Podcast & Video Of The Week

How AI & Sovereign Debt Levels Could Have An Impact On Oil & Energy Markets

The last week has been an interesting one for markets, as it looks like oil is starting to perk up, while coal (and coal stocks) has been selling off. While we are entering a seasonally weak period for coal, I wouldn’t be surprised to see oil price (and stocks in the sector) have a strong run into the summer. This week’s podcast and video are focused on some of the big picture themes that impact stocks that I focus on, and some of the things that are definitely going to have an impact on energy markets moving forward, whether it’s AI, or sovereign debt levels. Later this week, I’ll be writing a portfolio update, where I give updated weights after some recent trades I have made over the last couple weeks. I think I’ll have a surprise coming for next week’s video of the week post, so keep an eye out for that as well.

Know Your Risk Radio w/ Le Shrub

Le Shrub is one of the more entertaining follows on fintwit, and his appearance on this podcast gave me some food for thought on AI and it’s impact on the grid. They discuss valuations, energy markets, sentiment swings, Nvidia NVDA 0.00%↑ and Super Micro Computer SMCI 0.00%↑, among other topics. I’ll leave readers with a quote from the podcast that should raise some questions on where all of the energy to power AI is going to come from.

Shrub: If you look at Nvidia’s results, you have to get excited about energy, because one Nvidia GPU (graphics processing unit) consumes as much as one US household in energy…. Basically, one household consumes 29 kWh (kilowatt hours) per day, one Nvidia H100 consumes, at a 60% utilization, 10 kWh per day…. I have estimated that Nvidia is going to sell two million H100s in 2024, and that would add (the equivalent of) 690,000 US households to the grid. The average household formation in 2023 was 1.67 million.

Host Zach Abraham: There’s another one, there’s another power consumption on the other side of it, because the cooling costs have got to be outrageous as well.

Shrub: So basically, the Nvidia GPUs are increasing power demand by 40% more than the baseline level of growth.

Peak Prosperity w/ Luke Gromen

This was one of my favorite videos of the last week. Luke Gromen has been focused on the interconnected nature of energy, debt, and financial markets, and breaks down the path he sees for the next several years. They focus on energy markets, talking about the potential for peak cheap oil, and connect dots between energy and sovereign debt markets. It’s worth a listen for anyone focused on the big picture for financial markets and how oil and gas are going to have an impact on debt markets moving forward.