Meta just announced a US$13 billion AI data centre in Sturgeon County, Alberta, but the real investing story here isn’t Meta itself.
In this short video, Motley Fool Canada’s Nick Sciple and Iain Butler break down why Canadian energy and infrastructure companies could be the bigger winners from this buildout.
Prefer to read? There’s a transcript below.
Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is The Five Minute Major, here to make you a smarter investor in about five minutes. Today we’re discussing Meta‘s (NASDAQ: META) plan to spend more than $13 billion on its first AI data centre in Canada, up in Sturgeon County, Alberta.
And the reason we’re covering it is that the most interesting way to invest in this story might not be Meta at all. It might be Canadian energy companies. My guest today is Motley Fool Canada Chief Investment Advisor, Iain Butler. Iain, thanks for joining me once again.
Iain Butler: Great to be here, Nick. And that’s US$13 billion, right? So we’re talking, we’re talking real money.
Nick: That’s right, that’s right. Yeah, so the headline everybody’s reading is Meta developing its first AI data centre in Alberta. But the story you actually care about is who is selling the picks and shovels? Who is going to power this data centre and turn those lights on? So walk me through what’s getting built here and who are the potential winners.
Iain: Right. So yeah, you’ve hit it here. Everybody sees the Meta logo and sort of stops there. But as you say, I’m more interested as an investor. It’s going to be a small portion of Meta, but it could be very significant for some Canadian energy companies. So I mean, just considering the scale, it’s generally hard to wrap our heads around, not just this data centre site, but all of them. But this one specifically, it’s a 1 gigawatt facility on 1,750 acres. It’s going to draw close to what the entire city of Edmonton pulls off the grid.
And it’s Meta’s first data centre in Canada. And they said they’re going to cover the full electricity bill themselves, including all the new infrastructure, which is something that takes a big chunk of risk off the table, frankly.
The Canadian company that jumps out to me that stands to benefit is Pembina Pipeline (TSX:PPL). Meta finally confirmed it’s the customer behind the $4.6 billion green light gas plant, the Pembina and its partners are putting up. So what you’ve got is long-life energy infrastructure with a deep-pocketed customer locked in under contract. And that’s a lot more reliable than a bet on where natural gas prices, for instance, are headed.
Best part, though, is that this probably isn’t a one-off. Alberta’s been vocal about pitching cheap natural gas as the answer to AI’s power problem for a couple of years now, smartly nudging these developers to build their own power, as Meta is doing, rather than leaning on the provincial grid.
So ordinary customers, Alberta citizens, don’t end up eating higher bills or shakier infrastructure system.
Just to build on this: Pembina has its hat in the ring when it comes to infrastructure. I mentioned commodity prices — volatile — but a natural gas producer that we like very much, and if demand for natural gas increases, it should stand to benefit, is a company by the name of Tourmaline (TSX: TOU).
We’ll throw that one into the ring as well.
Nick: Right, so I think you mentioned the important part there. If this is a template for future projects instead of a one-off, what could this mean for the Canadian market over the long term? What are the things folks should be paying attention to as this continues to play out, this AI buildout, you know, probably going to be a decade-plus?
Iain: For sure, yeah. So this is one facility, but I think, again, with our long-term investing hats on, it’s really a signal for more to come. There have been something like 70 data centre proposals floated in Canada since 2024, and even if only a slice of those ever get built, that’s a real new source of demand for Canadian gas producers and the midstream companies like Pembina that move the stuff around, which means we’ve potentially got a secular tailwind that’s just beginning to blow. You’ve also got Canadian telecoms. Canadian telecom stocks have been beaten up pretty badly. But they’re quietly doing their own version of this, which people don’t always seem to connect. Bell (TSX: BCE) is building a 300 megawatt campus in Saskatchewan.
And TELUS (TSX: T) has two going up in Vancouver. So this runs straight through a couple companies that a lot of Canadians already own in their portfolios. Keep in mind, though, a caveat, “announced” and “built” are two very different things. So we’re dealing with large-scale projects, and truly only a handful of those 70 proposals have actually broken ground. So just keep an eye out for the boring stuff. Signed power agreements.
Regulators signing off and actual dirt getting moved, not just these splashy headline and press releases.
Nick: Yes, certainly a trend worth paying attention to. This is not the first video we’ve done on AI buildouts in Canada, and I think there will be more to come. So for investors looking to deploy capital next year, the year after that, and into the next decade, certainly worth looking for opportunities in the AI data centre buildout. And Alberta certainly looks, as Alberta and Saskatchewan in particular, look to be places where those are going to cluster in Canada.
All right, that’s all the time we have for this edition of The Five-Minute Major. Reminder, as always, if you want more stock ideas from us, you can click the icon in the upper right corner of your video screen. Thank you for spending your time with us today, and we hope to see you next time. Fool on!
