — and sharing the returns — with your competitors?
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you → think → competitors
We’re seeing one of the biggest energy buildouts in history.
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We → see → history
We’re seeing global trade rewired with an increasing focus on resiliency and production of critical goods closer to home.
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trade → see → home
These are mega-trends that require far more capital than what has traditionally been available from both governments and even the public markets.
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what → require → governments
So why can you get five or six of the leading players at one table?
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you → get → table
But if everyone is in this trade, what’s going to differentiate winners and losers?
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what → go → winners
While it’s easy to paint everything with a single wide brush, there is going to be a dispersion of who performs well and who has some disappointing results.
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who → ’ → results
To be absolutely clear, we’re not doing every opportunity we see.
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we → do → opportunity
We are doing the tiniest fraction.
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We → do → fraction
And even with that very tight filter, we can deploy a tremendous amount of capital.
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we → deploy → capital
Returning to the energy supply question, where do you see gas fitting in here?
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gas → return → question
You mentioned lower-carbon technologies, but all the tech companies are scrambling to get their hands on gas turbines.
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companies → mention → turbines
…and 14 more, not listed.
The Aporia
