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Investment thesis · Live

Demand for firm power is becoming the bottleneck for the AI sector, and three turbine makers hold the keys to it

Data centers running artificial intelligence need gigawatts of firm capacity faster than the transmission grid can deliver it. The catch: barely a handful of companies in the world build large gas turbines, and their order books are bursting.

Published July 5, 2026 · 180-day horizon · supply and demand

Basket return
-7.3%
equal weight, since publication
The market over the same window
+3.0%
benchmark for this basket
Edge over the market
-10.4%
in percentage points
Causal chain: Build-out of compute infrastructure for AI → Bottlenecks in power grid interconnection → Gas turbines as a fast, firm source of power → Oligopoly of 3 manufacturers and sold-out capacity → Pricing power and decades of high-margin service revenue → Heavy gas turbine manufacturers

What this thesis rests on

Each one is a statement that has to be true. We go back to every live thesis on a schedule and check these against public sources, so each leg carries either what we found or the date we look next.

Checked every 14 days. Last review August 28, 2026, next one September 11, 2026.

  1. No manufacturer outside GE Vernova, Siemens Energy and Mitsubishi Power books an order for a heavy-duty gas turbine above 300 MW (H/J/JAC class) during the 180-day horizon.

    competitive · Open

    Checked August 28, 2026, nothing published either way

  2. GE Vernova reports a Power segment book-to-bill ratio above 1.0 in each quarterly report filed within the 180-day horizon.

    financial · Supported

    A source confirms this · August 28, 2026

    Q2 2026 results, released 22 July 2026: Power segment orders of $16.7 billion, up 134% organically, against Power segment revenue of $5.5 billion, a book-to-bill of roughly 3.0. The next quarterly report in the horizon has not been filed.

    See the source ↗

  3. GE Vernova's reported Power services backlog stays above 60 billion USD and remains at least twice its Power equipment backlog in every 10-Q filed in the horizon.

    financial · Open

    Checked August 28, 2026, nothing published either way

  4. Siemens Energy reports a Gas Services profit margin before special items above 10% in both quarterly reports published within the horizon.

    financial · Supported

    A source confirms this · August 28, 2026

    Q3 FY2026 earnings release, Munich, 5 August 2026, for the quarter to 30 June 2026: Gas Services profit before special items of EUR 648 million on a profit margin before special items of 17.3%. The second report covered by the claim is due in November.

    See the source ↗

  5. GE Vernova discloses heavy-duty gas turbine slot reservations filled through at least 2028 and announces no capacity expansion above 20 GW of annual heavy-duty output during the horizon.

    operational · Challenged

    A source challenges this · August 28, 2026

    Q2 2026 results, 22 July 2026: GE Vernova states it has completed actions for 20 GW of annual gas turbine output and is on track for 24 GW in 2028, with actions under way to reach 30 GW in 2030. That is heavy-duty capacity expansion above 20 GW announced inside the horizon.

    See the source ↗

Most of the capital in artificial intelligence flows toward chipmakers. Meanwhile, the hardest constraint, the one nobody can step around, sits a layer below: it is electricity, and more precisely immediate access to very firm power. A modern data center can draw as much power as a small town. These sites need uninterrupted supply located close to the load and switched on within a short window of two to four years. That is a physical limit on growth that no amount of source code will overcome. And that is exactly where the real supply problem in the market sits today.

Why gas turbines specifically, rather than green energy or grid expansion? Interconnection queues in the US and Europe run for years. Transmission system operators cannot build high-voltage lines at the pace the tech giants demand. Renewables, for their part, get bogged down in permitting and are intermittent by nature. Batteries can only shift energy in time, they do not create it out of nothing. Next-generation nuclear (SMRs included) is still a decade away from commercial scale. Heavy gas turbines remain the only technology that lets operators build large, fully dispatchable capacity right next to the server halls inside the timeframe they are working with. The leading cloud providers and the utilities tied to them understand this perfectly well, and are ordering gas units in bulk.

This thesis, over time

What has happened since publication. Every entry is computed as of its own date, from price history.

August 28, 2026

Review: 1 of 5 assumptions broken

We went back to this thesis on day 54 of 180 and checked each of its 5 assumptions against public sources. Broken by the sources: 1. Confirmed by the sources: 2. No news either way: 2. The equal-weight basket stands at -7.3% since publication day. The benchmark (.INX) returned +3.7% over the same window, so the basket trails its market by 11.0 percentage points. 126 days remain until the verdict.

August 19, 2026

Day 45 of 180: basket -3.9%

The first quarter of the horizon is behind this thesis. The equal-weight basket stands at -3.9% since publication day. The benchmark (S&P 500) returned +3.1% over the same window, so the basket trails its market by 7.0 percentage points. The strongest contributor is 7011 (+8.0%), the weakest is GEV (-11.5%). 135 days remain until the verdict.

July 28, 2026

Basket fell below -10% since publication

This basket is at -11.2% since publication, 23 days after the thesis was posted. The benchmark (S&P 500) returned -0.7% over the same window, so the basket trails its market by 10.5 percentage points. The strongest contributor is 7011 (+0.3%), the weakest is ENR (-18.0%). This is not a change of status: the horizon keeps running and the verdict only lands once it expires.

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This is analysis, not investment advice and not a recommendation to buy or sell anything. We publish it and track it in public, mistakes included. Any decision is yours and yours alone.