The potential of AI to revolutionize various aspects of life has been a driving force behind the S&P 500 Index’s 50% rise over the past two years. To realize the real-world profits implied by their stock valuations, Big Tech is investing heavily in physical infrastructure. Alphabet, Microsoft, Amazon, and Facebook are expected to spend over $200 billion next year, much of it on data centers. The land owned by Texas Pacific Land Corp. is seen as valuable due to its potential for cheap electricity generation.
Key takeaways:
- Texas Pacific Land Corp., a Dallas-based land company, has seen its stock more than triple this year due to market excitement over artificial intelligence, giving it a market value of almost $40 billion.
- Big Tech companies like Google, Microsoft, and Amazon are looking to access cheap electricity for their energy-consuming servers, and Texas Pacific Land Corp.'s land in the oil-rich Permian Basin could provide that.
- The company's shares surged 14% on the news that it would replace Marathon Oil Corp. in the S&P 500.
- There is a growing idea that the cheap, abundant gas produced in the Permian Basin could be used for power plants, which could supply energy to data centers, crypto mines, and the oil field.