Another expensive investment-newsletter pitch. This one comes from Ian King, editor of Banyan Hill's Strategic Fortunes. His pitch is built around a simple problem: AI is expanding faster than America's electrical grid can supply it.
His hook, “Elon Musk Just Bet $86 Million on a Tiny Company Most Investors Have Never Heard Of.”
The mystery company appears to be Solaris Energy Infrastructure (SEI). Solaris originally built mobile power systems for remote oil and gas operations. Now it's applying that same concept to one of AI's biggest bottlenecks, getting enormous amounts of electricity to data centers without waiting years for new grid connections.
Solaris formed a joint venture that is supplying natural-gas-powered generation to xAI's massive Colossus data center in Memphis. The original agreement was around 500 MW and has since expanded toward 900 MW, with the equipment essentially being leased under long-term contracts. And Musk isn't the only customer.
Solaris says it has secured more than 3 GW of generation capacity through the end of the decade, with contracts stretching 10-15 years in some cases. King's argument is that investors haven't yet seen the full impact because much of this capacity is still being installed. The joint venture isn't expected to reach full power until 2027, while Solaris continues spending heavily to build out the fleet.
There's also a second stock hidden in the pitch, Redwire (RDW). Redwire builds space infrastructure, including roll-out solar arrays. King thinks its technology could eventually help power the enormous orbital AI data centers being contemplated by SpaceX and others...that's much more speculative. SpaceX could build much of that technology internally, and Redwire isn't profitable yet. But a major orbital-data-center contract could obviously change the story quickly.
Of the two, SEI looks much more interesting to me. It's not really a bet on Musk. It's a bet that AI companies can't wait years for utilities to build new power infrastructure and will pay handsomely for companies that can bring power directly to them in months or even weeks.
SEI — the AI power bottleneck play
RDW — the speculative orbital AI play
I think the first one makes my watchlist, but curious if anyone is tracking or have others views on these.
This is misleading framing. "Bet" implies Elon invested in it, he didn't, he's a customer... and everything he's doing is to make them obsolete.
I'd bin this newsletter given this and the last Kiyosaki thing.
The business itself sounds interesting, there's obviously demand now... looking at it though it's very rich for a business everyone is trying to make obsolete. It's also capacity constrained upstream, CAT and GEV are already booked out on turbines/engines. To the extent their business is viable i'd rather be in those.
Super misleading, but that's the framing to entice people into paying and you're right, Musk didn't invest in SEI, xAI is a customer. That's why I like pulling these pitches apart rather than paying hundreds or thousands for them.
I also like the CAT/GEV angle. If SEI's opportunity ultimately depends on scarce generation equipment everyone needs anyway, owning the upstream bottleneck may be the better play.