Expanding US Rare Earths Supply Chain

Bloomberg

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00:00So to start, Rob, your reaction to the deal that the president did with Australia on rare earths

00:04and what it signals to you more broadly about what they'll do in supply chain.

00:08Yeah, well, as you highlighted, so the supply chain is really important. You need more rare

00:12earth minerals to come to the U.S. for consumer electronics and really just the evolution of

00:17everything, including AI. And so the rare earth supply chain needs to really develop kind of like

00:22the energy supply chain has evolved. And if you think about the energy supply chain in the U.S.,

00:27the U.S. is the largest energy producer in the world. AI is going to need a lot of electricity.

00:32The U.S. has a lot of natural gas. And so that's a benefit. And that allows the U.S. to maintain its

00:36AI dominance because of the natural gas and the ability to produce low cost electricity in the U.S.

00:42And that's just because of the supply chain in the energy sector is very well developed. So

00:46rare earth needs to follow a similar fashion. A big story on the Bloomberg Terminal today,

00:52written by my colleague Carmen Reinecke, is titled, AI Boom Transforms Utilities from Haven to Soaring

01:01Growth Stocks. And we're looking at the idea that the utility sector is up more than 40 percent,

01:07third best performing group in the S&P 500. This is, to an extent, your wheelhouse.

01:12You are trying to participate in what's happening in AI broadly through energy infrastructure and

01:17production. What do you make of that reporting, Rob? I think it's fantastic. And I think there's a

01:22lot of room to run. If you just think about all these cool things that AI does and the fascinating

01:26things that AI does, really the foundation of all of that are two things. It's data and it's

01:31electricity, basically. And those are the foundational elements. And so at Atortis, what we're doing is

01:35we're investing in the critical enablers, basically, and the infrastructure that enables all of these

01:41great AI opportunities going forward. So there's a lot of investment opportunities in electricity,

01:46as you highlighted. We need a lot more electricity. Basically, the next decade is going to be the

01:51age of electricity. We think that electricity is going to become the new oil. The U.S. is going

01:55to maintain its global AI dominance because of its ability to produce low-cost electricity. So

02:01companies like in my backyard, Evergy, it's actually a classic example of what you're talking about.

02:09It's going to actually increase its growth rate by almost 50 percent because there's new AI data

02:15centers coming to Kansas City, Missouri, where I happen to live. But this is happening all over

02:20the place. We're even having Bitcoin miners, basically. And this is really the interesting

02:23part. If you think about it, Bitcoin miners are actually converting, transforming from being

02:27Bitcoin miners to data center operators. Why? Well, because they have the electricity and the ability

02:33to simply transform their business and become really an entirely new business model. And then

02:40their valuations are being uplifted as well. Companies like Riot Platforms, Wolf, Otero Wolf are a couple of

02:47examples of companies that have been doing this. What you are trying to participate in tangibly, Rob,

02:54is the building of data centers or what will power them. But when I look at the portfolios that you

03:00manage and some of the ETF products, you've kind of broadened out to some of the names that we would

03:06more classically associate with servers. Dell is an example. What prompted you to make that move go beyond

03:13the energy thesis? Well, we just think if you think about AI, AI is the future, right? AI is the future

03:18economy. So if electricity is the new oil. But if you think about really what we're looking at is we don't think

03:24we think what's underrepresented investor portfolios is simply this. The enablers, the infrastructure, the

03:30companies that are enabling all of this AI development. So what does that mean? Well, that means data storage

03:35devices, network switches. Those are just a couple examples. Electricity, electricity generation are

03:40another couple of examples. Cabling, as well as servers. And so all of this underlying infrastructure

03:47is really, really important. It's the foundation really for the future of AI. And it's these enablers

03:53that we think aren't represented in investor portfolios. So we created a product called the

03:58Tortoise AI Infrastructure Active ETF that really offers investors a way to invest in the active enablers.

04:04So what does that mean?

04:06Okay, let's see.

04:07Okay?

04:07Okay, let's take some examples.

04:08We don't have to join this in the industry.

04:09Okay, let's see.

04:10Okay, let's see.

04:11Okay, let's see.

04:11Okay.

04:13This is a great deal.

04:15Let's see, so here we go.

04:16Let's see.

04:18Okay, alright.

04:18Okay.

04:19Okay, well.

04:20Okay.

04:21Okay, let's see.

04:22Okay, let's see.

04:22It's a great deal, so.

04:24Let's see.

04:24Okay, let's see.

04:25Let's see.

04:26Okay, let's see.

04:27Okay, okay.

04:27Let's see.

04:28Are we going to the right now?

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