Airborne Wind Energy

Managing Editor’s Note: Yet another big week in artificial intelligence, as you’ll hear from Jeff in today’s AMA…

Whispers about the upcoming Anthropic IPO have been gaining volume… It’s an incredible opportunity, if you know how to play it.

But pre-IPO access is often walled off from those outside of the upper echelons of Wall Street, while most investors miss out on the lion’s share of the opportunity.

That’s why Jeff is teaming up with a former Wall Street insider to unveil a strategy for everyday investors to cash in on what is shaping up to be a historic IPO season… before Anthropic and OpenAI have their own trillion-dollar-plus IPOs.

He’s airing all the details – including the names of three pre-IPO recommendations for a few of the season’s biggest IPOs – on Wednesday, September 16, at 8 p.m. ET.

You can go here to add your name to the guest list…

It was another big week in artificial intelligence with Oracle (ORCL) issuing a pretty spectacular earnings report…

• Q1 fiscal year 2027 total revenues jumped 30%
• Q1 fiscal year 2027 total cloud revenues jumped 62%
• Q1 fiscal year 2027 cloud infrastructure revenues jumped 121%
• Oracle’s backlog of business (remaining performance obligations) jumped $209 billion to $664 billion

And Taiwan Semiconductor Manufacturing (TSM) increased its revenue in August by 53.3% year over year. Just astounding growth for a company of that size that still has incredible growth ahead of it.

This incredibly positive news was overshadowed by the psyops I wrote about in yesterday’s Bleeding Edge – AI Doomer Propaganda Machine, which captured most of the media’s attention.

And that fear was compounded by a new AI security report published by Anthropic entitled Detecting and countering misuse of AI: September 2026. Not for the faint of heart, and an issue that we explored in the second question of today’s AMA below.

On a related note, rumors are flying about the imminent filing for the Anthropic IPO. Should be any day now.

It’s hard to imagine that developments will continue to pick up at an even faster pace than what is happening right now. Great opportunities are everywhere.

Have a great weekend,

Jeff

“This Huge Airship Is a Chinese Power Plant”

Hi Jeff & Team,

Being a subscriber for several years, learning more and more from the insights into the future of technology in so many different ways, I watched this video of a Chinese airship that generates 3MW of energy at 6000ft.

Plus, it’s portable. In the video, the author mentions MIT did something similar but didn’t pursue it. What do you think? Is there a company in the US developing this technology? I’d invest in this type of wind energy any day.

– Timothy E.

Hello Timothy,

Thanks for writing about a unique topic.

It’s a bit of a blast from the past for me, as I remember the MIT-related experiment from many years ago.

For everyone’s benefit, the airborne wind energy (AWE) technology that you saw is from Beijing Linyi Yunchan Energy Technology. Shown below is the Stratospheric Airborne Wind Energy Systems (SAWES), which is a helium aerostat 60 meters long with a duct that supports 12 small turbines.

Source:sawestoone.com

The SAWES above was able to demonstrate 385 kilowatt-hours of electricity at 2,000 meters and reportedly fed power to the local grid.

An aerostat is what it sounds like – an aircraft that is stationary in the air, like the above aircraft, which is tethered to the ground.

The idea is pretty simple. Create a blimp-like device filled with helium, float it up to an altitude where the wind is more consistent, which will turn the turbine blades and generate electricity, and send the electricity back down to a base station where it is tethered.

Beijing Linyi Yunchan Energy Technology claims that the technology is good enough up to 3 megawatts, but currently it has only demonstrated about 12% of that level of energy production.

With that said, getting to megawatt-level production is just an engineering problem which can be solved… So long as the wind is blowing, of course (and it doesn’t always blow).

On the surface, it sounds great, right? No need for a massive tower for wind turbines. No need for all that steel and concrete. No need for the large composite turbine blades that can’t be recycled and end up in landfill when they need to be replaced. And no need for all the rare earth metals required for each wind turbine. The SAWES just needs a lot of helium, some small turbines, and wind.

If only it were that simple…

Here’s why we don’t see this form of energy generation:

• It requires helium, which is very expensive and has some serious supply constraints. I wrote an entire issue of The Bleeding Edge – Will Helium Kill the AI Boom this March at the onset of the conflict with Iran. Helium is critical to semiconductor production, and the amount of helium needed to support AWEs at scale is likely unobtainable.
• The cost of the tether is certainly expensive, considering it has to carry both the load of the aerostat and the power generated.
• It has to deal with storms. Lightning. Even ice, if used in cold-weather climates.
• It has to compete with terrestrial energy generation, which I believe would be uncompetitive.

Economically and operationally, this type of energy production is almost certainly only good enough for supplemental energy production and greenwashing.

Where it might make sense is in a location where economics are less important. For example, as a mobile power generator in an off-grid location.

Just send up the aerostat, tether it to a base station with energy storage, and produce electricity. That would make sense, but it would be a lot more expensive and/or intermittent than a portable natural gas generator, or even a microreactor.

As for the link to MIT, oddly enough, I remember when this technology was being tested back in 2014.

Below is a photo of the Buoyant Air Turbine (BAT), which was developed by an MIT spin-out, Altaeros Engines.

BAT | Source: MIT

Altaeros is still private and has raised a number of venture capital rounds. Since its founding in 2010, it has raised about $94 million to date.

Altaeros has since pivoted from airborne wind energy aerostats to communications aerostats.

Basically, in remote areas lacking communications infrastructure, Altaeros’ aerostats can be driven out to location, inflated, and then raised to altitude to effectively establish an airborne communications tower.

Altaeros aerostat | Source: Altaeros Engines

This kind of aerostat has applications in defense, border security, emergency response, extending mobile networks, and other industrial applications. It’s not energy production, but it does have great utility for specific applications.

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Quantum Defense Against AI?

Jeff,

As a Brownstone Unlimited subscriber, I thank you for the money you’ve made for me. While that investment has more than paid for itself, the insights into the ever-increasing world of technology that you provide are a bonus that is just as valuable. No one matches your understanding and your ability to explain often complex matters in a very accessible way.

The recently released report on OpenAI’s Hugging Face breach has deepened my fears of the negative potential of AI in the hands of bad actors. Open-weight and API agents capable of sustained, tool-using action are now in the price range of ordinary crime and design: hundreds to low thousands of dollars to operate.

What is plausible today is significant harm to a specific target that is poorly defended: a company disrupted, data stolen, services disrupted, people hurt through the systems they depend on. All this makes the phishing and malware we have been dealing with today seem minor.

How much of a threat do you think this is? And as AI advances in power, how much will that threat increase? It seems to me that the cybersecurity industry is entering a whole new level of effort: widespread building of intelligent cyber-defense agents, “good” agents, that defend against the “bad” agents. Anti-virus on a quantum scale. Are there players we should be investing in?

The OpenAI thing made me realize what is obvious: that AI is immoral, in the sense that it has no morality. It is a tool that can be used for good and for bad, and there is no control over that, aside from the people who are using it. And while it will provide abundance that can dramatically benefit humanity, it also will provide an abundance of new concerns. How do we prepare for what’s coming? Thanks for all you do.

– Kenneth J.

Hi Kenneth,

Thank you for writing in, thanks for being an Unlimited member, and thank you sincerely for the kind words.

Of course, our primary goal here at Brownstone Research is to help all of our subscribers grow their wealth through our investment research. And equally important to me is to help my subscribers gain a deeper understanding of technology, biotechnology, and asset valuation, so that all of you are empowered to make better investment decisions and better decisions about how to prepare for the future impact of technology.

The issue of The Bleeding Edge – OpenAI Loses Control of its Agents is definitely a wake-up call. Yesterday’s issue of The Bleeding Edge – AI Doomer Propaganda Machine is equally as concerning to me.

This elite cabal of billionaires, bureaucrats, and politicians that are organizing and funding efforts to manipulate us all and scare us into voting in some kind of government control of technological development is far more frightening to me than the actual risk of further developing AI.

Putting that aside, you made the most important point. That being that the costs to use this technology have already dropped to levels that just about any bad actor can afford.

While it is a deeply disconcerting read, Anthropic just published an incredible report about how bad actors around the world are using its technology. I have to warn you, this will be disturbing, but if you are interested, here it is – Detecting and countering misuse of AI: September 2026.

It just came out, so I haven’t had a chance to read it and write about it. But at a high level, it highlights how state-sponsored attacks have been levied, financially motivated criminals have used Claude, state-sponsored propaganda has leveraged the technology, how it’s used as spyware, as surveillance systems, and even to manipulate elections.

I know that sounds awful, and it is. But Anthropic did make one important distinction… these examples are not typical misuse. They are the exception rather than the rule.

Fortunately, there are more good actors than bad actors. And this technology can be used to defend against the bad actors, which is precisely how it is being employed.

To your specific question, yes, this is a massive threat. This advanced technology is already being used for malicious purposes. And yes, the world’s entire cybersecurity infrastructure needs to be upgraded.

Two relevant issues of The Bleeding Edge are The Internet Is Due for an Upgrade and The Next Great Security Build Has Begun. I have made the point that both the public and private sectors need to aggressively harden their defenses against AI-enabled cyberattacks, as well as the threat of quantum computers used for malicious purposes.

The NIST standards now exist for post-quantum cryptography. Now it’s up to industry to build those solutions and deploy them across the world.

To your point, many cybersecurity and quantum technology companies present great investment opportunities, and from my perspective are undervalued right now.

The market is hyper-focused on AI companies, and not thinking about the second- or third-order opportunities like cybersecurity companies that have technology to defend against these emerging threats.

We have one critical player in our Near Future Report portfolio and a few great companies in our Exponential Tech Investor portfolio that are part of this investment thesis. I can’t name them in this issue, but they are available to you as a Brownstone Unlimited member, and you’ll find them in the model portfolios on the Brownstone Research website.

What we are experiencing today is not a new issue. Technology can be a double-edged sword.

Nuclear energy can be used for the production of clean energy, and it can also be used to create nuclear weapons. Machine learning is used for incredible advances in productivity, and it has also been used by bad actors for cyberattacks. Robots can be used for many productive purposes, and they can also be used for weapons and surveillance. A rifle can be used for harvesting food, and it can also be used by a murderer.

AI and AGI are not different. This is the age-old struggle against those who wish to harm or be malicious versus those who proactively work towards economic growth, improved quality of life, technological advancement, and the pursuit of freedom and happiness.

How do we prepare for what’s coming?

Well, I say this as humbly as I can: if you are already reading The Bleeding Edge and the other research that I publish, you are already ahead of 99.9% of the world’s population.

You are proactively building a foundation of understanding of what is happening right now with technological development and advancement. You have a sense of what’s coming, what the future will hold.

Building that awareness and understanding is preparation. It not only helps prepare the mind for understanding great investment opportunities, it also provides needed context for making decisions about our lives.

That might be related to our health, where we might choose to live, what our asset allocation looks like, what kind of backup support systems we might put in place for our families, whom we choose to do business with (i.e., with people/companies we trust), or being aware enough to identify a psychological operation versus something real.

I’m here to help my subscribers stay informed, stay sharp, understand the issues and opportunities, and empower everyone to make decisions that will be best for them and their families.

At least, that’s my goal. And as this crazy world that we find ourselves in evolves, you can be I’ll be on top of whatever is happening.

Back-up Power for the Local Grid?

In response to Nick Rokke’s piece on the independent data center power plants – The Grid Said No… So Amazon Built Its Own Power Plants…

If the current civilian plants go down, these data center power plants can (and will IMO) be used as back-up power for the local communities… just saying…

– Robert M.

Hi Robert,

You’re not wrong at all. It’s less about civilian plants going down, though, and more about providing energy back to the grid during unusually high demand periods. And you might be surprised to know that this is already happening.

At Microsoft Dublin, they have a deal with the local power company EirGrid to use energy stored on batteries to provide a fast frequency response to the public power grid when needed. This is a commercial agreement whereby Microsoft would get paid for the electricity provided.

In Freestone County, Texas, the Public Utility Commission of Texas (PUCT) approved a 1,099-megawatt natural gas plant paired with a 760-megawatt data center. Part of the deal is that if the Electric Reliability Council of Texas (ERCOT) instructs the data center to cut its power load and provide up to the entire output of its private power plant to the ERCOT grid within 30 minutes.

So, there is already precedent for these kinds of deals, and we’ll likely see more of them, especially where local municipalities are resistant to permitting new data center construction. If there is a benefit of additional power generation, it might make for an easier sell.

In time, however, as our power generation becomes more decentralized thanks to SMRs and nuclear fusion, our power generation and transmission infrastructure will become a lot more resilient and cleaner than it is today.

In time, this will be a net benefit to both consumers and businesses… electricity prices will decline, and supply will also become more stable.

Jeff