BlackRock sees that the rapidly increasing demand for electricity is causing market fluctuations. AI is just one of the factors contributing to the growing global demand for electricity. Other factors contributing to the growth in electricity demand include: global income growth, reshoring of supply chains, industrial expansion, and building cooling. In the long term, there may be an increase in demand for nuclear energy and other low-carbon, on-demand energy sources. BlackRock is focusing on investment opportunities in power generation, electrical grid infrastructure, and the electrical equipment supply chain, and is optimistic about the utility and power production sectors, as well as exploring opportunities in the supply chain. In the United States, AI will be a core driving force behind the increasing demand for electricity, with its total demand expected to be large and continuing to grow. Fourth quarter 2024 corporate reports show that large technology companies promoting AI development will continue to invest capital in AI, even after news of DeepSeek. Some companies are even increasing capital expenditures from last year, with Meta, Amazon, Microsoft, and Alphabet expected to invest nearly $320 billion in AI capital expenditures this year, a 40% increase from 2024. AI development is also expected to drive electricity demand in other regions, as many governments are joining American companies in building AI. The $500 billion American "Stargate" project announced last week in Paris and the EU's 200 billion investment in AI are strong evidence of this. However, AI is just one of the factors contributing to the growing global demand for electricity. Other factors contributing to the growth in electricity demand include: global income growth, reshoring of supply chains, industrial expansion, and building cooling. Extreme high temperatures are driving the use of air conditioning, especially in emerging markets where air conditioning is not yet widespread. The electrification of buildings and vehicles is expanding, although to varying degrees in different regions. While electricity demand continues to increase, its supply is limited, which will eventually curb the upward momentum of electricity demand and increase inflationary pressures. Therefore, BlackRock believes it is necessary to increase exposure to stocks, infrastructure, and inflation-linked bonds to hedge against the effects of inflation. Furthermore, determining which types of power can meet the increasingly growing demand for electricity is crucial. Investments in energy transition are expected to further increase. Companies promoting AI development are favoring continuous, economically efficient, on-demand, and low-carbon electricity supply, but this is not easy. This may drive demand for natural gas and renewable energy in the United States. However, BlackRock believes that traditional energy sources will still play an important role, as policymakers seek affordable and reliable electricity while pursuing low-carbon goals.