What T. Boone Pickens Would Ask About AI. Who owns the spending, and what is the plan?
Posted by freedomforall 6 days, 13 hours ago to Business
Excerpt:
"If he were still in the room this week, he would not be picking sides in a chatbot fight. He would start with the physical bill of materials that decides who can actually build AI.
Power first. Every incremental megawatt of AI load is an order for firm generation. New combined-cycle gas capacity for the post-2027 cohort is now running near $2,000 a kilowatt, roughly double the cost of earlier plants, with turbines on multi-year backorder. Existing, grid-connected gas plants have been changing hands near $1 million a megawatt, about half the cost of building new. In Boone’s language, it is getting cheaper to find megawatts on the floor of the exchange than in a turbine queue.
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Five questions T. Boone Pickens would ask AI companies today.
None of these are exotic. They are the questions a well-run family office puts to the operating businesses it owns, and most public boards have not yet put them to their own AI programs.
What is the total committed AI spend, including the pieces buried in IT, consulting, and cloud contracts?
Which line on the income statement is supposed to improve, by how much, and by when?
Whose compensation depends on that result?
What happens to the program if the target is missed by half?
How does the return compare with the simplest alternative, which is returning the capital to the owners?"
"If he were still in the room this week, he would not be picking sides in a chatbot fight. He would start with the physical bill of materials that decides who can actually build AI.
Power first. Every incremental megawatt of AI load is an order for firm generation. New combined-cycle gas capacity for the post-2027 cohort is now running near $2,000 a kilowatt, roughly double the cost of earlier plants, with turbines on multi-year backorder. Existing, grid-connected gas plants have been changing hands near $1 million a megawatt, about half the cost of building new. In Boone’s language, it is getting cheaper to find megawatts on the floor of the exchange than in a turbine queue.
...
Five questions T. Boone Pickens would ask AI companies today.
None of these are exotic. They are the questions a well-run family office puts to the operating businesses it owns, and most public boards have not yet put them to their own AI programs.
What is the total committed AI spend, including the pieces buried in IT, consulting, and cloud contracts?
Which line on the income statement is supposed to improve, by how much, and by when?
Whose compensation depends on that result?
What happens to the program if the target is missed by half?
How does the return compare with the simplest alternative, which is returning the capital to the owners?"
