AI Will Consume 10X the Energy of New York City by 2035
The AI revolution is changing rapidly. And those investors who are properly positioned for it will catch the next wave of extraordinary gains.
2023-2025 were the years of AI software dominance: the time in which Big Tech hyperscalers (AMZN, META, MSFT, etc.) and software as a service (Saas) plays dominated the space. The MAG-7 outperformed the S&P 500 by a wide margin throughout this period.
The outperformance of SaaS AI-centric plays was even more dramatic with market leaders like Palantir (PLTR) going parabolic relative to the broader market!
However, since 3Q25, these trends have stalled out as the AI revolution shifts towards its next major theme. Indeed, the MAG-7 have effectively gone nowhere since September. The former market leaders are now dead money!
And former AI-SaaS plays like PLTR and CRWD have broken down badly!
Is the AI revolution over?
Not by a long shot. It’s simply evolving to its next phase, which is being driven by new market leaders, specifically energy. Indeed, energy is now the bottleneck for the entire AI industry.
According to Bloom Energy’s 2026 Data Center Power Report, over 50% of new data center campuses will exceed 500 MW in energy by 2035, and nearly one-third will surpass 1 GW. To put that into perspective, each 1 GW campus will pwer as much electricity as the city of San Francisco!
So just how much energy will AI need?
According to a report by the Hamm Institute for American Energy, the U.S. will need an additional 1,000 Terawatt-hours (TWh) of digital demand by the early 2030s. To meet this demand, the U.S. will need to build 75–100 GW in energy generating capacity.
This is roughly 10 TIMES the amount of energy the city of New York consumes during its hottest days of the summer!
Put simply, if you are looking for the next MAJOR trend for AI, you need to get away from the MAG-7 big tech and start looking at energy. Indeed, the chart showing the ration of Energy (XLE) to Tech (XLK) has just broken out of a multi-year downtrend.
While the Energy ETF (XLE) is going vertical… breaking out of a FOUR YEAR consolidation period.
Again, there is BIG money to be made from this. And if you’re looking for someone to help you profit , I can show you how.
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Best Regards
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research