AI, Energy, and the Future of Abundance

Exclusive Essay by Matt Smith

"I'm not here this morning to talk about AI safety, which was the title of the conference a couple of years ago. I'm here to talk about AI opportunity.”

~ U.S. Vice President JD Vance at the AI Action Summit in Paris

Lau here. It’s been a fast-moving several weeks since Donald J. Trump took office as the 47th President of the United States. We had a flurry of executive orders right out of the gate—gutting regulations, unleashing DOGE on federal agencies, removing barriers to AI development, and laying the groundwork for the most aggressive push for American energy dominance in decades.

Looking at all this, you might feel a little confused—even bewildered. Sure, we applaud these actions and many other things this administration is doing, but what’s the endgame? Could it be about more than just cutting government bloat and reining in out-of-control spending?

If you’ve been wondering about that, you’ll want to read today’s essay closely.

It comes from my friend Matt Smith—an independent thinker, a self-described cattle rancher in Uruguay, and the voice you know well from his podcasts with the legendary Doug Casey.

Matt lays out a vision that helps make sense of what’s unfolding right now. He introduces the “Infinite Pie” concept—a future where breakthroughs in AI, robotics, and global deregulation converge to unlock extraordinary growth and innovation. But there’s a catch. There’s a bottleneck. And for savvy investors, that bottleneck is a golden opportunity.

We originally ran this essay in the January issue of Crisis Investing and planned to keep it exclusive to our subscribers. But after watching JD Vance’s speech at the AI Summit in Paris on Tuesday—where he pushed back against global AI regulations and championed America’s leadership in the space—I realized just how urgent and important this message is. His speech was a clear-cut confirmation of Matt’s thesis—frankly, it’s almost like Matt himself wrote it—and a strong signal of just how rapidly things are moving.

So, I asked Matt if we could share it with our entire mailing list, and he agreed.

It’s not a short read, but I encourage you to take the time. It might just change the way you see not only the next four years but the decade ahead.

I hope you find it both insightful and profitable.

Without further ado, here’s Matt…

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AI, Energy, and the Future of Abundance by Matt Smith

For the past several weeks, I’ve been reading about the late 19^th and early 20^th century in America just to get a better sense of the scale of change that took place in a handful of decades. Over an impossibly short period unimaginable facets of life came on the scene. The Industrial Revolution ushered in cars, the telephone, cinema as both art and industry, air travel, pro sports, and radio. Not to mention the breakthroughs in chemical processes and manufacturing. This was when every kind of consumer product—and all the conveniences we now take for granted—started to emerge. Even things like advertising, industrial design, and urban planning took off during this wildly disruptive era. Opportunity galore.

Now, I’m not saying it was a great experience for everyone involved. Far from it. Generations of Americans found themselves trapped in the old system, unable to escape it. And no one had it worse than small-scale farmers, most of whom were wiped out and forced into factory jobs in America’s cities.

Keep in mind, in the 1870s, a family farm was seen as the ticket to economic stability—just as a bachelor’s degree and white-collar jobs are today. Well, the Industrial Revolution upended that completely.

In the 1870s, 52% of America’s workforce was in agriculture. By 1900, it dropped to 40%. By 1920, it was just 26%. The trend was impossible to ignore.

Today, less than 1% of the workforce is involved in farming.

So, yes, it was a radical change. Plenty of people paid the price along the way. But those industries I mentioned earlier (that once seemed unimaginable) created opportunities and prosperity no one could have foreseen. In the end, Americans came out the other side better off.

But what’s coming now will be even quicker and more radical.

Keep in mind, America’s Industrial Revolution saw its most disruptive changes between the 1870s and 1920s—a 60-year stretch. The AI revolution, however, will come much faster.

For perspective, Goldman Sachs projects AI will automate about 300 million jobs within the next decade, while the CEO of Anthropic, creator of Claude AI, predicts human-capable AI could replace 30% of human labor in just the next two years.

I tend to agree—most disruptive changes will likely happen in the near term, within the next several years to a decade.

Last year alone, 150,000 tech workers lost their jobs across major companies, many due to AI-driven efficiencies. That’s still far from the projected 300 million jobs or 30% of global labor being replaced, but it’s where we’re headed.

Most countries won’t risk getting left behind in this unprecedented race for productivity—it would quite literally destroy their economies. The stakes are too high for anyone to sit this one out.

Yes, what’s coming will be incredibly disruptive. The changes will turn people’s lives upside down, but the end result doesn’t have to be a bad thing. Between now and then, the key is, first, to avoid the fate of the small-scale farmer of the 1870s, and second, to find a way to benefit from the radical changes ahead. AI and robotics will replace countless white-collar and blue-collar jobs, but they’ll also unlock massive opportunities, just like the Industrial Revolution once did.

The Infinite Pie

Better productivity, more automation, big cost savings, better products, brand-new industries, better drugs, customized healthcare, longer and healthier lives… The list goes on because the possibilities really are endless.

Innovation like this can drive the cost of production for virtually everything you can imagine to a fraction of what it is today.

I like to call it the "Infinite Pie" vision.

It’s the idea that, with the rapid rise of AI tools, automation, and robotics, humanity has the chance to redefine its future completely. If everything were much cheaper and easier, what would you do?

Even now, AI tools are already transforming white-collar industries, helping companies and professionals get more done with fewer resources.

• JPMorgan’s AI system, COIN (Contract Intelligence), can process 12,000 commercial loan agreements in seconds—a job that would take humans roughly 360,000 hours a year.

• Morgan Stanley rolled out an AI assistant called "Debrief" for its 15,000 wealth advisors. It handles note-taking and meeting summaries, saving about 30 minutes per meeting. With around 1 million Zoom calls a year, that adds up to 500,000 hours saved annually.

• Companies using AI for their marketing strategies have seen response rates jump by 40% while cutting deployment costs by 25%.

• At Goldman Sachs, AI can now draft 95% of an IPO prospectus in minutes—a job that used to take a 6-person team weeks to complete.

• Mark Zuckerberg, on a recent Joe Rogan podcast, said that this year—2025—Meta will have an AI that works like a “mid-level engineer writing code.” To give you an idea of the savings, Meta has 15,000 mid- and low-level software engineers making $175,000 to $260,000 a year.

But that’s just the beginning… We’re barely scratching the surface of what’s possible. And it’s not limited to white-collar industries either.

AI-driven advances in robotics are already disrupting blue-collar labor markets by automating complex tasks and boosting productivity. Here are a few examples I’ve come across recently:

• Ocado, a UK-based online grocery retailer, operates one of the most advanced automated warehouses globally where 3,000+ robots pick and pack 65,000 grocery orders weekly (significantly reducing labor costs). The firm has licensed its technology to major international retailers, including Kroger in the U.S.

• Foxconn, a major Apple supplier in China, has installed over 40,000 industrial robots in to automate iPhone assembly and is on track to automate 30% of its operations by 2025.

• China’s BYD operates fully automated “smart factories” where its robotic workforce, including 500 humanoid robots, performs assembly, inspections, and heavy equipment handling. BYD overtook Tesla as the world’s largest EV manufacturer in 2023 with 1.8 million EVs delivered compared to Tesla’s 1.7 million. And every year, BYD’s cars get better and less expensive.

• Tesla’s "unboxed" manufacturing process cut factory footprints by over 40% and slashed production costs thanks to AI and automation.

Beyond transforming existing industries and making things cheaper, AI is also creating innovative products and opening up entirely new markets—AI-designed custom-tailored footwear, AI-driven drug discovery, robotics in agriculture, breakthroughs in the beauty industry, and so much more. And the wild part is, we’re barely a few years into all of this with real momentum.

The upshot is that AI is a breakthrough technology making many new and unexpected things possible. That’s the bigger picture. But to really understand it, let’s think back to the Industrial Revolution again—back then, that breakthrough technology involved steel.

Before the 1870s, steel production in the U.S. was a painstaking, artisanal craft. Workers toiled over puddling furnaces, manually stirring molten iron to burn off impurities. The process took days and produced just 10 to 20 tons of steel per worker each year. The metal was expensive, inconsistent in quality, and limited to small-scale uses like tools or rails.

In the 1870s, the adoption of the Bessemer process—a method that blasted air through molten iron to quickly remove impurities—transformed steelmaking. What once took days could now be done in minutes. Factories hummed with mechanized rolling mills and cranes, while industrialists like Andrew Carnegie built vertically integrated steel empires.

By the 1890s, a single steelworker, with the help of machines, could produce over 300 tons of steel a year. That’s a 30-fold jump in productivity compared to the artisanal methods of just a few decades earlier.

The impact was revolutionary. Steel prices plummeted from $100 per ton in 1870 to just $12 by 1900, making it affordable for skyscrapers, bridges, and railroads. Steel became the backbone of modern infrastructure. Cities like Pittsburgh became industrial giants, and by 1900, the U.S. was producing nearly 40% of the world’s steel. What was once slow, manual labor turned into an efficient, mechanized process, paving the way for modern mass production.

This leap—from human hands to mechanized might—didn’t just make steel cheaper. It reshaped the economy, redefined work, and showed how technology could multiply human effort on an unimaginable scale.

Well, guess what: as a breakthrough technology, AI makes the Bessemer process look inconsequential by comparison.

It’s mind-boggling to think about what could soon be possible. Yes, there will be sacrifices along the way, but much like after the Industrial Revolution, Americans will come out better off in the end.

The Bottleneck 

When I think back to the arrival of ChatGPT in November 2022, it wasn’t just a tech milestone—it was a wake-up call. Yes, it showcased AI’s potential to transform the world. Suddenly, you could ask questions, write essays, or brainstorm ideas effortlessly.

But it also revealed a massive problem: AI is a power hog.

Take ChatGPT, for example. Every query you make consumes significantly more energy than a simple Google search—estimated at 3 to 30 times more. It’s like every question you ask burns a teaspoon of oil, or something similar in energy terms.

This is why systems like ChatGPT, Google’s Gemini, and Elon Musk’s xAI depend on massive warehouses of specialist computers—data centers—to function.

And data centers require enormous amounts of power.

To put this into perspective, data centers powering the internet already consume about 1% of the world’s electricity. According to the energy research journal Joule, global AI-related electricity consumption is projected to rise 56% by 2027—from 85.4 TWh to 134 TWh. That’s higher than the annual electricity usage of Argentina, a country of 45 million people. And I think it’ll go much higher than that.

For comparison, Bitcoin mining consumes about 120 TWh per year. Remember the outcry about Bitcoin’s energy use? Well, that’s nothing compared to what’s coming with AI.

McKinsey & Company projects that, by 2030, power demands from data centers will double, driven by the intense computing needed to scale AI systems. A single server rack for AI consumes 80 kW of power per hour—16 times more than traditional servers. Multiply that by hundreds or thousands of racks in one data center, and the numbers are staggering. In my opinion, McKinsey’s estimates will prove far too low.

The reality is that there won’t be a limit to how much electricity AI will consume—it’ll use everything we can produce.

And that’s the bottleneck.

Energy is the defining constraint for the AI revolution. And it’s not just about powering data centers—it’s about something much bigger.

You see, there’s a crucial relationship between energy, intelligence, and wealth.

For investors who understand these links, the next decade will produce an unprecedented amount of wealth. And when you look back on the history of mankind, well, these links are rather obvious.

My friend, Porter Stansberry, recently used London, the capital of the United Kingdom, as an example to illustrate this point.

At the dawn of the 20th century, London had swelled to 6.5 million residents. This made it not just the world's largest city, but the biggest urban center civilization had yet produced. That kind of growth doesn’t happen by chance. So, how did it happen?

Energy.

You see, back in the 16th century, the English relied on burning trees for energy. But as the population grew, they started running out, and that meant running out of power. Everyday people had trouble securing enough energy to cook food and heat their homes. This energy shortage wasn’t just inconvenient—it put their entire civilization at risk. The English navy, vital for defending their small island nation, required massive trees to build warships.

Then came coal.

The English began developing coal mining, and within a century, coal shipments into London skyrocketed from just 35,000 metric tons to just under 500,000 tons. What started as a luxury for royalty heating castles became the dominant energy source for the entire city.

The labor involved in mining and transporting coal was staggering—keep in mind, railroads wouldn’t be invented for another hundred years. But it made sense. Coal contained twice as much energy per pound as wood and, unlike trees, was far more practical to extract and transport at scale.

It was a game changer. With this newfound energy, the British Empire thrived. It’s no coincidence that the British Isles became the birthplace of the 19th-century Industrial Revolution.

And like I said, this is exactly where we’re standing right now—on the doorstep of the next industrial revolution. Its fruits—intelligence and wealth—will only be limited by the amount of energy we can unlock.

Nowhere is this more apparent than with Nvidia’s latest breakthrough: the world simulator chip, part of its Omniverse platform. This isn’t just another processor—it’s a complete paradigm shift in intelligence. It’s a new way of thinking, inherently superior to human reasoning. And that’s precisely because it doesn’t rely on human-style "thinking."

This is a game-changer for robotics as we know it.

Now, robots have been workhorses in industry for decades, but they were pretty one-dimensional—think assembly-line arms doing the same exact moves over and over. While these machines are great at specific tasks, they need precise programming for everything. Now that's changing with the rise of general-purpose robots powered by AI. Unlike their rigid predecessors, these machines can adapt on the fly, make sense of messy real-world environments, and handle all sorts of different jobs without needing constant reprogramming.

Powered by AI, they bring massive productivity gains—cutting costs, reducing errors, and working 24/7 in sectors like manufacturing, healthcare, and retail. Their ability to “think” and adapt opens up possibilities once thought of as science fiction, like managing supply chains, aiding in disasters, or caring for the elderly. Ultimately, many of us will have these in our homes too.

These general-purpose robots can come in various forms—some humanoid, others like Unitree's B2-W, which resembles a large dog on wheels. But their true power lies in their connection to the world simulator, rather than traditional step-by-step programming. This system maps the environment, runs thousands of simulations in seconds, learns from potential failures, and selects the optimal approach.

The result? The robot can operate in the real world and get it right on the very first try. Every time.

But here’s the challenge: Nvidia’s chips consume an insane amount of energy. Just 10 seconds of physical interaction simulation demands more computing power than the entire Apollo program used to land on the moon. Yes, you read that right.

Now, try to picture the energy requirements to scale this up for a city full of robots. Each one running these simulations in real time, constantly interpreting and predicting the physical world with perfect accuracy.

You might be thinking, “A city full of robots? Seriously?” Yes, it’s happening. It won’t be this year or next, but the robots are on their way. And with them comes an energy demand—and level of reliability—that we’ve never even imagined before.

Once again, the bottleneck isn’t innovation—it’s the energy to fuel it. That’s the only real constraint left. All the usual barriers, like regulations, will be swept aside in this unprecedented race for productivity and abundance.

Ok, but what about Deep Seek?

Last month, a little-known Chinese AI lab caused a stir by unveiling a new large language model that rivals ChatGPT—and at a fraction of the usual cost.

Deep Seek also reportedly found a way to slash energy costs by up to 90%. Naturally, this has some people wondering if AI’s notorious energy appetite might not be such a problem after all.

But they’re missing the forest for the trees. If Deep Seek’s claims about significantly lower energy use are true, it’ll do one thing—massively accelerate AI adoption and push overall power demand even higher. It’s called Jevons paradox—named after an English economist who found that making coal use more efficient just made people use more of it. As AI gets cheaper and easier to use, it’ll be everywhere, sucking up more power than ever. Plus, myriads of AI-powered robots and gadgets will still need plenty of energy, significantly adding to overall demand no matter how efficient the models get.

The Club of Rome on the Back Foot

I’ve spoken with many people who think AI is all hype and that we won’t see any serious changes. I understand that perspective. All our lives, the world has been shaped by people and technological innovations contrary to the “Infinite Pie” vision. I call this the “Club of Rome” mindset, inspired by the real Club of Rome—a group (in)famous for its 1972 report, The Limits to Growth.

At its core, this mindset is rooted in scarcity. It’s the belief that resources are finite, and humanity’s survival depends on strict regulation and control. Advocates push for curbing consumption, restricting innovation, and redistributing resources. This way of thinking underpins environmental policies like the Paris Climate Accords, heavy regulatory frameworks, and centralized economic models designed to preserve stability by stifling growth.

It’s a mindset built on the idea of a constantly shrinking pie—one that must be guarded, rationed, and controlled at every turn. For decades, it was the dominant narrative. Everyone bought into it… until recently.

Argentina was the first domino to fall. With the election of Javier Milei, a libertarian firebrand, the country turned its back on that philosophy. Milei delivered on his promise to dismantle government bloat: abolishing half of Argentina’s federal ministries, laying off 50,000 state workers, devaluing the currency by 50%, halting public works projects, slashing subsidies, introducing sweeping deregulations, among other things.

And now, it seems, the United States is following suit.

Last month, Donald J. Trump was sworn in as the 47th President of the United States. On his first day in office, he unleashed a slew of executive orders, among others, to:

• Pull the U.S. out of the Paris Climate Agreement.

• Declare a national energy emergency to ease rules and speed up permits for projects like mining.

• Reverse Biden’s offshore drilling ban on 625 million acres of federal waters.

• Start rolling back Biden’s car emissions rules that pushed automakers toward electric vehicles.

• Ease energy efficiency rules for dishwashers, showerheads, and gas stoves.

• Open more areas in Alaska for oil and gas drilling.

• Restart approvals for liquefied natural gas export terminals paused under Biden. Stop leasing federal waters for offshore wind farms.

• Get rid of "environmental justice" programs that focus on protecting poorer communities from pollution.

• Review federal regulations to remove obstacles to using coal, oil, gas, nuclear, and other energy sources.

Love Trump or hate him, this is a decisive break from Biden’s policies, which prioritized climate goals over economic growth.

Trump also rescinded earlier executive orders on AI safety and ethical risk management—moves that should significantly reduce regulatory constraints on the industry and unlock its full potential.

And he didn’t stop there.

On his second day in office, Trump announced Stargate, a $500 billion private-sector AI initiative led by OpenAI, Oracle, SoftBank, and MGX. The project aims to establish massive AI data centers and energy systems across the U.S., creating over 100,000 jobs and aiming to strengthen America’s position in the global AI race.

All of this is putting AI and energy front and center in Trump’s vision for America’s future. And it totally makes sense, given how closely the two are connected, as I discussed earlier.

It’s the “Infinite Pie” vision playing out right in front of your eyes. Plain and simple.

Late conservative journalist Andrew Breitbart once said that politics is downstream from culture. While I’m not sure I fully agree, what we’re seeing now is a dramatic shift in the zeitgeist. The narrative has changed from “Shrink, conserve, reduce energy consumption, and downsize our carbon footprint” to “We need growth.”

And it’s clearly not because of the politicians. Maybe it’s not downstream from culture per se, but it’s definitely downstream from the people who matter. The moneyed interests and the sharpest minds have realized one simple truth: we need power—lots of it. Without it, the “Infinite Pie” vision is dead in the water, and we’ll get left behind in the AI race toward abundance. These people know that without abundant energy, the U.S. simply can’t compete. Labor costs, regulations, and outdated infrastructure make it impossible.

This is what’s driving the kinds of changes nobody would have even considered accepting just four years ago.

Take the 2.2 GW Diablo Canyon Power Plant in California—the state’s last operating nuclear facility, right by the ocean. Thanks to the Greenies and their usual excuses, it was all set to shut down. But when push came to shove, business interests stepped in and said, “No, we need it.” And just like that, Governor Gavin Newsom reversed course and decided to keep it open.

Get ready to see a lot more of this happening. And not just in the U.S.—it’s going to turn into a global phenomenon. Like I said, the stakes are way too high for any major player to sit this one out.

When the time comes, every regulation and even the most sacred social contract in any major economy will be pushed aside to make this happen. Mark my words.

I think we’ll see one government after another overturned, all with a mandate to cut back the state. Leaders will be installed and toppled. And the people will cheer for it. This might be hard to imagine right now, but I’ll bet you it will happen. It might look like populism or something else, but the driving force behind it all is the promise of the AI revolution.

And that spells hope and opportunity for America.

Final Thoughts

It’s entirely rational to fear that AI and robotics could usher in a dystopian future—after all, they might. History is littered with technologies weaponized by bad actors, and today’s landscape is no different. When billionaires like Larry Ellison or Silicon Valley luminaries like Sam Altman evangelize about AI’s potential to “cure cancer” or “save humanity,” skepticism is warranted. Their utopian rhetoric often glosses over risks: job displacement, centralized corporate or state power, and tools that could entrench surveillance and the oppression of individual freedom. Their vision of progress is not concerned with us—the little people.

But dismissing AI and robotics outright would be a tragic mistake. For all their flaws, these technologies follow a pattern as old as the wheel or the steam engine: they amplify human capability. The Industrial Revolution lifted us all from agrarian poverty by making goods abundant and affordable. The internet democratized access to knowledge, created new opportunities, and brought everyone that reads this letter together. AI and AI-driven robotics will follow a similar arc. These tools could unlock unprecedented abundance and opportunity by slashing the cost of producing everything—from food to housing to healthcare to manufactured goods.

The AI Revolution won’t just be the money-making opportunity of 2025—it’ll define the next two decades. We’ll keep this thesis front and center as we navigate the opportunities ahead in Crisis Investing.

Best,

Matt Smith