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Daily Briefing

The Electricity Economy Is Having Its Moment

Behind both the Anthropic IPO and the Iran War negotiations sits the energy transition.

A Wall Street trader.
Heatmap Illustration/Getty Images

When you get down to it, two stories are dominating the American economy at the moment.

The first is the artificial intelligence boom. The second is the Iran war — and the wavering peace talks, and unprecedented energy transformation, that accompany it. Both stories advanced on Monday.

In the morning, the frontier AI lab Anthropic announced that it had confidentially filed with the Securities and Exchange Commission for an initial public offering, a widely anticipated step that could see its shares start trading as early as the fall.

The Iran news was perhaps less bullish. Iran announced this morning that it was suspending negotiations after it traded missile and bomb attacks with the United States through the weekend. Oil prices surged on the news before relaxing somewhat after President Trump personally intervened to keep Israel from bombing Lebanon. Trump claimed peace talks with Iran “are continuing, at a rapid pace.”

Still, oil ended the day higher than where it started. The global Brent crude benchmark rose more than 4.5% to over $95 per barrel. The American benchmark, WTI, rose more than 5% to around $92. While neither benchmark has reached its highs from earlier in the war, the episode seemed to remind investors that an oil crisis is still happening and that talks could fall apart at any time. The Strait of Hormuz remains (mostly) closed.

Taken together, the two stories suggest generally good news — or at least, that’s what investors thought. Most major U.S. stock indices crept up slightly through the day; the S&P 500 closed up a quarter of a percent. (It helped that Nvidia — whose head of sustainability I interviewed for Heatmap’s podcast, Shift Key, last week — also unveiled a new consumer laptop chip this morning, sending its shares surging.)

Viewed from another angle, though, you can see a common energy story in these updates. The Anthropic filing — taken together with last week’s news that “mind-blowing growth” is about to propel the lab behind the Claude AI assistant into its first profitable quarter — is a reminder that surging electricity demand is now a dependable part of our electricity system. Demand will in turn remain strong for anything that can help supply that electricity — solar panels, batteries, wind turbines, and (yes) natural gas paraphernalia.

Meanwhile, who knows what will happen in a week or two, but for now, the Iran-induced oil shortage has caused so much demand destruction in China — and seemed to encourage so much switching to electric vehicles — that it seems almost manageable. The commodity researchers at JP Morgan last week mused that the world may be learning to live with 9% less oil. It helps, of course, that China — and the rest of the world — is drawing down its strategic reserves; price action has remained muted in part because oil investors believe Trump is desperate for a deal. But if East Asia and Europe respond to the oil shortage by permanently deleting at least part of their oil demand, it will be by switching from oil and diesel-burning technologies to power-sipping EVs and batteries.

Behind both of the economy’s biggest stories, in other words, sits the great global transition to electricity.

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