Understanding AI's Hard Assets: Power, Land, and Critical Minerals

A GP's Lens on Investable Tailwinds

American energy is at an inflection point. The United States must balance reducing carbon emissions with meeting surging electricity demand from AI data centers, a round-the-clock load that has created a supercycle in infrastructure and resource deployment.

The public debate is often depicted as a choice between fossil fuels or renewables, but that view oversimplifies the reality. A diverse mix of reliable clean energy sources such as nuclear, geothermal, natural gas with carbon capture, hydropower, and critical minerals can help meet demand while keeping emissions in check.

For investors, the combination of structural demand growth and significant capital requirements creates a long-term opportunity. The future will be defined not by absolute choices, but by pragmatic solutions that provide reliability, scalability, and sustainability. A new generation of clean energy companies is advancing this approach and demonstrating the potential for energy security, lower emissions, and economic growth.

For general partners, the opportunity is clear: allocate capital at the center of this historic energy transition.

1. Power: Firm, Clean, and Financeable

AI loads require reliable, firm power available around the clock. The following technologies are investable now, with policy support accelerating deployment.

Natural Gas with CCUS: The fastest way to deploy firm capacity. Projects are financeable with Section 45Q tax credits and the DOE Loan Programs Office (LPO).

Nuclear Energy: Growth through life extensions, uprates, and Small Modular Reactors (SMRs). The ADVANCE Act (2024) modernized licensing and strengthened domestic fuel supply chains.

Geothermal Energy: The CLEAN Act and HEATS Act are bipartisan bills that passed the House convincingly last November with support for deployment. Scaling with Enhanced Geothermal Systems (EGS) and streamlined permitting. The DOE supports geothermal through its Geothermal Technologies Office, EGS pilot demonstrations, and the GRID program for grid integration.

Hydropower: A proven baseload and flexible source. Supported by the Maintaining and Enhancing Hydroelectricity and River Restoration Act, the Hydropower Licensing Transparency Act, and incentives under 45Y Clean Electricity PTC and 48E ITC. DOE’s Section 247 Program further funds modernization.

Critical Minerals: Bolstered by bipartisan bills like the Critical Minerals Security Act (2025), Critical Mineral Consistency Act (2025), Strategic Minerals Act, and the Securing America’s Critical Minerals Supply Act. Complemented by the Section 45X Advanced Manufacturing Production Tax Credit, DOE programs (CMM, CORE-CM, ~$1B funding, LPO loans), and DoD actions under the Defense Production Act (e.g., $400M in MP Materials, $20.6M for nickel exploration).

2. Land: The New Bottleneck

Grid-ready land is scarce and valuable, with premiums accruing to parcels that offer:

• Transmission adjacency
  
  
• Permitting velocity (brownfields, coal-to-nuclear conversions)
  
  
• Water security
  
  
• Multi-resource optionality (co-location with firm power sources)

This dynamic mirrors logistics real estate during the e-commerce boom, where scarce sites with strategic access commanded a premium.

3. Critical Minerals: The Inputs of Intelligence

Copper, lithium, nickel, cobalt, and rare earths are fundamental to both data centers and clean power infrastructure. Supply is concentrated, but policy is de-risking supply chains and building domestic capacity.

Investment angles include upstream control, midstream refining, and tech-enabled extraction.

4. Policy Tailwinds: Financial & Regulatory Support

Policy drivers create durable support across project categories. Notable enablers include:

• R&D expensing (permanent)
  
  
• 100% bonus depreciation (permanent)
  
  
• Business interest deduction on EBITDA basis (permanent)
  
  
• Full expensing for qualified production property (time-limited, incentivizing near-term deployment)

5. GP Lens: Who Wins

• Private Equity (PE): Best positioned for large, capital-intensive infrastructure such as SMRs, gas with CCS, EGS, hydro modernization, and mineral refining.
  
  
• Venture Capital (VC): Suited for enabling technologies like grid software, novel chemistries, and advanced geothermal.
  
  
• Private Credit (PC): Critical as bridge financing for shovel-ready, policy-backed projects.

Representative Investors, Government Catalysts & Technologies to Watch

Nuclear

• Government Catalysts: DOE Reactor Demonstration Program, ADVANCE Act, DoD’s Project Pele (microreactors).
  
  
• Investors: Breakthrough Energy Ventures (fusion, SMRs), DCVC (Oklo), Lux Capital (frontier nuclear).
  
  
• Technologies to Watch: Small Modular Reactors (SMRs), advanced fuel cycles (HALEU enrichment), and fusion startups moving toward demonstration scale.
  
  
• Why It Matters: Capital-intensive with long-duration contracts → PE GPs dominate; VCs gain from enabling tech.

Geothermal

• Government catalysts: DOE EGS Pilot Demonstrations ($84M+), CLEAN Act, HEATS Act.
  
  
• Investors: Azolla Ventures (Fervo Energy), Prelude Ventures (Baseload Capital), Energy Impact Partners (grid-scale resilience).
  
  
• Technologies to Watch: Enhanced Geothermal Systems (EGS) drilling tech, closed-loop geothermal, and AI-enabled reservoir modeling.
  
  
• Why It Matters: Transitioning from niche to scalable → VC tech upside, PE platform plays.

Hydropower

• Government catalysts: DOE Section 247 incentives, Hydropower Licensing Transparency Act, modernization grants.
  
  
• Investors: Copenhagen Infrastructure Partners, Quinbrook Infrastructure Partners, Brookfield Renewable Partners.
  
  
• Technologies to Watch: Small-scale modular hydro, pumped storage hydropower, and turbine retrofits improving efficiency and environmental compliance.
  
  
• Why It Matters: Modernization cycle + stable contracts → PE/infrastructure GPs win.

Critical Minerals

• Government catalysts: DoD $400M in MP Materials, $20.6M nickel exploration, DOE CMM & CORE-CM (~$1B), 45X tax credit.
  
  
• Investors: Kinterra Capital (copper/nickel), Appian Capital Advisory (mining/refining), InfraVia Capital Partners (European metals strategy).
  
  
• Technologies to Watch: Direct lithium extraction (DLE), solvent extraction and separation for rare earths, battery recycling, and AI-driven exploration platforms.
  
  
• Why It Matters: Inputs of intelligence + strategic offtakes → PE control deals + private credit bridge financing.

Mission Meets Margin

The AI demand shock is not just a digital event; it is an industrial revolution in disguise. Data centers are becoming the new factories of the 21st century, and they will only grow hungrier for power, land, and materials. Meeting that demand requires more than incremental change. It requires a new era of firm, clean energy and modernized infrastructure.

For general partners, this is not a speculative story about technologies that might succeed one day. Nuclear life-extensions and SMRs, natural gas with carbon capture, advanced geothermal, hydropower modernization, and critical mineral supply chains are here now and backed by durable policy support. Grid-ready land is emerging as the new logistics premium. Critical minerals will shape the geopolitics of supply chains for decades. These are hard assets with long-duration value and scarcity premiums.

The future of American energy will be defined by integrated systems that combine reliability, scalability, and sustainability. That shift opens the door for investors to create the backbone of the digital economy while advancing energy security and emissions reduction.

This is more than infrastructure. It is a generational build-out of the physical foundations of intelligence. By owning and shaping these assets, investors can lead one of the most important transformations of our time. For GPs, the opportunity is to capture durable returns while helping design a cleaner, more resilient, and future-proof energy system. The next great chapter of American growth will be written not just in code, but in concrete, steel, and electrons — and the time to position capital is now.

For more information on the investors, allocators, and funds driving these opportunities, book a demo of dakota marketplace today!