White Paper: AI — an Electrification Story | Tema ETFs

The race to build AI infrastructure is colliding with the limits of the global power system. Over the past year, announcements of new AI data centers have accelerated at an unprecedented pace. Yet the infrastructure required to power this digital expansion faces a critical constraint: electricity.

Our white paper explores how AI is redefining global electrification, driving a structural cycle in power generation, grid modernization, and supporting technologies.

Key Takeaways

• The real bottleneck for AI isn’t chips – it’s power. 72% of industry executives cite a lack of electricity and grid as a key challenge to their AI data center plans¹.  
• Global data center capacity is expected to more than double within five years², driven by AI infrastructure, and OpenAI demands are even larger.  
• The AI buildout is now a core driver of electricity demand, with data centers share tripling in the next decade to 12% of all US consumption³. Overall power demand in the US is set to grow for the first time in decades rising 55% by 2040⁴.  
• This is leading to 40-80 Gigawatts (GW) projected supply shortages⁵ and putting immense strain on an aged grid. As a result, hyperscalers like Google and Microsoft, are in a race to secure power directly and validate technologies like nuclear.  
• The market is sending a clear signal of a need for trillions of electrification investment⁶. Electricity prices are rising, particularly near new data center locations, and future capacity auctions are setting record prices⁷.
• Electrification is bigger than just AI – it’s everything. The cycle is also powered by reshoring, electric vehicles, cryptocurrencies, and widespread conversion to electric power
• The investment megacycle spans the entire value chain. Beneficiaries range from utilities, power generators, grid operators, electrical equipment makers and technology firms. The trend can be accessed through the Tema Electrification ETF (VOLT).

Disclosures

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s prospectus or summary prospectus, which may be obtained by visiting www.temaetfs.com/volt

Read the prospectus carefully before investing.

Investing involves risk including possible loss of principal. There is no guarantee the adviser’s investment strategy will be successful.

Sector Focus Risk: The Fund may invest a significant portion of its assets in one or more sectors, including Industrials, Materials and Utilities, and thus will be more susceptible to the risks affecting those sectors than funds that have more diversified holdings across several sectors.

Electric companies require extensive investment in capital improvements and additions, including the construction of additional transmission and renewable generation facilities, modernizing existing infrastructure, installation of environmental upgrades and retrofits as well as other initiatives. Electric companies may provide services at rates approved by one or more regulatory commissions.

If these regulatory commissions do not approve adjustments to the rates charged, affected electric companies may not be able to recover the costs associated with their investments.  This could negatively impact profitability and impact the performance of the Fund.

In addition, many materials companies are significantly affected by the level and volatility of commodity prices, exchange rates, import controls, worldwide competition, environmental policies and consumer demand.

Investing in Foreign and emerging markets involves risks relating to political, economic, or regulatory conditions not associated with investments in U.S. securities and instruments. In addition, the fund is exposed to currency risk.