Energy transition remains among the most important and exciting topics in the world. But it is now less driven by Net Zero ambitions, and more so by digital and AI technologies. An AI-driven energy transition unlocks world-changing possibilities; re-accelerating GDP, returns on capital, and commodities. This 13-page report captures our latest outlook on energy transition, and the opportunities therein.
Energy transition is unfolding very differently than some commentators imagined 2 years ago. We now see an AI-driven energy transition unfolding, which is very different from one that is driven by decarbonization ambitions.
The note starts by looking back at energy transitions in the 19th and 20th centuries, and correcting an oversight: demand side technologies pull on the best-suited and readily available supply sources, not the other way around.
Digital demand side technologies have been a key feature in our 1H25 work. We re-cap our favorite case studies and conclusions — in industrial robots, machine vision, drones, autonomous mining trucks, additive manufacturing. and AI use in industry — on pages 3-4.
Digital and AI-related technologies tend to snowball over time, expanding in scope. This is exemplified by smart meters, on page 5.
Digital and AI-related technologies not only lean on energy, materials and industrials value chains, but also tend to re-shape them. This could be exemplified by smarter future grids with 2x higher utilization, on page 6.
In economic terms, an AI-driven energy transition could add a full 1pp pa to US GDP growth, of which 85% accrues to owners of capital, based on our factor analysis of GDP, while also unlocking amazing possibilities for human civilization.
Hence enabling the rise of digital and AI technologies has become a new raison d’être across energy (our favorite opportunities on pages 8-10), mining (page 11), materials (page 12) and industrials companies (page 12).
Momentum behind decarbonization has slowed in the past year. “Green premia” are out of fashion, but “green bonuses” are still exciting. An AI-driven energy transition may not prevent climate change, but may cure some of its ills.