With investing, AI's gain may be energy's loss
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AI may be siphoning off investment dollars that once flowed to energy startups, according to a new report from the International Energy Agency.
Why it matters: The global shift is a stark, data-driven sign of the times — climate ambition is collapsing just as the AI race accelerates.
Driving the news: Some of the world's largest venture capital funds that back energy startups have redirected at least part of their capital toward AI.
Zoom in: Across the 50 biggest funds investing in energy, specialization in energy innovation has slowed since 2022 — tracking with a rise in AI investments, the report finds.
Reality check: At the macro level, this is correlation, not clear causation. It would take a deeper dive into individual deals to determine who's truly losing — and who's winning — at the other's expense.
Between the lines: There's an irony here: The AI boom's biggest need — energy — may be getting financially undercut by the boom itself.
Yes, but: The IEA says AI isn't the only factor. Higher interest rates and other market pressures are also dampening energy investment.
What we're watching: To what degree the AI surge ultimately pulls more money back into energy innovation to power its own growth.
What's next: Major tech companies are pledging billions for clean energy, from fusion to geothermal — potentially reshaping the investment landscape yet again.
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