Union Square Ventures co-founder Fred Wilson has argued that energy—specifically natural gas—offers a far simpler investment path into artificial intelligence than tech equities, even as natural gas prices remain muted despite rising data center power requirements.
Venture Capitalist and Tech Executives Highlight Energy Play
Addressing investors on X, Wilson stated, "If you really want just a simple way to bet on AI and not have to think about all this other stuff, just bet on energy." His comments come during a turbulent period for technology equities, where major chip stocks posted eight consecutive losing sessions as investors weighed high valuations alongside broader market risks like an AI chip glut.
Other industry figures have echoed similar themes regarding raw commodities. Former X head of product Nikita Bier noted on October 21, 2026, that natural gas powers the vast majority of AI infrastructure while its market price has remained flat or down. Other market participants highlighted copper and utility power as alternative avenues for cheap AI exposure. While copper hit record highs earlier in 2026, recent weakness in Chinese industrial data has pressured prices, forcing traders to re-examine fundamental support levels after mine supply contracted.
Data Center Power Demand and Market Math
Industry data underscores the extent of energy requirements for digital infrastructure. The United States currently has 1,391 operating data centers and 2,819 additional facilities planned. Crucially, natural gas is projected to supply nearly 75% of planned on-site data center power in the U.S., with nuclear, fuel cells, and battery systems supplying the remaining 25%.
Despite this impending demand spike, spot commodity prices remain anchored within historical bands:
- Henry Hub Benchmark: Has traded primarily between $2 and $4 per MMBtu over the past decade, though research firm Wood Mackenzie forecasts prices reaching near $5 per MMBtu by 2035.
- ETF Dynamics: Products like the United States 12 Month Natural Gas Fund (UNL) hold futures contracts, meaning monthly contract rolling costs have caused fund performance to lag spot gas prices.
- Alternative Power: Nuclear, fuel cells, and battery storage make up the remaining 25% of planned on-site capacity.
Why It Matters
As artificial intelligence workloads scale exponentially, power generation capacity and grid connectivity are fast becoming the primary bottlenecks for tech expansion. If natural gas prices rise toward projected $5 per MMBtu levels, energy producers may capture a substantially larger share of total AI capital expenditures at the expense of hardware manufacturers. Furthermore, this intense competition for gigawatt-scale power generation will directly impact Bitcoin mining cost structures, forcing crypto miners to compete with deep-pocketed data center operators for cheap electricity contracts.
