Episode summary
Rocks, Lime, Concrete & Steel: Investing in AI Data Center Building Blocks | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 7 min · Hosts: Carol Massar, Emily Graffeo · Guests: Kathryn Thompson
Summary
The discussion focused on the less obvious winners from the AI data center buildout: not just chips, but the industrial inputs needed to pour foundations, stabilize soil, move water, and erect the structures themselves. Kathryn Thompson said the spending wave tied to AI could eclipse the total spend of the interstate buildout, electrification, and the early railroads, underscoring how large the opportunity may be for construction-linked businesses.
Thompson said the supply picture varies by region, with access to land, cement, and rock becoming a real advantage in places like Texas, the biggest U.S. cement producer. She added that cement could get tight if residential construction rebounds, though conditions otherwise look manageable for now. The host highlighted CMC, noting the stock is down about 5% and that the company has evolved beyond steel into construction solutions for data center and semiconductor projects.
Thompson also pointed to Worthington Enterprises and Martin Marietta Materials as names that could benefit from the buildout. Her view was that investors may want to look beyond the most visible AI winners and toward the basic materials and industrial suppliers enabling the physical expansion.
Key takeaways
- Kathryn Thompson said AI data center construction could exceed the total spend of the interstate buildout, electrification, and early railroads.
- Thompson argued that lime, cement, rock, rebar, and steel are critical inputs before any data center rack is installed.
- She said Texas has a supply advantage because it is the biggest producer of cement in the U.S.
- Thompson viewed CMC, Worthington Enterprises, and Martin Marietta Materials as attractive ways to play the buildout.
- She said cement could get tight if residential construction recovers, even if supply looks adequate now.
Notable quotes
“you have to actually stabilize the soil. And so you have no one thinks about lime. Uh but that is you can't even put a foundation on unless you have the soil stabilized”
“having access to land and having access to cement and rock is so basic. Texas is the biggest producer of cement in the US”
“they're really done a really interesting um uh transformation of their company where they're looking at setting up the early stage of construction solutions”
“I think CMC is a good one. um Worththington Enterprises, you know, they've had a variety of different companies specific headwinds”
How the episode opens
Bloomberg Audio Studios podcasts, radio news. — You're listening to Bloomberg Business Week with Carol Masser and Tim Stenc on Bloomberg Radio.
Hey, listen. We've talked a lot about the AI build, a roughly $1 trillion wave of capital spending time tied to artificial intelligence going on overall. In June, Bloomberg reported spending on data center construction in the US eclipsed 50 billion in April for the first time according to Census Bureau figures that were uh published at the time.
Someone who is seeing this and watching it from a different perspective because it's not just about semiconductors, although that is a big part, but also things like lime, potach, se uh cement, steel, lots of different things. Back with us to talk about it is Katherine Thompson, founding partner and CEO at Thompson Research Group. It's an equity research and advisory firm that focuses on companies in the industrial and construction uh spaces spaces.
She's with us from Nashville. So good to have you here. Thanks for your patience.
A lot coming at us today as we
As is always the case. Tell us about the build and the things beyond semiconductors and the typical technological components that go into data centers. But that what you are focusing on that are needed as well for this buildout.
Yeah. So, you know, for since the end of World War II, a lot of the focus has been on the consumer leading the economy, but we're having a total flip-flop with this now, and it's uh re-industrialization, which you and I have talked about, but obviously this data center build. So, you're seeing a lot of really sleepy old world type industries, a few that you mentioned.
Um but to put this into perspective for size the buildout for data center and AI will eclipse the total spend of interstate buildout electrification US and the early buildout of rails.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai data centers
- materials supply chain
- construction costs
- infrastructure investment
- data center building blocks
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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