AI infrastructure is far from over? PE giant Apollo: The energy demand for AI "will not be met in our lifetime"

A senior executive at private equity giant Apollo Global Management has issued a warning, believing that the enormous demand for energy driven by artificial intelligence presents a significant gap with the current global electricity supply, a gap so severe that it may never be filled in our lifetime. “The gap between the energy required for AI and the generation and transmission capacity of the global grid is enormous and cannot be bridged in our lifetime,” said Dave Stangis, who has led and developed Apollo's sustainability strategy over the past four years, in an interview. Stangis's perspective implies that investors focused on sustainable energy need to accept a new reality: relying solely on renewable energy is insufficient to power the AI era. As a result, the global investment and industrial sectors are shifting from the past mindset of "energy transition" to a more urgent "energy increment" model. For Apollo and other deep-pocketed investors, this challenge also presents investment opportunities. Stangis pointed out that due to the surge in AI data center construction, the world is “rushing to increase every source of electricity,” creating a unique window for deploying private capital in generation, transmission, storage, and related infrastructure. The New Reality of "Energy Increment" Stangis emphasized that what is happening now is "energy increment," rather than a narrow definition of energy transition. This means that to meet the explosive demand brought by AI data centers, the world not only needs to shift to low-carbon energy but also significantly increase overall energy supply. This shift is reshaping the entire financial industry's view on energy investment. In the past, sustainable investment primarily focused on the "transition" from high carbon to low carbon; now, its economic logic is combining with an unprecedented "supply growth" logic. “Therefore, there is no doubt that what is happening around the world can be termed 'energy increment,'” Stangis said. He believes that sustainable energy investors must recognize that relying solely on renewable energy will not meet demand. As a giant in alternative asset management, Apollo aims to play a key role in this transition. The company views investments in clean energy and decarbonization technologies as a profitable strategy. Since 2022, Apollo has committed or arranged approximately $60 billion in investments related to energy transition, infrastructure, and sustainability, which has already exceeded half of its $100 billion investment target by 2030. A specific example is the company's agreement in August to acquire a majority stake in Stream Data Centers, marking its first such acquisition in the competitive digital infrastructure space. To guide investments, Apollo has also designed its own classification standards. Stangis stated that this internal standard provides the company with a "competitive advantage" in the market due to its "in-depth analysis" of industries and technologies. For a project to be considered a "transition deal," a significant portion of its revenue must be related to transition activities, or financing must have designated transition purposes, or it must have industry-recognized leading certifications (such as LEED Platinum certification in the real estate sector) Political Headwinds Cannot Change Investment Trends Despite the changing political environment for renewable energy investment in the United States, Stangis stated that this has not altered the overall investment opportunities. He admitted: "There is no doubt that the external world surrounding transformational investment has changed. From a policy perspective, certain technologies are favored today compared to a few years ago, while others are not." The policies of the Trump administration complicated investments in green energy such as wind power, which favored nuclear and geothermal energy instead. However, Stangis emphasized: "We still see trillions of dollars in opportunities—this has not changed and is even growing." This viewpoint is quite representative among financial giants. Despite facing policy headwinds, BlackRock Inc. still describes the low-carbon transition as a "superpower"; while Brookfield Asset Management, Blackstone Inc., and TPG Inc. have also raised billions of dollars in funds specifically to invest in this theme. Finally, Stangis balanced his perspective. He believes that the transition to low-carbon energy has already begun and is unstoppable, but the urgent demand for energy fueled by the AI boom means the world needs more energy: “‘Energy increment’ is a fact, and I believe ‘energy transition’ is equally undeniable.” He added that energy storage, transmission, and distribution capabilities will be key drivers of success. It is reported that Stangis will soon transition to a senior advisor role at the company, with his position as Chief Sustainability Officer (CSO) taken over by Jaycee Pribulsky from Nike Inc. Pribulsky stated in an interview she participated in with Stangis that she plans to continue developing on the existing strategy of Apollo