Physical AI and Money Rails
Charlie Madden@charliemadden
−7.0%
since Oct 2
The idea
I believe AI's real impact shows up in the physical economy, not in software incumbents, so I've deliberately skipped SaaS and the soft Mag7 layer. Instead this take concentrates in grid equipment, power generation and uranium, the silicon supply chain, and data center buildout, plus a monetary plumbing leg spanning bitcoin, crypto rails, and miners repurposing power into AI hosting. I hold a cash buffer, size positions to avoid single-name bets, and treat this as a multi-year build that I'd rethink if the capex cycle itself stalls.
What it owns
- Transformers, switchgear, turbines and distribution gear face years of backlog, and every new power source and data center requires them regardless of which AI systems win. · GE VernovaIt makes the gas turbines and grid equipment that turn power bottlenecks into revenue, capturing orders that are outrunning supply., Eaton CorporationIt supplies switchgear and power management hardware for every data center and grid upgrade, with backlogs stretching years ahead., Quanta ServicesIt provides the labor that builds substations and strings transmission wire, capturing the construction bottleneck that equipment backlogs cannot overcome without crews., Hubbell IncorporatedIt sells the connectors, enclosures and distribution gear that every grid upgrade requires, operating at the picks-and-shovels end of power infrastructure spending., Powell IndustriesIt builds custom electrical distribution equipment with order books swinging toward data centers, the purest small-cap expression of the grid equipment bottleneck.25%
- The accelerator chips, foundry capacity and high-bandwidth memory that constrain the entire capex cycle and command pricing power as long as supply stays sold out. · NVIDIA CorporationIt is the silicon accelerator that the entire capex cycle buys, holding value as long as demand and pricing power persist with constrained supply., Taiwan SemiconductorIt fabricates nearly every leading-edge AI chip, making it the critical choke point under the entire hardware stack while advanced-node capacity stays sold out., Micron TechnologyIt supplies high-bandwidth memory that every AI accelerator needs more of, with supply sold out ahead and pricing power holding as long as the shortage persists.16%
- Firm generation capacity and uranium fuel feed the power squeeze as data center demand outpaces current supply, extending reactor lifespans and driving new builds. · Constellation EnergyIt owns the largest US nuclear fleet offering firm carbon-free power, signing long-term data center contracts that push electricity prices higher as demand grows., Vistra CorpIt sells firm power into markets where data center demand is tightening supply fastest, working as long as compute-driven electricity demand outpaces new generation., Cameco CorporationIt is the western uranium supplier for the nuclear restart, holding as demand from reactor life extensions and new builds outpaces mine supply., Oklo IncIt is pre-revenue small reactor technology for siting next to data centers, a speculative option bet on regulatory approvals and customer contracts landing.15%
- Programmable money as the settlement layer for an agent economy, from spot Bitcoin through the exchange and stablecoin infrastructure that processes transactions. · iShares Bitcoin TrustIt holds spot Bitcoin, the monetary plumbing bet in its purest form for settlement and store of value in an agent-driven economy., Coinbase GlobalIt operates the exchange, custody and blockchain settlement rails where agents would transact, holding value as on-chain activity and institutional adoption grow., Circle Internet GroupIt issues USDC stablecoin, the dollar-settlement layer for programmable money, holding value as agents collapse payment friction and stablecoin volume grows.13%
- The companies physically constructing data centers and installing power, cooling and electrical systems capture the direct revenue from the capex wave. · Vertiv HoldingsIt sells the power distribution and cooling inside data center shells, directly tracking data center construction velocity., EMCOR GroupIt provides the electrical contracting labor wiring data centers, capturing the construction pipeline as the human constraint on the build., Digital Realty TrustIt owns finished data centers and collects rent on power-connected capacity scarcity, where rising lease rates reflect persistent bottlenecks or oversupply shows up first.13%
- Bitcoin miners with secured power supplies are converting to AI compute hosting, bridging the energy infrastructure leg and the money rails leg of the take. · IREN LimitedIt is converting contracted power sites from Bitcoin mining into AI compute hosting, bridging power assets and compute demand at the energy-economy intersection., TeraWulf IncIt operates zero-carbon power at scale, exactly what AI data center tenants want to contract, working if hosting conversions land at good terms., Core ScientificIt has already signed large AI hosting deals and is furthest along converting from mining to landlord operations, holding as hosting contracts expand and materialize.10%
- Cash8%