Energy is the New Alpha: The Race for AI Dominance

The AI revolution is fueling an insatiable need for energy. Beyond the cloud, digital intelligence is causing a physical-world infrastructure problem. The solution? New, scalable energy sources that can bypass the today's energy production limitations.

The data is clear: the United States is racing against an "energy wall." A recent Morgan Stanley analysis warns of a staggering 44-gigawatt power shortfall by 2028, the equivalent of 44 nuclear reactors, driven almost entirely by the growing appetite of AI data centers. Closing this gap is estimated to require  $2.6 trillion in power-related investment by the end of the decade.

At EquityZen, we’ve been tracking how this demand is fundamentally reshaping the private market. As technology advances at a rapid rate, the Cleantech of today isn't just about solar and wind. It’s about baseload, carbon-free, utility-scale power that can enable the next wave of AI innovation. However, investors must navigate the stark reality that while AI innovation scales in months, building the physical infrastructure to power it is still a decade-long regulatory and capital-intensive endeavor.

Breaking News: Fusion Hits the Public Markets 

Today, the intersection of energy and AI reached a fever pitch. Trump Media & Technology Group (TMTG) announced a $6 billion merger with TAE Technologies, marking the creation of one of the world’s first publicly traded fusion energy companies.

The deal aims to combine TMTG’s access to capital with TAE’s two decades of fusion leadership to commence construction of what they describe as the world’s first utility-scale fusion power plant in 2026. This news signals how fusion is moving from a "science project" to an essential component of national infrastructure and US strategy for AI dominance.

The Private Leaders Solving the Bottleneck

While the markets react to the TMTG/TAE news, the private market remains the primary venue for high-conviction exposure to the innovating energizers of the AI boom. At an institutional level, we’ve seen capital concentration as investors are no longer "spraying and praying" in the green sector. Instead, they are placing fewer, larger bets on companies that they believe can help solve the grid bottleneck.

1. Fusion's "Sputnik Moment" 

This sector represents the "holy grail" of energy: limitless, carbon-free power. Fusion innovation has been accelerated by AI models that are solving the complex plasma physics that have eluded scientists for decades. 

• Helion Energy: Backed by Sam Altman and a world-first Power Purchase Agreement (PPA) with Microsoft, Helion began active construction on its "Orion" plant in Washington this year. They are targeting commercial power by 2028.
• Commonwealth Fusion Systems (CFS): In September, the Department of Energy validated CFS’s high-temperature superconducting magnets, a critical milestone that de-risks their path to net energy.

Despite recent breakthroughs, the commercial applications of fusion are still largely unproven. Investors could face long liquidity horizons as the first grid-connected plants aren't expected until the 2030s.

2. Advanced Fission + SMRs

Small Modular Reactors (SMRs) offer a "plug-and-play” solution for data centers, allowing tech giants to bypass the 5-to-10-year queues for traditional grid interconnections.

• X-energy: Amazon recently stepped up as a massive anchor for Small Modular Reactors (SMRs). Through a $50 billion push, Amazon is financing the deployment of X-energy’s Xe-100 reactors to provide the 24/7 "baseload" power that wind and solar cannot guarantee.
• Radiant Nuclear: In a major move for "portable" power, Radiant just raised $300 million to mass-produce its 1 MW microreactors. These "semi-sized" reactors are designed to replace diesel generators and are already under contract with data center giant Equinix to provide dedicated, off-grid power.
• TerraPower: Founded by Bill Gates and backed by investors like NVentures and HD Hyundai, TerraPower is developing a sodium-cooled advanced 345 MW small modular reactor. The company has played a key role in the Natrium project under the US Department of Energy’s Advanced Reactor Demonstration Program (ARDP), which aims to complete the first utility-scale advanced nuclear power plant in the United States.  

While promising advancements have been made, next-gen nuclear companies face regulatory hurdles, as the Nuclear Regulatory Commission (NRC) certification process can take years. This could potentially delay the rapid deployment timelines these startups promise.

3. Integrated Infrastructure

The market is shifting from digital assets to physical utilities, with hardware leaders now directly funding the supply chain to ensure that AI chips never go dark.

• Crusoe Energy: Crusoe is bypassing the grid entirely. By co-locating AI data centers at the power source, they’ve created an "energy-first" infrastructure. Their $1.375 billion Series E raise in October at a $10B+ valuation validates the premium the market is placing on integrated solutions.
• Redwood Materials: The hardware running AI needs batteries. NVIDIA’s venture arm, NVentures, recently joined Redwood’s $350 million Series E, specifically to scale grid-scale storage. Through this move,the chipmaker is now funding the infrastructure to keep its own chips humming.

Large-scale co-location solves the direct energy needs of specific data centers, but can strain local water resources. This has led some regulators to push back on projects that may divert power from the public grid, which could slow the progress of these initiatives.

The Race for Energy

As we look ahead to 2026, the takeaway is clear: the most durable and dynamic "AI plays" may be found in the physical world. The bottlenecks are no longer just about chip access. They are about grid interconnection, power generation, and critical infrastructure.

To explore current opportunities in Energy and AI infrastructure, visit the EquityZen Marketplace.