The Firebreak’s Daily Davos Dump: Day 5 (Conclusion)
Energy Segregationists: How Tech and Finance Investors are Weaponizing Electricity
The global actors in the financial and tech industries pulling the levers at the World Economic Forum’s Davos 2025 have deftly pivoted from their longstanding capitalization on our fear of climate change to a sudden dash for energy infrastructure control. The last decade’s obsession with renewables, degrowth, carbon disclosure and conscious capitalism has morphed into funding for AI, data center energy infrastructure and digital democracy. Virtue capitalism is dead; long live segregation of a scarce commodity: energy.
I often write articles as part of a learning process and these five days covering the World Economic Forum’s Davos 2025 event has been an eyeopener. This last article will bring together some of my realizations of how consumers and economies are once again at risk from the opportunists operating behind the curtains at Davos. I was expecting that a week of Davos monitoring would confirm what I had always heard it was: a gathering of elite, smarmy billionaires imposing virtue-driven policies on the rest of us struggling to survive. And there was plenty of that. What I did not expect was the internecine warfare that has been going on between different industry sectors. Davos is a battlefield where the animosity frequently bubbles up and where access to energy is the new weapon.
An Industrial Divide
Most of us had always considered industry – the drivers of capitalism and innovation – as a single stakeholder group. Industry had shared values: capitalist, profit-oriented, investment-driven and continuously innovating for market-share and societal advancement. As the tech sector grew, we started distinguishing between rustbelt companies and old/brown/polluting industries on one side, and tech and tech industries as new, innovative and green on the other. As tech represented the future of industry, jockeying was common. Electric vehicles, for example, aspire to be seen as more tech than transport related.
The banking and investment industries followed the money, joining with big tech firms, forcing “polluting industries” into their repressive climate and carbon box (see how investment institutions got in bed with the Carbon Disclosure Project NGO). The implementation of ESG ETF funds, where the old industries had to meet what Blackrock’s Larry Fink or Goldman Sachs’ David Solomon randomly considered to be green and ethical, showed how little respect the financial industry had for their supposed brethren.
At Davos 2025, I couldn’t help but notice how far the finance and tech industries have divorced themselves from the rest of the corporate world. They are acting like the consulting industry, who look at industry clients as opportunities to profit from and bully. There is no longer one single industry stakeholder but two divided poles and energy supply is fast becoming the weapon between them.
A Tale of Two Industries
There is a tale of two industries here. While Davos Man is now making a dash for the great energy infrastructure expansion demanded by the presumed growth of AI data centers, the Rest of Industry (ROI) wrote a letter to President Trump with a shopping list of policies they would like him to overturn. Davos is trying to control (and own) the future while ROI wants to undo the past.
Just think of the optics here. Finance and tech industries meeting in Davos scrapped their climate and carbon ambitions and are now pouring billions into energy infrastructure. Meanwhile, the rest of industry, not present at Davos, is not thinking of the coming energy access squeeze but simply wants to undo previous policies that restrict pollution, emissions, trade, food and feed measures, and innovation. They also want Trump to overturn many of the regulations that the Davos industries had imposed on them (carbon emission declarations, ESG rules, energy efficiency rules…).
In the last year it became clear that the speed of the growth of AI innovations would require a massive amount of energy that could not be supplied soon enough with nuclear or hydro and not sufficiently enough with renewables. The very same people demanding the rest of the industries to abandon fossil fuels in order to be allowed into their ESG club were now pushing investment funds providing natural gas power generation for data centers. This implies that ESG was either just a mistake or a tactic to use against the rest of industry.
When Trump spoke at Davos, four industry representatives were allowed on the panel to question him: three from the banking/investment management world and one energy provider. Were executives from the old industries even invited to Davos or is the World Economic Forum only a club for those billionaires who smell nice?
It did not take much to realize that in the pages of industry groups, companies and chambers of commerce signing the letter to President Trump, there was not a single signatory from the financial or tech industries. No typical Davos company would support these measures. It is time to change the nomenclature and stop referring to these two very distinct groups both as industry. They have nothing in common except a shared animosity.
Own the Energy, Reap the Power
When investors, fund managers and bankers are creating funds to finance and build bespoke energy plants for their tech clients, are they interested in strengthening the grid and providing that energy for other industries or for consumers? At a Davos side panel, discussed in our Day 3 Davos Dump (see the panel from the 53:30 mark), Larry Fink and Peng Xiao made it clear that the funds and their investors would control the power and the profits. Fink stated: “This is the first time the capital markets will play a strategic role”. His strategy is to give advantage to the tech clients (with trillions of dollars to invest) while the old industries will no doubt struggle with energy supply and price.
How would this “intersection of power, capital and technology” affect the poor people? And how many countries, like those in Europe, will not be able to afford the energy needed for these “AI factories”? Fink imagines data centers operating in energy-abundant countries with the “sovereignty of an embassy”. In other words, energy will once again become a strategic power play in the geopolitical arena in a battle between the haves and have nots.
In one of Trump’s tangents during the Davos Q&A, he shared a story about some conversations he claims he had with tech directors where he advised that they should have the power source inside the data center because they could not rely on the grid.
With the AI plants, I’ve been talking to many people who want to build them, that’s going to be a very big thing. We are going to build electricity generating facilities, they are going to build them … And the big problem is we need double the energy we currently have in the United States, can you imagine, for AI to really be as big as we want to have it. It will be very competitive with China and others. So I’m going to give emergency declarations so they can start building them almost immediately. … I told them that what I want you to do is to build the electricity generating plant right next to the plant as a separate building connected and they said: “Wow, you’re kidding!” and I said: “No, no I’m not kidding. You don’t have to hook into the grid, which is old and, you know, could be taken out.” And if it’s taken out, they wouldn’t have any way of getting any electricity. … We’re going to make it so that the plants will have their own electric generating facilities attached right to their plants. They don’t have to worry about a utility; they don’t have to worry about anything.
President Trump was clearly adlibbing and embellishing himself into conversations, likely at Mar-a-Lago, where tech and investment fund lobbyists were pushing him to fast-track approvals for internal data center power plants. As a source of power, profit and influence, these energy traders don’t want the energy on the grid and I doubt Trump will care if the electricity is shared equally with the poor (ie, Democratic voters) so investing in a better grid is not his priority.
Energy infrastructure for the rich, candles for the poor! Davos Man in action.
Energy Segregation
Access to electricity will fast become a tool that will be used for economic advantage. It will no longer be a right. This is energy segregation as a new form of class division and the people discussing this in Davos are fully aware of the ramifications. These investment fund managers, and their energy trading desks, will make more money off of the wealthy industries and not the old industries or the poor, working class people who rely on the grid … which the president admitted “could be taken out”.
For the last decade, Davos used the manufactured fear of climate change to impose strict measures that they have profited from (ESG, carbon trading, emissions disclosure tools, energy efficiency measures…), putting pressure and debt on the old, energy-intensive industries. Now the tech industry is expanding into a lucrative investment field, AI, where there is a new opportunity for building energy-intensive infrastructure. So the investment institutions have discarded their former green demands and are piling in to the new opportunity while using fossil fuels, making it look like they are acting virtuously to solve a problem. What hypocrites.
The next Davos Dystopia, according to the World Economic Forum visionaries, is one where the wealthy are energy barons profiting from data centers, the middle class struggle to pay for their solar panels or energy collectives and, with a crumbling public grid, the poor are left in the dark.
A collection of investment fund energy ETFs are already up by at least a third over the last six months. They’ve already booked most of their profit.
Energy Traders Don’t Generate, Store or Use Power
The energy infrastructure investment dash resembles the tech bubble in the early 2000s when share prices in communications infrastructure companies (the builders of the Information Super Highway) were doubling and then tripling in share value. When the AI bubble pops, and it will, the fund managers and energy traders will have already taken most of their winnings off of the table, leaving the retail investors, once again, holding the bag, the consumers paying more for energy and a many power sources in the wrong places on a crumbling grid.
Like the dot.com bubble, many of the energy infrastructure pitches are selling pure snake oil into the hyped up trading frenzy. Take the company NuScale, for example. This small company’s share price has gone up tenfold in the last year by promising small-scale nuclear power plants but they received approvals and have not generated a single watt (and probably never will). Speculators don’t worry about who loses out or if markets crash.
A large amount of the capital needed to meet the energy needs of the thousands of data centers will not actually be invested into power generation. It will be siphoned off by the energy traders, pushing prices up and supplies down. Like the agricultural commodity price shocks from 2007-2008, where speculators were profiting while people were starving, the middle class and the poor will pay dearly. The Davos investment managers, bankers and financiers are backing the energy infrastructure revolution and arranging financing for the richest tech companies because they see similar opportunities. So what if energy poverty explodes and the grids get “taken out”.
Meanwhile … in China.