AI Boom = Commodities Super-Boom? | Tavi Costa

**Tavi Costa** (0:01)
What did you steal?

**Mike Preston** (0:02)
Secrets.

**Adam Taggart** (0:04)
Disclosure Day is Steven Spielberg's best film in 20 years.

**Mike Preston** (0:08)
Are they people? No.

**Adam Taggart** (0:11)
Are they human?
My God. Spielberg does this better than anybody in history.

**Mike Preston** (0:18)
I can see them.

**Adam Taggart** (0:19)
They're coming.

**Mike Preston** (0:22)
Disclosure Day, rated PG-13.

**Adam Taggart** (0:24)
Some material may be inappropriate for children under 13
In theaters Friday. Get tickets now.

**Tavi Costa** (0:31)
This episode is brought to you by Starbucks. That is fire.

**Adam Taggart** (0:35)
Whoa.

**Tavi Costa** (0:36)
That's good. This might be the drink of the summer.

**Mike Preston** (0:38)
Okay. I like this one too. I'm rocking with it. Okay. Try it for yourself. Starbucks Refreshers Concentrates are coming home.

**Tavi Costa** (0:44)
Find them in the coffee aisle and make it yours.

**Adam Taggart** (0:50)
All right. We should be live. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, and I'm very excited for this livestream.
We're going to be talking about all things, commodities and hard assets, but specifically with just this tremendous amount of spending that's going on, the AI build out, all the capex that's being spent.
Obviously, you need things from the real world to build those data centers, to build those electrical transmission lines, to build those power stations, etc. So is the AI boom leading to a commodity super boom? I can't think of a better person to talk about this with than Tavi Costa, who joins us here. Tavi, I'm sure folks probably remember Tavi from his years at Crescut Capital. But he is one of the top macro and commodity experts out there. He is now running his own show over at Azuria Capital. Tavi, thank you so much for joining us today.

**Tavi Costa** (1:44)
Thanks for having me. Looking forward to this conversation.

**Adam Taggart** (1:47)
Me too. All right, Tavi.
Well, look, we got about an hour here. I'm going to try to make the best use of that time as possible. If we can, folks, I'll try to pull in one or two questions from the live community. But rolling up our sleeves here, Tavi, lots of questions for you on a whole bunch of different topics. But this main theme, is the AI boom leading to a commodities super boom?

**Tavi Costa** (2:14)
Well, I believe that that's going to be the case. I think we're in this whole discussion of if we're going to reach age of abundance, it requires so much infrastructure to get there. And it's not just the AI. I think the AI boom is a very important aspect. And when you think about what's happening globally with the arms race of technology and what's causing countries to see this as a real threat for their economies and forcing them to invest, and we'll often get the question, what do you see the AI companies or related companies having to pair back on investments? I think that the government is going to step in.
It is such an important critical aspect of surviving for most of these countries when it comes to economically of what the relevance of this technology could have in society. I believe that that's going to be the case. But then you also have another issue that it's been triggered potentially, I guess, even a decade ago, which has been, in my view, the major deglobalization shift that obviously was intensified after the Russian and, or I should say after COVID was even one of the most important aspects of that, given ourselves really realizing of how much the supply chain was reliant on countries like China.
Some people were well ahead of that. I remember talking about this a long time ago, in fact.
But that became a whole topic. Now, unshoring is sometimes not mentioned as part of this issue. But it's, just look at the electricity consumption in China, for instance, which is the manufacturing plant of the world.
It looks like this. You look at the US over the last few decades, and it has basically gone flat. So if we're going to go back to a world where the US needs to produce its own goods and services again, we're probably going to see electricity consumption surge the same way. That's going to be also the same requirement of infrastructure. The AI is going to be forcing private and also public money to be chasing. So all that leads back to what materials will look like. I like to say that there's pillars of investments. It's going to be as capital allocators need to be watching. To me, it's materials is one of them. Energy is likely to be another one, of course. And the infrastructure aspect, when it comes to particularly, engineering firms, cement firms, all these other types of businesses that will also be linked to benefiting steel producers, they'll be linked to this idea. And so, yeah, lots of ways to twist this conversation, but that's the way I view this.