Why Geothermal Energy Is the Answer to AI's Energy Crisis

Investors are hyperfocused on AI stocks... understandably so.

After a bruising drawdown following the "Liberation Day" tariff announcements in early April, many AI-related stocks have rallied off their lows:

Chipmaker Nvidia (NVDA) has rebounded more than 70% since its April 4 low, and its competitor Advanced Micro Devices (AMD) is up more than 60% over the same period.

AI software firm Palantir Technologies (PLTR) has soared more than 90% since then...

But, just for a moment, forget about AI stocks.

Unseen by most investors, another technological breakthrough is gaining traction with everyone from the large tech firms to the U.S. government.

The growth of this industry could rival that of AI in the years ahead while simultaneously solving the energy crisis sparked by the proliferation of AI data centers.

And, yes, I expect early investors could do very well.

Let me show you what I mean...

Amazon Is Going Underground

This week, e-commerce giant Amazon (AMZN) announced plans to build a groundbreaking fulfillment center in Nagoya, Japan.

The facility would be Amazon's first building anywhere on Earth to harness geothermal technology to heat and cool the building. Engineers will drill 200 bores more than 300 feet deep to tap into the Earth's naturally stable underground temperatures.

Put simply: Amazon will use the natural, clean, and limitless energy beneath the Earth's crust to help power the facility.

The so-called geoexchange system circulates water through those deep bores. Thanks to the ground's consistent temperature, the system both cools the water in summer and heats it in winter. The water is then pumped back to the surface and regulates the temperature of the air passing through the ducts.

The result? Amazon anticipates a 30% drop in energy use compared with traditional air conditioning.

Combine that with 5.5 megawatts ("MW") of solar panels and 2.9 megawatt-hours ("MWh") of battery storage, and Amazon expects this building to earn "Zero Carbon Certification" by 2026.

This initiative is another step in a global transformation that's gaining serious momentum.

When Amazon makes a move like this, investors need to pay attention.

And Amazon isn't alone.

Why Geothermal Could Be the Answer to AI's Energy Needs

The AI revolution is creating an immediate crisis for our electrical grid. The tech companies driving AI innovation are constructing immense data centers to build and train their new tools. These centers consume as much power as a small nation.

America's power infrastructure was not built to handle that kind of demand, and the cracks are showing.

But geothermal energy is offering a viable solution... And Silicon Valley's top companies know it. They're snapping up geothermal opportunities across the U.S. and the world...

In June, social media giant Meta Platforms (META) signed a 150-MW agreement with XGS Energy – a privately held startup – to build a next-generation geothermal facility in New Mexico.

This project is revolutionary because it operates without water.

This is a massive breakthrough. A typical data center uses up to 300,000 gallons a day for cooling. Those water demands are a growing environmental and regulatory challenge for AI infrastructure.

XGS's closed-loop geothermal system eliminates water use entirely. As computing demands of AI soar, waterless platforms provide a scalable and sustainable growth trajectory in drier areas of the country.

The New Mexico project will increase the entire state's geothermal electricity output 10-fold. And the investment growth in geothermal is surging.

Pay attention to these numbers.

North America's geothermal sector attracted $1.7 billion in public funding during the first quarter of 2025, according to consultancy Wood Mackenzie. That figure represents 85% of what the entire sector received from investors in all of 2024. Business is booming.

In addition, we've seen an 80% year-over-year increase in new geothermal well announcements.

All the while, the technology's output is becoming cheaper without the need for government subsidies.

Look at Fervo Energy's 500 MW Cape Station project in Utah's Black Desert. This is where I took a camera crew in March to learn about the potential of geothermal for investors.

And what an achievement by the company.

In June, the Fervo showed it can be commercially viable at $79 per megawatt-hour without subsidies. That's right – no government handouts required.

This figure is stunning. At $79/MWh, Fervo is now undercutting new nuclear plants by roughly 50%. The average new nuclear site runs between $142 and $222/MWh.

Geothermal also surpasses most coal plants, which operate at $69 to $168/MWh. It also rivals natural gas plant costs, which run from $45 to $108/MWh. And all the while, it has no fuel costs, no commodity-market volatility, and no supply-chain disruptions.

Fervo's achievement will produce 24/7 baseload power. Best of all, there is plenty of growth potential.

The U.S. possesses more than 500 gigawatts ("GW") of untapped geothermal potential, according to the U.S. Department of Energy. Currently, we're only using about 4 GW across the country. The untapped geothermal energy could supply America with electricity for well over a century.

Geothermal currently supplies less than 1% of global energy needs.

But analysts believe it could provide 15% of worldwide power by 2050.

That's why we must keep our eyes on the U.S. and on nations like Japan.

Why EGS Is the Next Great Energy Opportunity

Remember, three primary reasons drive our optimism in geothermal energy in general and enhanced geothermal systems ("EGS") specifically.

It's a technological breakthrough. The newest geothermal platforms have solved horizontal constraints and cracked through formations that were once deemed too difficult for geothermal development.

Recent enhanced geothermal systems can power through hot, dry rock using advanced drilling and fracturing techniques.

Meanwhile, the newest closed-loop systems no longer require local underground water sources.

This is significant because new academic research suggests that we may have understated the potential of this technology in helping to boost electricity supply. In June, two engineers at Princeton University released a stunning paper describing the potential of the technology.

The report suggests that EGS could "supply up to 20% of the electricity in the United States by 2050." According to their analysis, the U.S. could build up to 250 GW of EGS capacity under current federal support.

At the same time, geothermal energy is getting cheaper without subsidies. Projects like Fervo's Utah project have demonstrated grid parity without government subsidies. Costs are now on par with coal and natural gas plants.

Further technological exploration will likely drive prices lower, attracting more investment from major technology players and manufacturing companies across the nation.

It has policy momentum. State governments are thrilled about the prospect of cheap, 24/7 electricity. The U.S. Department of Energy has also committed $1.36 billion to next-generation projects.

States like Colorado, Nevada, Utah, and North Dakota are emerging as development leaders with major policy announcements to reduce red tape and accelerate this energy revolution.

Amazon's Nagoya facility showcases Japan's commitment to geothermal innovation. This is a global trend. Meanwhile, the New Mexico project is the latest big win, showing how scalable this tech is.

We are seeing the birth of a sector that combines the reliability of traditional power with the sustainability of renewable energy.

What isn't to like on either side of the political aisle?

With massive untapped resources, breakthrough technologies, and unprecedented investment momentum, geothermal energy is the next great frontier in clean power generation.

Now is the time to act before this becomes one of the most widespread investment stories since the dawn of U.S. fracking.

Check out our full investigation of geothermal energy.