AI Usage Surges, Power Becomes the Bottleneck.

I hope you had a good week! It’s that time again. We are sharing a few key data points shaping how we see the world right now. This week’s economic data came in firm, reinforcing our view that things remain relatively stable, despite the noise around trade, tariffs, and rates. Each of those factors is impacting markets in different ways, but the foundation is holding up.

We also just wrapped up our quarterly webcast with our investors, where we broke down:

• Where we are today

• Where we see opportunities

• What we’re excited about going forward

Long story short, we believe we’re nearing a transition. From mega caps dominating... to macro fears subsiding... to small/mid-caps and cyclicals getting their turn, especially as they now trade at a 45% discount to large caps, despite having faster earnings growth ahead.

📺 Check it out on our YouTube: @AvoryCo

This week we’re also covering new AI usage trends and what power demands tell us about the future of infrastructure. Some fascinating signals here.

Here is the summary if you want just that:

• 2.5 hours spent in this app.

• ChatGPT usage.

• Power needs is the bottleneck. 33 GW to…

Another week down, another reason to revisit the state of AI. One stat that stood out: users are now spending 152 minutes per day, that’s nearly 2.5 hours on the Character AI app.

That’s a massive amount of time. And it should be top of mind for any company whose business model hinges on engagement, especially in social, entertainment, and digital media.

When time spent shifts, so does the playing field.

For those unfamiliar, Character AI is an AI-powered chatbot app where users interact with AI-generated characters. And yes, people are spending 2.5 hours a day chatting with these bots.

Some use it to talk with AI therapists. Others are forming deeper, even emotional connections. As someone who values real human connection, this trend is both fascinating and unsettling.

On one hand, it’s a powerful tool that could support those in need of conversation, companionship, or mental health support. On the other, it raises big questions about what this means for society, connection, and identity over the coming decades. We’ve seen hints of this in gaming and online communities. But this feels like the next chapter.

Now back to the original question, what does this mean for social and entertainment?

Apptopia data shows that when Character AI is downloaded on devices that also have Netflix, time spent on Netflix actually declines. Take that how you will, Netflix is still performing well, but it’s definitely something to watch. When a new form of engagement captures attention at this scale, it starts to compete directly with legacy time-based platforms. The pie doesn't always grow, sometimes it's just sliced differently.

And this isn’t just about Character AI or social communication. Time spent in ChatGPT is also rising fast, jumping from roughly 9 minutes to 25 minutes per day. At a high level, there’s still plenty of room for this to push even higher. In 2024, virtually 0% of users were spending over 100 minutes a day. That’s now slowly creeping up. The behavior shift is clear: more people are not just testing AI, they’re integrating it into daily habits. And as utility grows, so will time spent.

Lastly, we got new estimate data on AI data center power demand, and it’s eye-opening. In 2024, AI data centers required about 33 GW of power. That number is expected to reach 176 GW in the coming years. So the real constraint? It’s not chips, it’s power. We recently recorded a podcast diving into this exact topic: Check out our IREN episode on YouTube (@AvoryCo).

This also explains why CoreWeave acquired Core Scientific, a move we’ve been anticipating for months, and a name we’ve consistently highlighted in this newsletter.

Have a great weekend and more to come next week!

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About Avory & Co.

Investing where the world is headed. 

Avory specializes in high-conviction equity strategies, emphasizing Secular Growth and Transformation Stories driven by exceptional teams. Data guides decisions. We cater to high net worth investors, family offices, and institutional investors. Note: This information doesn't constitute a recommendation to buy or sell any mentioned securities. Avory is based in Miami, Florida with clients all across the globe.

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Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.