AI, Energy, and the Coming Scarcity Shock

Summary

Global geopolitical shocks, like the closure of the Strait of Hormuz, are fundamentally reshaping energy markets and driving a long-term trend towards energy resiliency. This isn't just about oil; the impact will be felt for at least five to twenty-five years, leading to increased investment in renewables and nuclear power, as nations prioritize self-sufficiency over global supply chains. Simultaneously, artificial intelligence is poised to dramatically boost productivity, but with a significant risk of widespread job displacement, raising questions about who will consume the products of AI-enabled companies. Experts caution against focusing solely on short-term price volatility, urging investors to consider these enduring themes of scarcity and resilience. For personal finance, the focus should be on diversification and avoiding overvalued assets, rather than chasing rapid returns.