Colin’s Note: Last week I shared how I believe AI-enhanced robotics and automation will be the next trillion-dollar opportunity in the stock market…
And it’s easy to see how. Companies that hop on the robotics trend will employ automation to fill the jobs that aren’t as attractive to human workers – whether it’s because they’re too backbreaking or too dangerous. It’s a no-brainer as far as the investment potential goes…
But robotics isn’t the only industry that’s set to get a major boost thanks to the AI rollout…
Today, I’m focusing on data centers… Specifically, the measures companies like Microsoft are taking to cool their massive, resource-intensive data centers…
While the potential of this opportunity might not be as immediately clear as robotics… it’s absolutely essential to the AI megatrend.
I get into all the details in today’s video. Just click below to access it or read on for a transcript that my team and I have edited for flow.
Last week we talked about the next trillion-dollar opportunity in the stock market…
It’s an opportunity I believe could end up being as profitable as being an early investor in Bitcoin or artificial intelligence (“AI”).
That’s because no company is a clear leader in the field.
This is good news for investors. We’re likely to see several companies go from the startup stage to multibillion-dollar valuations.
We’re talking about robotics.
And it’s easy to see how useful this tech is and how the trend will take root… Robotics and automation will help fill jobs that are dangerous, undesirable, and in demand. Companies that have had trouble filling these jobs will become more productive and potentially more profitable.
It will also help bring back industry and manufacturing away from China and other low-cost labor countries back to the United States.
But that reality is still far away – several years away at best, I think. Humanoid robots still need to be developed and manufactured before we see mass adoption.
And there’s always the risk that it never happens.
But today we’re going to talk about technology on the horizon that is already in use and will quickly be adopted in the coming years.
In fact, this technology will be necessary to keep technology like AI on a sustainable path forward. But unlike robotics, it’s not as easy to see the need and understand the benefit of this tech.
So, to understand why this is a great investment opportunity, we have to go inside the data centers where AI applications like ChatGPT come to life.
Take for example Microsoft’s massive new data center in Goodyear, Arizona…
The sprawling 279-acre facility was designed specifically for Microsoft and the Microsoft-funded OpenAI investment.
It plays a critical role in supporting cloud computing and artificial intelligence initiatives, including projects like ChatGPT.
And a key concern that has surfaced is the data center’s water usage.
According to an article in The Atlantic published earlier this month, the center is expected to consume about 56 million gallons of drinking water annually.
That’s the yearly water usage of approximately 670 families in Goodyear where the facility is located.
If you’re not already aware, data centers are energy- and resource-intensive operations.
On one end, the massive number of chips require substantial amounts of electricity to operate.
And at the same time, these power-hungry chips from Nvidia and AMD generate a lot of heat.
The more heat these chips generate, the more the performance level drops. And there’s a risk the computer chips get so hot you get catastrophic failure.
The traditional way of keeping the inside temperature cool enough is through an elaborate combination of fans and air-conditioned water.
Microsoft’s Goodyear facility is just one of many data centers worldwide fueling AI efforts.
But the reality is that these centers are inherently resource-intensive.
Not only that, but most of these technology companies have environmental targets to become carbon neutral within the next decade.
But as Microsoft pointed out in its own research…
Purchasing clean energy is not the same as physically consuming clean energy.
Companies like Microsoft can purchase “clean energy credits” and contribute to clean energy projects that are in other parts of the world.
Then they use the energy or water saved in those locations to offset the usage in places like Goodyear, Arizona.
So the reality is Goodyear’s energy and water can be depleted by Microsoft… But the giant corporation can claim it’s meeting its environmental goals simply because it has offset its usage hundreds or thousands of miles away.
The backlash these trillion-dollar corporations are going to face is only just beginning.
With AI applications growing in popularity and usage, it means more data centers… and more resources needed to keep them cool.
Luckily, there is cooling technology that doesn’t require millions of gallons of water that already exists. And it’s being implemented in more and more data centers.
I believe that in a few years, the method of evaporating water and using traditional air conditioners will be used less and less.
When I was at the Consumer Electronics Show in January, I saw two leading ways to cool servers firsthand.
The most popular – and the most likely to catch on – is directly cooling the computer chips on the server rack themselves. Essentially, it involves circulating a cooled liquid around the AI chips.
A second method is submerging the entire server into a liquid. This method is extremely effective, but likely not something that will be used in large facilities like those Microsoft requires.
Fortunately, we saw this trend early at Brownstone research. Our team recommended one of the leaders in server cooling technology to our subscribers of Exponential Tech Investor back in September (paid-up subscribers can revisit that here).
Shares of that company are already up almost 90%. So, congrats if you’re a subscriber and acted on that recommendation.
Going forward, I see server cooling as one of the most important aspects of the AI revolution.
Not only from an environmental perspective… but from a performance and long-term sustainability standpoint… computer chip cooling needs to evolve away from using millions of gallons of water.