On Monday, popular investor and "Shark Tank" star Kevin O'Leary said that the real threat to the AI boom isn't hype or inflated valuations — it's the scarcity of electricity.
O'Leary Rejects AI Bubble Fears
In a video shared on X, O'Leary was asked whether the rapid rise of AI resembled a bubble. He dismissed the idea, arguing that AI is already embedded across the entire U.S. economy.
"No, I don't think we're in a bubble," he said, explaining that AI has proven its value in all 11 sectors of the economy, from real estate to financial services.
According to him, the last two years have shifted AI from speculation to a practical tool that boosts margins and productivity.
But that widespread adoption, he warned, has created a new bottleneck: power.
"Now, we got a really big problem and it's called the grid. There's no power left," O'Leary said, pointing to soaring demand from data centers and AI compute.
Why O'Leary Is Betting On Bitzero
O'Leary used the moment to spotlight his investment in Bitzero, a company he describes as a blend of real estate operator, energy supplier and permitting specialist.
He praised CEO Mohammed Bakhashwain's push to secure long-term electricity contracts at prices below six cents per kilowatt-hour in countries like Finland and Norway.
With those contracts in place, he said, Bitzero can supply cheap power for anything from Bitcoin (CRYPTO: BTC) mining — which the company uses for cash flow — to AI data centers.
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Power Is The New ‘Picks And Shovels'
O'Leary framed the investment as an infrastructure bet on the AI revolution. While he still owns chip stocks like Nvidia Corp (NASDAQ:NVDA), the investor argued that energy is the real foundational asset.
"I also want to own the infrastructure of AI and that is power… if you don’t have power, you got nothing. Bitzero has Power," he stated.
Beijing Uses Energy Subsidies To Offset Rising AI Hardware Costs
Earlier this month, it was reported that China has increased subsidies for large data centers, cutting their power bills by as much as 50% to aid domestic chipmakers and boost the country's global tech competitiveness.
Local governments in data-center-heavy regions such as Gansu, Guizhou and Inner Mongolia have rolled out these incentives, which primarily benefit giants like ByteDance, Alibaba Group Holding Ltd. (NYSE:BABA) and Tencent Holdings Ltd. (OTC:TCEHY).
These companies have been grappling with rising electricity costs following Beijing's ban on purchasing Nvidia.
The subsidies were reported enacted after tech firms complained about the higher operating expenses tied to using less efficient homegrown processors from Huawei Technologies and Cambricon.
Even with the added energy demands of domestic chip production, China's centralized power grid still delivers electricity that is cheaper, cleaner and more stable than what is available in the U.S.
As a result, power-rich remote regions have quickly become major hubs for large-scale data center development.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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