Morning Analysis — 2026-06-23

Dek

The tankers are sailing again through Hormuz — but the trade that pays this year is the quiet minerals war no one is filming.

The Big Shift

Texas grid operator ERCOT disclosed a 438 GW queue of large new power users — nearly 90% of it data centers — and approved its first "Batch Zero" process to start clearing them (¹). For scale, 438 GW is more than half of all US generating capacity wanting to plug into one state. Paired with an IEEE finding that the US uses only half its existing grid yet will still fall short of demand (²), this is the cleanest confirmation yet that getting power — not chips or capital — is the binding constraint on AI buildout. It points to a widening gap between announced compute and deliverable electrons, which keeps on-site "firm power" (generation a data center builds for itself, bypassing the grid queue) a real market.

Analysis

Start with what's calming down. Oil is normalizing fast after the US–Iran ceasefire: more tankers are crossing Hormuz with their tracking signals openly on (³), and North Sea crude is weakening as Middle East barrels flood back into Europe (⁴). The headline energy-shock risk is draining out of the tape. That matters because it clears the noise and exposes the slower, structural fight underneath — and that fight is over materials, not oil.

That fight is US–China decoupling on critical minerals. Beijing's blacklisting of MP Materials and USA Rare Earth — the two firms central to building a Western rare-earth supply chain — is now confirmed across multiple outlets (⁵), and US sanctions just idled Canada's only cobalt refinery (⁶). The implication for the MP thesis is two-sided: export controls keep Western pricing urgency high (the bull case), but they also choke MP's own China-linked sales (the offset). Net, this is the durable trade — it doesn't resolve in a news cycle the way an oil spike does, and it's where conviction will be earned or lost over months, not days.

On the battery and lithium side, China is quietly de-risking its own supply chain. CATL is scaling sodium-ion cells to dodge lithium price swings (⁷), and a teardown found a Chinese sodium-ion cell now matches Tesla on build quality (⁸). Meanwhile lithium itself slid ~10% on speculation CATL will restart a big mine (⁹). The implication: lithium-price tightness is not a reliable one-way bet, and a credible sodium-ion alternative caps the long-run squeeze that several materials theses lean on.

Compute demand keeps validating the power thesis from the other end. SpaceX's Colossus 2 will take $150M/month from Reflection AI for GB300 chips (¹⁰), and Microsoft is planning a 2GW campus in Pecos, Texas with Chevron supplying the energy (¹¹). The pattern — hyperscalers signing power deals directly with energy suppliers — is exactly the grid-bypass behavior the bottleneck thesis predicts. Demand isn't the question; deliverable power is.

The one thread pointing the other way is local pushback. Forty mayors — including Phoenix, London, and Melbourne — signed a pact to curb data centers' grid and water strain (¹²), echoing the Urbana, Ohio moratorium that just drew a billion-dollar lawsuit (¹³). For now this is soft — a voluntary pact, not regulation — so it doesn't move the demand names yet. But it's the residual to watch: if "build anywhere" turns into "build only where allowed," the demand curve the whole desk is long gets a real ceiling.

What Would Prove Us Wrong

• Own-the-Bottleneck / BE: If ERCOT's "Batch Zero" actually clears interconnections at speed — say, a public timeline that drains a meaningful slice of the 438 GW queue within 12–18 months — the grid-bypass premise erodes. Watch the first Batch Zero approvals and how many gigawatts they energize.
• MP / materials theses: A US–China minerals de-escalation (MP/USA Rare Earth removed from the blacklist, or a tariff/export-control rollback) would gut the Western-pricing-urgency case. Equally, a confirmed CATL mine restart driving another leg down in lithium would undercut the supply-scarcity trade.
• Data-center demand (the long book): The mayors' pact hardening into actual permitting moratoria — measured in cancelled or stalled gigawatts, not press releases — would put a real ceiling on the demand curve. Track whether Phoenix or any signatory converts the pledge into a binding ordinance.

Thesis Impact

Own-the-Bottleneck | Conviction: HOLD | Surprise: MED | Texas ERCOT discloses a 438 GW large-load interconnection queue (~90% data centers) and approves its first "Batch Zero" process; separately, IEEE reports the US is using only half its grid capacity yet still set to fall short of new demand. Both are NEW, concrete confirmations that power/interconnection is the binding constraint — CONFIRMS the core thesis. Already priced at P=0.81, so no move, but it's the cleanest demand-side data point of the morning. | ¹

BE | Conviction: HOLD | Surprise: MED | Same 438 GW Texas queue directly validates BE's grid-bypass premise — the interconnection queue can't deliver, so on-site firm power has a market. CONFIRMS pillar 1. Mild offset: ERCOT building a working large-load process is a step toward *clearing* the queue, the residual that would erode the bypass case over time. Net confirm, no conviction change. | ¹

MP | Conviction: HOLD | Surprise: LOW | China's blacklisting of MP Materials / USA Rare Earth is now recurring (multiple outlets, day 2+). CONFIRMS pillar 3 (export controls sustain Western pricing urgency) but already in the prior, and it cuts both ways — it also threatens MP's China-linked sales. No new information; stays at P=0.26. | ⁵

Watch (no move yet): a NEW disconfirming-direction thread is building against data-center demand — 40 major-city mayors (incl. Phoenix, London, Melbourne) signed a pact to curb data-center grid/water impact (¹²), alongside the Urbana moratorium lawsuit and Mississippi suit. Soft (a pact, not regulation) and T2, so it doesn't move VRT/ETN/Own-the-Bottleneck yet, but it's the local-opposition residual to track for the data-center-demand names.

Inflection Radar

[emergent] AI Planning Theory | Expected Free Energy planning frameworks suggest a shift in agent design toward explicit information-gathering costs, moving beyond simple goal optimization. | Touches: NEW | ¹⁴

[emergent] Humanoid Safety & Risk | Research is formalizing machine risk perception by integrating trust calibration and precursor estimation, signaling a necessary industry pivot toward safety-by-design for physical AI deployment. | Touches: NEW | ¹⁵

[emergent] Gov AI Procurement | DIA's consideration of an AI platform to streamline procurement indicates the federal government is moving beyond simple digital record-keeping toward automating complex, manual back-office workflows. | Touches: NEW | ¹⁶

[emergent] AI for Grid Forecasting | New hybrid transformer frameworks are applying advanced ML to short-term electricity demand forecasting, linking AI advancements directly to critical energy infrastructure planning. | Touches: NEW | ¹⁷

[emergent] Energy Regulatory Pressure | FERC's ongoing focus on data center interconnection rules signals impending regulatory constraints that will dictate future compute capacity build-out and potentially favor specific regional players. | Touches: NEW | ¹⁸

***

Summary & Focus:

The periphery signals today are heavily weighted toward the intersection of Regulation (FERC, DIA) and Physical Embodiment (Humanoids). The market is moving from general AI hype to specific, regulated deployments where safety protocols and infrastructure bottlenecks become the primary constraints.

Watch Today:

1. Regulatory Compliance: Monitor FERC's next moves on data center interconnection; this is a hard constraint for compute capacity scaling.

2. Physical AI Safety: The focus on risk perception ¹⁵ suggests that deployment success will hinge less on raw model power and more on verifiable, safe physical interaction.

3. GovTech Adoption: DIA's interest in automating procurement is a strong indicator of where large government budgets are targeting efficiency gains.

QA & Caveats

No issues found.

Sources

1. Texas, facing 438 GW queue, approves initial large-load interconnection process utilitydive.com
2. Why the U.S. Uses Only Half of Its Grid Capacity spectrum.ieee.org
3. Hormuz Traffic Picks Up as More Tankers Broadcast Crossings bloomberg.com
4. North Sea Crude Weakens as Mideast Oil Floods Back to Market bloomberg.com
5. China blacklists MP Materials, USA Rare Earth in critical minerals war mining.com
6. US sanctions shut Canada’s only cobalt refinery mining.com
7. scmp.com scmp.com
8. Chinese sodium-ion battery matches Tesla on build quality, teardown finds electrek.co
9. China lithium price slides on speculation over CATL mine restart mining.com
10. SpaceX inks compute deal with Reflection AI, an open source AI lab techcrunch.com
11. Microsoft plans 2GW data center campus in Pecos, Texas datacenterdynamics.com
12. Mayors of 40 of the world's biggest cities sign pact to mitigate impact of data centers on grid and water infrastructure datacenterdynamics.com
13. Thor Equities files lawsuit against Ohio's Urbana after data center moratorium disrupts project datacenterdynamics.com
14. Expected Free Energy-based Planning as Variational Inference arxiv.org
15. Toward Machine Risk Perception: Integrating Trust Calibration and Precursor-Based Risk Estimation for Humanoid arxiv.org
16. DIA considering new AI-powered platform to streamline procurement system defensescoop.com
17. Short-Term Electricity Demand Forecasting for New England Using a Hybrid Transformer-XGBoost Framework with Weather, Cal arxiv.org
18. 6 takeaways from FERC’s data center interconnection decision utilitydive.com