So Google wants to put AI data centers in space. Because apparently, Earth isn’t expensive enough for their taste.
While Sundar Pichai is out here talking about launching “swarms of small satellites” like he’s planning the world’s nerdiest invasion, the real money is being made by companies with their feet firmly planted on the ground. Or more accurately, companies digging stuff out of the ground.
Here’s the thing everyone’s missing while they’re busy staring at the sky: Big Tech is hemorrhaging cash on AI infrastructure faster than a crypto bro during a bear market. Google, Amazon, Microsoft, Apple, and Meta have collectively burned through their $300 billion cash pile like it was Monopoly money. They’re now borrowing money to fund their AI dreams, which is either visionary or completely insane. Jury’s still out.
The Beautiful Irony of the AI Boom
McKinsey says we’re looking at $6.7 trillion in data center investment over the next five years. That’s trillion with a T. To put that in perspective, that’s roughly the GDP of Germany and Japan combined, except it’s all going into making computers really, really good at writing poetry and generating pictures of cats wearing business suits.
But here’s where it gets interesting: While the tech giants are playing a very expensive game of “who can spend the most money the fastest,” the companies supplying the raw materials are just… making money. Like, actual profit. What a concept.
Take aluminum. Every AI data center needs massive amounts of power, and every high-voltage line delivering that power needs one to two tons of aluminum per megawatt. Aluminum demand is jumping from 104 million tons in 2024 to 120 million by 2030. The price is up 10% this year and hitting three-year highs.
It’s like being the guy selling shovels during the gold rush, except the gold rush is artificial intelligence and the shovels are literally metals dug out of the earth.
The Rare Earth Reality Check
Then there are rare earth elements – the materials that sound like they belong in a sci-fi movie but are actually just sitting in the ground waiting to be dug up. These aren’t actually rare (thanks, misleading name), but they’re absolutely essential for everything that makes AI work: hard drives, cooling systems, networking hardware, fiber optics.
Without rare earths, the AI boom doesn’t slow down – it stops. Full stop. Game over. Insert coin to continue.
And here’s the kicker: There’s apparently an $11.3 trillion economic shift happening around rare earth production involving 127 companies and multiple countries. It’s like a global game of Monopoly, except instead of buying Boardwalk, everyone’s trying to control the stuff that makes computers think.
The Real American Dream 2.0
While everyone’s debating whether AI will take our jobs or make us all millionaires, there’s a simpler play happening: The shift from betting on the future to owning the present. Instead of trying to guess which AI company will win, you can invest in the companies that supply the materials every AI company needs.
It’s the difference between trying to pick the next Netflix and just buying the companies that make the cables that deliver the streaming. One requires you to be a fortune teller; the other just requires you to understand that computers need metal to work.
The hyperscalers might be torching their balance sheets in pursuit of AI dominance, but the miners and materials suppliers are just cashing checks. While Google dreams of space-based data centers, aluminum producers are watching their stock prices climb because, surprise, you need a lot of metal to build the infrastructure that makes AI possible.
So while everyone else is looking up at the stars, maybe it’s time to look down at the dirt. The real fortune isn’t being beamed down from satellites – it’s being dug out of the ground, one ton at a time.
Sometimes the most boring investment thesis is also the most profitable one.