Joe Weisenthal and Tracy Alloway host Tyler Rosenlicht, Portfolio Manager of Global Listed Infrastructure and Natural Resource Equities at Cohen & Steers. The conversation explores how AI's massive energy demands are reshaping infrastructure investing, from data centers requiring unprecedented electricity capacity to the political risks of rising utility bills.

The discussion covers global energy demand projections through 2040, the emerging nuclear renaissance, and why traditional infrastructure assets are becoming high-tech plays. Rosenlicht explains how his team conducts field research across utilities, pipelines, and data centers to identify investment opportunities in an increasingly complex landscape where energy constraints have become the primary bottleneck for AI development.

AI Infrastructure Creates Cooling Equipment Volatility

Jensen Huang's comments at CES about more efficient chips potentially reducing cooling infrastructure needs sent cooling companies like Train Technologies plummeting, highlighting the tech-infrastructure connection.

Infrastructure investors historically preferred stable returns from assets like toll roads and airports, but AI linkage introduces unprecedented technological disruption risk to traditionally stable sectors.

The Physical World Drives Investment Returns

"To make money, it feels like you really have to get your hands dirty" - Joe, noting how physical infrastructure has dominated investment themes since COVID.

Government spending globally is opening funding taps for infrastructure, while events like Venezuela's situation raise questions about rebuilding oil infrastructure profitably.

Cohen & Steers manages long-only strategies focused on real assets including REITs, commodities, infrastructure, and natural resources across four key subsectors: communications, utilities, transportation, and energy.

Data Centers Create Utility Bill Paradox

Data centers can lower residential bills when utilities have excess generation capacity that ratepayers were already funding through rate base investments.

"There are some utilities whose bills went up 15% last year" - Tyler, explaining why data centers face local backlash despite potential economic benefits.

Wisconsin example shows hyperscalers guaranteeing utility returns on rate base capex, ensuring zero impact on local ratepayers while providing guaranteed utility profits.

Regulatory risk varies significantly based on whether utility commissioners are elected or appointed, affecting their sensitivity to local voter concerns about rising bills.

Global Energy Demand Requires Massive Build-Out

Global energy demand will rise from 178,000 terawatt hours in 2024 to 220,000 by 2040, driven by population growth, economic expansion, and energy-intensive AI development.

Renewables must add 55,000-60,000 terawatt hours of supply by 2040 while reducing coal consumption - "basically recreating the entire global crude oil industry that's been around for 100 years in the next 16."

Energy priorities have shifted from "clean, stable, more" to "more, stable, clean" as demand growth outpaces clean transition capabilities.

Nuclear Renaissance Unfolds in Three Phases

Phase one involves stopping nuclear plant shutdowns globally - "we're in like the seventh inning of that ball game" after two decades of capacity reductions.

Phase two focuses on restarting recently closed facilities like Three Mile Island, currently "in the fifth inning" of implementation.

Phase three involves brownfield nuclear construction inside existing facility fences by 2032-2035, followed by SMRs and thorium reactors by 2035-2040.

"No utility will do it themselves" - Tyler predicts government cost overrun guarantees will be essential for new nuclear construction, similar to emerging critical minerals interventions.

Market Signals Fail for Critical Resources

Despite copper and gold at all-time highs, major mining companies cut 2026 capex expectations because investors demand capital discipline after shale industry value destruction.

"These are markets that have been forgotten by investors, and companies are still being penalized for increasing capex and increasing supply" - Tyler on uranium and copper markets.

Government intervention through direct equity stakes and backstop guarantees is becoming necessary to stimulate supply responses in critical minerals and energy infrastructure.

Infrastructure Investment Opportunities Emerge

Best-performing utilities trade only 6% more expensive than average despite 2% higher growth rates, compared to 11% premiums for 1% better growth historically.

"Picks and shovels" companies serving data center and reindustrialization build-out offer more predictable returns than direct AI plays, similar to Levi's during the gold rush.

Engineering and construction companies, aluminum smelters, and other consolidated industrial sectors benefit from structural demand while trading at reasonable multiples.