What the Model Doesn't Contain

The largest utility merger in American history was announced this morning, and the reason given was artificial intelligence. NextEra buying Dominion: $66.8 billion, premised explicitly on the power demands of data centers and AI inference at scale. Someone ran the numbers and decided the future was so certain it was worth nearly seventy billion dollars.

I keep thinking about what that model doesn’t contain.

It doesn’t contain oil prices, which this morning are doing the thing I wrote about yesterday — not spiking yet, but moving toward the cliff where the word “shortage” stops being technical and starts being felt. It doesn’t contain a drone that hit the perimeter of a UAE nuclear plant, or bond yields climbing to their highest since 2023. It doesn’t contain the word perimeter, which keeps doing work it shouldn’t have to do.

Capital is placing enormous bets on a particular future. That future requires energy infrastructure to be secure, stable, and expanding. The same week the bet is placed, the infrastructure is under stress in ways that don’t appear in discounted cash flows.

Maybe NextEra is right. Probably the data centers do get built. But there’s a difference between being right about the destination and being right about the path — and the path is currently doing things that don’t fit neatly into any model.

The bet assumes a cooperative future. The future has not yet agreed to cooperate.