Opinion: The race to energize tomorrow’s infrastructure

Artificial intelligence demand is accelerating so fast that the physical limits of energy grids, supply chains and resource availability are becoming bottlenecks. Mass computing power requires physical infrastructure, reliable power and access to critical materials.

The next great shift in technology won’t descend from the cloud but rise from the ground. Everything from the power grid to the applications built on top depends on physical materials and resources. The leaders of the next era will be those who can deliver reliable power at scale and turn computing power into strategic advantage.

The resource race
Rare earth elements like neodymium and dysprosium underpin the high-performance magnets and precision components essential to semiconductors, batteries and modern electronics. China dominates much of this supply chain by controlling as much as 90% of global rare earths processing capacity, according to research firm FP Analytics.

In recent years, China has tightened export controls on heavy rare earths and processing technologies critical to AI and defense industries. This gives Beijing leverage not just in manufacturing, but in technology deployment and national security for any nation reliant on these materials.

The United States has significant rare earth mineral deposits and is the second largest producer behind China. However, it lacks processing infrastructure. Most processing is sent overseas due to its intensive energy requirements, environmental impact and complex domestic regulatory hurdles.

The U.S. has historically relied on a single major rare earth mine at Mountain Pass in California, with additional rare earth recovery occurring as a byproduct of mineral sand mining in Georgia. Wyoming’s Brook Mine, established July 11, 2025, is the first new rare earth mine to open in over 70 years. Exploration and development are expanding across several states and has garnered federal support.

On Jan. 26, the Commerce Department announced a $1.6 billion deal with USA Rare Earth, including 16.1 million common shares and 17.6 million warrants. The package consists of a $1.3 billion loan and $277 million in federal funding. Given recent federal investments and support for chip-related technology companies, similar support for the critical minerals needed to sustain that supply chain is likely to continue.

The power demands
The U.S. Department of Energy and Lawrence Berkeley National Laboratory’s 2024 Report on U.S. Data Center Energy Use showed that data centers accounted for 4.4% of all energy consumption in 2023. The research suggests a doubling or tripling of data center consumption by 2028. Such a massive uptick in usage will undoubtedly put upward price pressure on energy procurement.

The Trump administration is pushing to shift the cost of new power generation away from consumers and onto large technology companies whose data centers are driving rapid growth in electricity demand and inflating costs for households. Leading tech firms have committed roughly $15 billion to fund new power plants on the PJM Interconnection, the largest wholesale power grid supplying electricity to 65 million people.

Not all data centers are waiting to plug into the grid. The massive $165 billion hyperscale campus known as Project Jupiter is designed to self‑supply its power. The facility under construction in Santa Teresa, New Mexico, will house four data centers, business offices and natural‑gas‑powered microgrids supported by large‑scale battery storage, according to reporting by Forbes. Project Jupiter is one of five gigantic AI data center campuses planned across the United States under the broader Stargate initiative.

As demand surges, policymakers and hyperscalers are converging on the same conclusion: the current power grid cannot keep up.

The outlook
The United States is unlikely to remain dependent on foreign processing for materials critical to AI, energy infrastructure and national defense. While expanding domestic rare earth refining is capital intensive and complex, strategic vulnerability is no longer an acceptable tradeoff. Federal incentives, defense priorities and private investment are increasingly aligned to build domestic and allied processing capacity.

Power generation, grid reliability and access to critical materials are moving from the background to the center of both economic competitiveness and national security. The leaders will be those who can power the systems of the future and shape the technology built on top.

Andy Drennen is a certified financial planner and senior portfolio manager at Simmons Private Wealth in Springfield. He can be reached at andy.drennen@simmonsbank.com.