The Utilities Analyst Who Says the Data Center Demand Story Doesn't Add Up
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Why are utilities analysts suddenly in high demand because of the AI‑driven data‑center boom?
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News.
Hello and welcome to another episode of the All Thoughts Podcast. I'm Tracy Alloway.
And I'm Joe Weisenthal.
Joe, imagine you are a utilities analyst.
Yeah, fun.
And for years you are laboring in the utility analysis mind.
Yes.
And you know, we like talking about utilities. We like talking about energy. We find pretty much anything interesting. That's right. Equal opportunity uh interest people we are. But
Yes.
You gotta say utilities for a while, some people would say it was a little boring.
No, that's right. I mean, for most of our careers, I think if you were a utilities analyst, a really big part of your job, and maybe I'm wrong, but I just didn't the popular discourse was like talking about yield relative to treasuries, right? They were seen as sort of bond like instruments, et cetera. Maybe a little bit of growth, but roughly.
Reliable, safe haven-ish dividend plays, I guess.
Totally. And since I know where we're going with this conversation, one of the themes of the last few years has been what I would say is the old industries that were either stable or cyclical, becoming secular in the way they grow.
Mm-hmm. I think that's right. So what is happening now is if you were, I don't want to say a lowly utilities analyst, but you know, maybe a sort of forgotten utilities analyst outside of your sector, suddenly you are very in demand, right? Because all you hear about nowadays is the AI build out and energy constraints on that. And so obviously a lot of people want to look at it from a utilities perspective.
Totally. I always think like what a great luck that some people have in their careers. You know, you can be an analyst and learn modeling skills and all kinds of stuff, and then you get allocated and someone gets allocated to uh I don't know, farm equipment and another person gets allocated to they wind up in utilities in twenty twenty two and it's like, man, they're on TV all the time. My old boss at Business Insider, Henry Blodge is That it's like he was there as an internet analyst in like the late nineties. What amazing timing and luck. And so it's like journalism. But it's like
journalism in the Erasmus. I started out covering airlines of all things. But those were interesting. Anyway. I'm glad to say we do, in fact, have the perfect guest. So we're going to be speaking to a utilities analyst, someone who happens to have a very contrarian take on the data center build out and how much energy is actually required. We've been hearing a lot from people who are very, very bullish on the data center build out. So this will be a useful cover point. I love it. Okay. So without further ado, uh Andy DeVries, head of investment grade credit. Credit and head of utilities and power over at Credit Sides. Thank you so much for coming on All Thoughts.
Thank you. The pleasure's mine.
So is it great to be a utilities analyst right now? Even better.
Well, your your Bloomberg News reporter Josh Shaw wrote an article about the how much it's changed for be a utilities analyst now that data centers are here. But to push back, we did have the largest bankruptcy of all time in Enron. Oh yeah. The largest LBO of all time in TXU, which then went bankrupt, and the largest private equity return ever in Calpine, twenty five billion, which exceeds Apollo's Lionel trade and Blackstone's Hilton trade. So we have had a lot of fun along the way.
Have you been a utilities analyst throughout that entire timeline? How long have you been doing it?
I started with the first pack gas bankruptcy and then went to the second and here we are with data center.
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Chapters
8 chapters
1
Why are utilities analysts suddenly in high demand because of the AI‑driven data‑center boom?
0:00–6:01
2
How does Andy DeVries calculate the current and future power demand of data centers?
6:01–10:49
3
What does the supply side look like – how much capacity are utilities already committing to build?
10:49–16:31
4
Why does the guest believe we may be over‑building utility capacity by 2030?
16:31–23:22
5
How are private‑credit investors and firms like Pimco profiting from data‑center financing?
23:22–30:31
6
What are the risks to ratepayers and utilities if data‑center demand falls short?
30:31–36:17
7
How could nuclear small‑modular reactors and other policies affect future power supply for AI workloads?
36:17–41:56
8
What are the key takeaways for investors looking at the intersection of AI, data centers, and utility credit markets?
41:56–48:04
Speakers
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