Elon Will Handle the Energy Bottleneck Himself: Buys APR Energy for $1B

**Josh** (0:00)
Elon Musk just spent over a billion dollars of his own money to buy a company that no one's ever heard of. It's called APR. And the strangest thing about this company is it doesn't make AI chips, it doesn't make rockets, it doesn't make any sort of AI model. It makes gas turbines that sit on a trailer, get wheeled into your data center campus and powers it on all your GPUs in a matter of days. Now, this is coming from the guy that spent two decades philosophizing about solar energy. When you unpack why he made this purchase, it reveals a new trade in the AI space, which explains why memory stocks are crashing currently. Energy is explicitly abundant in the US, but bringing that energy online to power the billions of dollars worth of GPUs that are going online this year is an incredibly hard feat. And there's a small category of companies that are helping do this in 2026

**Ejaaz** (0:52)
Yeah, there's a company called APR Energy, which is the name of the company which he purchased. And it has a pretty funny backstory. It was founded in Jacksonville in 2004, then listed on the London Stock Exchange in 2011 And in 2013, it bought GE's energy rental business to become the largest mobile gas turbine leaser in the world. And then ever since then, it's been passed around and taken private to private equity. And due to some investigative work and searching through filings, we were able to see that Elon Musk bought it for about a billion dollars. So what did he get for a billion dollars? The answer is about a gigawatt of power.
For reference, a gigawatt of power powers roughly 750,000 homes, and it's also the output for one size nuclear reactor. This gigawatt is also enough power for about 600,000 H100-class GPUs, which is, I mean, as far as I'm concerned, the largest coherent cluster. So if he's actually able to get another gigawatt, that's amazing. But the question that left me is, why is this owned by Elon and not SpaceX AI or Tesla? It's like, why of all the categories is he choosing this one? Why this particular company and why on his personal balance sheet?

**Josh** (2:00)
Yeah. So I have a few theories as to why he might want to do this.
One obvious one is he might want this to apply to a bunch of different companies. The other main one being Tesla, and Tesla, for what it's worth, is meant to be an exclusive company separate to SpaceX AI, although there are rumors that they might eventually merge at some point in the future. So I think this is more like a tax slash structural reason why he purchased the company on his own dime. In fact, the only reason why we learnt about this purchase is because one of the companies that was invested in APR had to disclose personal returns of $50 million. That's the only reason we were able to realize that Elon made this purchase. Now, if we zoom out for a second, we've heard that energy and power is the next bottleneck for AI. But I think a lot of people don't actually understand why and what the problem is. I just want to touch on that very briefly. Now, if we rewind about three years, 2023, the demand for data center energy was roughly at around 23 gigawatts, which at the time was gargantuan. We did not have near that amount available to bring online. Fast forward to 2026, that has more than doubled to 46.5 gigawatts, I believe, in total. Now, the issue is, in this year alone, we are only planning to bring online 12 gigawatts. That's significantly less than that 46 target, right? But it gets even worse. We are currently on track and we're over, near over half the year now, on track to bring online five gigawatts of that 12 gigawatts commitment. So, the point I'm trying to make is there is a significant bottleneck and it's very, very slow to bring energy online. Now, if you might ask, well, don't we have an abundance of energy in the Western America in general? The answer is, yeah, we do. But it's incredibly hard to bring this energy online. We need access to high-voltage transformers, we need access to grid infrastructure, we need all the permitting and regulations around this. All of this slows everything down to the tune of five to seven years. I'm not exaggerating, we're talking about like almost over half a decade to do any of this. Now, what Elon's purchase shows us is, he's kind of going into the gray area. Now, there's this thing called the Clean Air Act. And it's basically this act which states, you can't bring gas turbines onto your data center in order to power up your GPUs. That's kind of like not illegal, but it's allegedly kind of like not malpractice. Now, the fact that he's purchased this company allows him to bring permitted gas turbines onto his data center ground under that Clean Air Act. So it doesn't trigger any kind of like warnings or anything like that, which allows him to power up his GPUs. So Elon is being very smart. He is trying to be the fastest scaler for bringing GPUs online, so he can build the best model. That's what Matt is trying to do, and that's what he's trying to do with Grok 4.5 and subsequent models.