Shocking Elon Musk Speech

Christian DeHaemer

Posted March 14, 2024

Shocking Elon Musk speech

I caught a transcript of an Elon Musk speech from March 1, 2024, and it shocked me.

Musk said, 

“I’ve never seen any technology advance faster than this. The chip shortage may be behind us, but AI and EVs are expanding at such a rapacious rate that the world will face supply crunches in electricity and transformers next year.”

The artificial intelligence compute coming online appears to be increasing by a factor of 10 every six months. Like, obviously that cannot continue at such a high rate forever, or it’ll exceed the mass of the universe, but I’ve never seen anything like it. The chip rush is bigger than any gold rush that’s ever existed.

The constraints on AI compute are very predictable… A year ago, the shortage was chips; neural net chips. Then, it was very easy to predict that the next shortage will be voltage step-down transformers. You’ve got to feed the power to these things. If you’ve got 100-300 kilovolts coming out of a utility and it’s got to step down all the way to six volts, that’s a lot of stepping down.

Then, the next shortage will be electricity. They won’t be able to find enough electricity to run all the chips. I think next year, you’ll see they just can’t find enough electricity to run all the chips.”

The truth is that AI is a huge energy suck.  AI already consumes as much as a country like Brazil and will hit 3.5% of global electricity consumption by 2030.”

We need more power

To meet these new electricity needs the Department of Energy recently announced that it is granting $750 million to projects across 24 states that are building capacity to produce and use clean hydrogen.

You get hydrogen by splitting the H2O molecule.  You can then put it in a fuel cell which can power cars, trucks, or anything else.  The technology is clean and has been around for decades.  Chances are you have been on a hydrogen-powered bus.

The problem is in where you get the power necessary to deconstruct water as well as in the infrastructure.  Today the vast majority of hydrogen is produced using fossil fuels.

The new funding will work on various aspects of the hydrogen industry, production of electrolyzers, securing supply chains for the machines, and recycling critical materials used in hydrogen production, such as iridium.

The government thinks that the spending will boost the country’s electrolyzer capacity from a couple of gigawatts per year to 10 GW, enough to produce 1.3 million tonnes of clean hydrogen annually.

Two hydrogen companies are Plug Power (PLUG) and FuelCell Energy (FCEL) neither of which I want to own at this point.  Other companies are playing around with hydrogen, like BP for instance, but they aren’t pure plays and the hydrogen component won’t matter in terms of revenue.

That said, you should put some of these stocks on your watch list and wait for a breakout.  When they run they really run.

All the best,

Christian DeHaemer
Pro Trader Today