Good morning,

Another wild year is behind us, and we expect plenty more ahead.

Our past December update emails have taken on a variety of forms, sometimes serving as just another simple posting on energy and data center news, while others were a more fulsome recap of the entire year, or even an attempt at predicting what's to come. This year, we're doing something different yet again by temporarily veering away from our core focus of energy and computing to offer up a slightly broader macro perspective on a few key topics. This may or may not all tie together quite as neatly as we'd like, but please take from it what you will.

A word of forewarning: while we believe the following charts and graphics are generally and directionally correct, we haven't necessarily chased down each and every primary source to confirm all of this information. As with most things in life, take this data (and our commentary on it) with a proverbial grain of salt.

Topic 1: U.S. vs China Electricity Generation

It's clear China's population is much larger than the U.S. and has seen more rapid growth over the past several decades, which helps to explain this sort of ramp in electrical generation. But that's not the whole story. On a per capita basis, US electricity generation peaked in 1999 while China is now producing 7x as much power per person as it was in that same year. It can easily be argued that this decline in U.S. per capita generation is a positive dynamic and represents increasing efficiency rather than just brute force capacity growth. However, in the coming years, the AI race may indeed come down to who can best power it, and the U.S. has its work cut out for it if it wants to keep up.

Topic 2: Global Birth Rates and Population Changes

Global birth rates might seem an odd topic to highlight in a monthly email update about energy and data centers, but it's easy to overlook how much impact these trends have on our daily lives. In an economic system awash in debt, how do you create growth in a world that will soon stop growing?

Note that China has already hit its peak population and is now in decline, unlike the U.S. which is expected to benefit (in aggregate terms, at least) from steady immigration. Make no mistake, this is a bigger problem for China than most can likely envision today and the future shortfalls may need to be solved through robotics and increasing automation. But even still, it's hard to see ongoing growth in China's critical real estate markets with a population now in an observable decline.

Topic 3: Stock Markets, GDP, and Company Values

The chart below shows the S&P 500 index since the mid-1980s. For those who remember the '87 stock market crash, it is barely a blip in the line below, while the tech bubble and real estate bubble are far more noticeable. The boom in equity valuations following the global financial crisis can, in large part, be attributed to the Fed's easy-money and low-rate policy throughout much of the 2010-2020 period, while the 2020-2025 post-COVID era run up has been even more dramatic. That said, this is still mostly a matter of perspective.

If one wants to take the view that this is just the latest obscenity created by unsustainable fiscal and monetary policy, there are a lot of points in favor of that argument. Conversely, those asserting that this is just the "new normal" have plenty of supporting evidence as well. In looking at the graphic above, it's hard to suggest that something meaningful hasn't changed since the twin bubbles of the 2000s, and even more so since the COVID pandemic. If you're an asset owner, you feel great. If you're working-class living paycheck to paycheck, it looks like a luxury train pulling away from the station, and you're not on it. Regardless of your perspective on what comes next, it's hard to deny these stock market dynamics are directly fueling the wealth divide and creating significant political pressures all around the globe. If, when, and how this all resolves itself are indeed excellent questions.

Meanwhile, U.S. GDP growth per capita has far outpaced the rest of the G7 countries, and even within Europe, the stark differentiation between Italy and Germany is raising some eyebrows.

Perhaps unsurprisingly, the U.S. is now home to 9 of the world's top 10 companies by market cap. Europe's largest company by market cap, ASML, ranks approximately 23rd in the world. It's also worth noting again that the top six (Nvidia, Microsoft, Apple, Alphabet (aka Google), Amazon, and Meta) are all now essentially being priced by the equity market as "AI companies," in one form or another.

But what happens to these companies, the stock market, GDP, and global prosperity when the measure of value becomes broken?

Topic 4: The Fiat Currency Endgame

Let's start this segment with some commentary from someone who famously hates bitcoin, gold, and betting against America: Warren Buffett.

"And obviously we wouldn't want to be owning anything that we thought was in a currency that was really going to hell. And that's the big thing we worry about with the United States' currency. The tendency of a government to want to debase its currency over time. There's no system that beats that. You can pick dictators, you can pick representatives, you can do anything, but there will be a push toward weaker currencies.

They devalue it at rates that are breathtaking, and that's continued. People can study economics and you can have all kinds of arrangements, but in the end, if you've got people that control the currency, you can issue paper money, and you will, or you can engage in clipping currencies like they used to do centuries ago. There will always be people, that's the nature of their job. I'm not singling them out as particularly evil or anything like that, but the natural course of government is to make the currency worth less over time. And that's got important consequences. It's very hard to build checks and balances into the system to keep that from happening."

We couldn't have said it better ourselves, Warren (and despite disagreeing with him about the value of gold and bitcoin, we strongly suggest our readers click the link above and listen to the Oracle of Omaha himself).

What you see in the chart showing dollar debasement is at least part of the explanation for why asset values (like the stock market, gold, bitcoin, and real estate) are up so much. In large part, it's simply that the U.S. dollar is being debased, even more heavily over the past 5-10 years than during the prior 10-20. We have little reason to believe this will stop.

So, what's the solution? Well, the market has decided gold is worthy of a second look, with the shiny metal hitting yet another new all-time-high of over $4,500 per ounce just this month.

But what about bitcoin? It's had a tough few months after hitting $125k in October, but that sort of volatility is nothing new for this still widely misunderstood asset. While Mr. Buffett is still not a fan, other institutional investors are finding their way into bitcoin via ETF products at a pace the skeptics would have never predicted. Household names now taking a real position in bitcoin as evidenced by the most recent 13-F filings include major institutions across the financial sector.

Sit safely on the sidelines if you must, but make no mistake that the value of your unbacked fiat dollars is being eroded each and every day. To Mr. Buffett's point, any number of well-selected traditional investments can, and likely will, outpace this debasement over the long run, but we feel few have cases so clear cut as those of bitcoin and gold.

Wrapping Up 2025

Before wrapping up, we just wanted to say another thank you to all of our clients, partners, suppliers, followers, supporters, and investors. It has been, for all of us we're sure, another incredible year filled with excitement and joy alongside uncertainty, challenges, and sometimes frustration. We saw announcements of multi-gigawatt data centers and we all felt whiplash from DeepSeek. There were new White House executive orders for bitcoin, for AI, and for energy. Utilities were flooded with interconnection requests for new AI data centers, while some asset managers decided to just buy the utility. Texas has created a bold new interconnection framework, while FERC and PJM have had their hands full deciding what comes next. And the fear of an AI bubble fades in and out of public consciousness with each quarterly earnings cycle. Indeed, what a year it has been.

We sincerely hope you and your family, friends, and colleagues have been enjoying a wonderful holiday season, and we at Greenlight wish each and every one of you an excellent finish to 2025, and an outstanding start to your 2026. Until next year, all the best!

Regards,

Andrew Webber, Chairman Greenlight Data Centers