Billionaire investor Mario Gabelli, Chairman and CEO of GAMCO Investors, recently offered a compelling perspective on the artificial intelligence boom, framing it not as a speculative bubble, but as a foundational revolution akin to the invention of the printing press. In a recent interview on CNBC's 'Closing Bell Overtime' with Morgan Brennan and Jon Fortt, Gabelli shared his insights on the broader market landscape, the impact of tariffs, and the ongoing government shutdown, but his most incisive commentary centered on the long-term implications of AI and where savvy investors should position themselves. Rather than chasing the direct beneficiaries of AI's software layer, Gabelli advocates for investing in the underlying infrastructure that fuels this technological transformation.
Gabelli's outlook on the market, while acknowledging short-term volatility driven by factors like trade disputes and political gridlock, remains rooted in a long-term belief in economic resilience. He dismissed the daily market fluctuations as "fluffing around," emphasizing that fundamental economic growth, particularly in the U.S., remains robust. This macro stability, in his view, provides a fertile ground for truly disruptive technologies to take root and reshape industries. His historical analogy for AI is particularly striking: "AI is creating a revolution along the same lines [as Gutenberg]," he asserted, drawing a parallel to the transformative power of the printing press that fundamentally altered information dissemination and societal development. This perspective suggests that while there will undoubtedly be winners and losers, the overall impact of AI will be a profound reordering of economic and social structures, creating immense value for those who can identify the foundational shifts.
For investors navigating this new frontier, Gabelli’s strategy diverges from the conventional wisdom of targeting direct AI software or chipmakers. Instead, he points to the critical, often overlooked, infrastructure necessary to power the massive computational demands of AI. His specific recommendation, National Fuel Gas (NFG), a Buffalo-based utility, might seem counterintuitive at first glance for an AI play. However, Gabelli's reasoning is clear: "I want everyone here to buy one share of National Fuel and Gas... they have the natural reserves of nat gas." This insight highlights the increasing energy requirements of data centers, which are the physical engines of the AI revolution. As AI models grow in complexity and scale, the demand for reliable, affordable power sources will escalate dramatically. National Fuel Gas, with its extensive acreage in the Marcellus and Utica shales, possesses significant natural gas reserves, positioning it as a fundamental supplier to this burgeoning energy appetite. The company's vertically integrated model, encompassing exploration, production, gathering, transmission, and distribution, provides a robust, diversified revenue stream, making it a "picks and shovels" play for the AI era. They are not directly building AI, but they are providing the essential fuel for those who are.
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The conversation also touched upon the broader societal implications of AI, including concerns about job displacement and economic inequality. Gabelli, however, offered a pragmatic and enduring perspective rooted in evolutionary theory. He quoted Darwin, stating, "it's not the strongest that survive, it's not the smartest, it's the ones that are also most flexible." This is a profound insight for founders and professionals in the AI space. It underscores that while AI will undoubtedly automate many tasks and transform industries, human adaptability and the capacity to evolve alongside technology will be paramount. The challenge for individuals and organizations alike will be to cultivate flexibility, continuously learn, and pivot to new opportunities created by AI, rather than resisting the inevitable tide of change.
Gabelli’s commentary suggests that the true long-term value in the AI boom may not solely reside in the flashy front-end applications or the most advanced chip designs, but in the less glamorous, yet indispensable, components of its infrastructure. Companies providing the raw materials, the energy, and the physical backbone for AI are poised to see sustained demand. This "unrelated" investment, as Gabelli playfully terms it, represents a strategic move to capture value from the underlying, non-speculative growth driven by AI's insatiable hunger for processing power. For those building and investing in the AI ecosystem, understanding these foundational dependencies is key to long-term success.
