Build, baby, build

**Jawad Mian** (0:00)
Today, I'm speaking with Daniel Dreyfus, founder of Bornite Capital, about one of the most important investment stories of our time, the rebuilding of America's power infrastructure. For decades, power demand in the US was flat, but that's changing fast. Driven by electrification, the reshoring of manufacturing, and the energy demands of artificial intelligence, the country's aging grid is being pushed to its limits. To keep up, we'll need trillions of dollars in investment, tens of thousands of miles of transmission, and a comprehensive energy strategy. This isn't just an upgrade, it's a full transformation. Dan has been ahead of the curve in identifying the companies and commodities that will shape this next cycle. In our conversation, we talk about where he sees opportunity, what risks he's watching for, and how to separate real value from hype in a moment that feels both urgent and uncertain. It's a conversation about power, capital, and the stories we tell when we're building something big. Dan, you've said that President Trump's mantra should shift from drill baby drill to build baby build. What, in your view, is the essence of that shift?

**Daniel Dreyfus** (1:05)
I think that shift has happened and is happening, Jawad. If you look at his policies, I think, number one, the whole idea behind the tariffs, the genesis behind the tariffs, the outcome he wants from the tariffs, isn't just to raise prices for the consumer and do harm to other countries. The end game here is he wants to reindustrialize America. And it's incredible to look at the history of industrial production in America. Prior to 2000s, for decades and decades and decades, industrial production growth mirrored GDP growth. If it was a stock, industrial production had a one beta with GDP growth. Then in the year 2000, when China entered the WTO, that relationship completely broke down. And industrial production grew at a 0.25 beta to GDP growth. And it stayed that way, really, up until now.
And clearly, there is causation here between China entering the WTO and the globalization trend and the offshoring trend that we've all lived through for the past 20 years. And I think it has done structural damage to our economy. I don't think we need to manufacture everything in the US., obviously, but there are things that really we should be manufacturing here that we're outsourcing overseas. We should have more semiconductor fabs here. We should have more gigafactories here. We should have way more life sciences facilities and pharmaceutical manufacturing here. It's outrageous that we're importing 60% of our penicillin needs from China.
There's plenty of industrial activity that is advanced, high paying, Americans would love to have those jobs. And I believe that that is Trump's end game, what he's trying to accomplish with these tariffs, to incentivize companies to come and build here. Now, the way, the reason I say build baby build, instead of drill baby drill, is we're moving away from liquid hydrocarbons to electricity. You know, there's a saying recently that semiconductors are the new oil. Well, semiconductors live in one place, which is a data center, and or electric device or whatever, but whatever you need a semiconductor for, you have to plug it in, and it consumes copious amounts of electricity. And so if you take the oil, semiconductors is the new oil catchphrase one step further, what that effectively means is electricity is the new oil, because electric power powers every semiconductor. And if we're entering a world where we're trying to re-industrialize America, and we're trying to be the global leader in AI, the problem is, and the gating factor here, is that we have such a severe infrastructure deficit in this country, that we're going to be unable to bring all these factories back at the pace we want them to. We're going to be unable to build all the data centers that consume copious amounts of power that we want to, because we've under invested in our infrastructure for so long. And now, we're at the dawn of a multi-decade reinvestment cycle to catch up and get with the new world. And this is squarely in line with what I believe Trump wants the end game to be. So yes, drill baby drill is a thing of, you know, it's like, okay, boomer. That's a thing of the past. Today, it should be build baby build. That's what he should change the phrase to.

**Jawad Mian** (5:26)
So power demand grew just 0.35% over the last 20 years or 8% in our grid. Electricity is the fastest growing portion of the energy mix now, as you pointed out. How would you characterize the scale and urgency of the current grid and power infrastructure needs?