The artificial intelligence (AI) revolution continues to capture the attention of investors worldwide, with its transformative potential being impossible to ignore. However, in this fast-changing market, the winners and losers can shift almost overnight.
Recently, Satya Nadella, the CEO of Microsoft (MSFT), shared comments in an interview that could pose a potential challenge for Nvidia (NVDA), a big winner in 2023 and 2024. However, his remarks might pave the way for significant opportunities for certain commodities and related stocks.
Earlier this month, Nadella appeared in a podcast with venture capitalists Brad Gerstner and Bill Gurley, during which he revealed that Microsoft is no longer facing the shortages of Nvidia chips that had previously constrained the company. This change could have far-reaching implications for Nvidia and the broader AI industry. In the podcast, Nadella stated:
I am power [constrained], yes, I’m not chip supply constrained … We were definitely constrained in ’24. What we have told the street is that’s why we are optimistic about the first half of ’25 which is the rest of our fiscal year. And then after that I think we’ll be in better shape going into 2026 and so we have good line of sight.
Since these remarks, Nvidia stock has been underperforming. Starting in 2023, Nvidia benefited from AI’s overwhelming demand for chips, which outstripped available supply, leading to skyrocketing revenues and margins for its GPUs. However, Nadella hinting that supply constraints could soon be over may indicate:
While there have been rumors that innovation in AI models—such as large language models—may be slowing down, key industry players have denied this. Microsoft’s recent commentary suggests another explanation: the company’s self-designed “Maia Accelerators” may be ramping up production volumes, rather than Nvidia chip demand declining.
Microsoft, unlike other cloud competitors, was late to the custom chip game. However, it started catching up quickly. By the end of 2023, Microsoft introduced its own proprietary “Maia Accelerators” and “Cobalt CPUs,” and 2025 could mark a significant point in their mass production.
Nadella’s remarks about being “energy-constrained” emphasize that AI demand remains strong, especially among enterprise clients. This suggests Microsoft’s shift away from Nvidia chips has more to do with its in-house solutions scaling up than a reduction in overall demand.
Nadella’s comments on “energy constraints” highlight the growing power demands of AI data centers. Forecasts indicate that the U.S. may experience unprecedented electricity demand in the coming years, driven by the needs of AI infrastructure.
This raises the question: What energy sources can be quickly deployed to meet this demand? While renewable energy options such as solar and wind hold great promise, they face issues like intermittent availability and lengthy construction timelines, making them less suited for the 24/7 power required by AI data centers. Similarly, though nuclear energy stocks thrived in 2024, nuclear plants take years to build or revive. For instance, Microsoft’s supply agreement with the Three Mile Island nuclear facility will only come into play by 2028.
This leaves natural gas as one of the only viable energy sources that can be deployed rapidly to meet surging AI-related energy demands. Renowned hedge fund manager David Tepper has pointed out this reality, stating, “If you’re going to meet the energy needs of AI, you’re going to have to use natural gas.” Similarly, Morgan Stanley energy analyst Stephen Byrd recently projected that natural gas demand and stocks could see a major boost as data center power requirements grow. Byrd even suggested that new natural gas facilities could be built on-site for AI data centers, directly feeding them while bypassing long grid-approval processes.
While Nvidia has been the clear winner in the AI revolution to date, its dominance may face challenges as the chip supply landscape shifts and technologies from companies like Microsoft evolve. At the same time, increasing energy requirements for AI infrastructure present a golden opportunity for the natural gas sector to shine. In 2025, natural gas might emerge as the surprise winner of the AI boom, providing not only the power necessary for AI’s growth but also substantial investment returns.
