In the latest episode of ETF spotlight, Matt Sallee, Head of Investments, Tortoise Capital highlights the overlooked companies fueling the AI boom.
00:00 Introduction
00:29 Brains vs. Body in Portfolios
01:19 Who Builds AI Infrastructure
01:57 Key AI Infrastructure Plays
03:28 Electricity as the New Oil
04:46 Energy’s Role in AI Growth
05:37 Why a Thematic ETF
07:00 Natural Gas vs. Nuclear
09:09 Risks to the AI Infrastructure Thesis
Transcript:
Caroline Woods:
We’ve heard about the brains of AI, the chips and the software, but the conversation is shifting toward the body—the massive infrastructure and power required to keep those brains alive. Joining us to break down the physical side of AI is Matt Sallee, Head of Investments at Tortoise Capital. Matt, thanks so much for being here at the desk.
Matt Sallee:
Thanks for having me, Caroline.
Caroline Woods:
As we think about portfolio construction in 2026, do we need both brains and body? We’re talking about the body, obviously, but do we need both in our portfolios?
Matt Sallee:
I think we need both. Most people already have the brains. If you own the S&P 500, you’re going to own plenty of Nvidia or other chipmakers. That’s why we differentiate with our fund and focus more on the body, as you describe it—which is funny, because that’s how we talk about it as well. This is the physical infrastructure required for AI to be delivered. If you think about servers and racks, the big factor is electricity. That’s the gating factor. It used to be chips—now it’s all about electricity, plus cooling and other physical infrastructure. That’s where we’re focused. When you hear about hyperscalers spending $400 billion, our portfolio holds the companies they’re spending that money with.
Caroline Woods:
Okay, so talk to us about what some of those companies actually are.
Matt Sallee:
Modine Manufacturing is one example. It’s a 100-plus-year-old company that used to make car radiators. They’ve pivoted their business over the years and are now focused on liquid cooling. That’s another big constraint—these chips run extremely hot and use a lot of electricity, which requires a lot of cooling. You can do direct air cooling, but liquid is becoming the preferred method, and that’s what Modine does.
Caroline Woods:
And you can get exposure to Modine through your Tortoise AI Infrastructure Energy Fund. What are some of your other biggest holdings?
Matt Sallee:
At TCI, our focus is infrastructure. Some of our biggest holdings include another liquid cooling name, Arista Networks—which handles networking and acts like traffic cops for data—and Dell Technologies. Dell has pivoted from being primarily a PC maker to building AI server racks. Despite a strong run in 2025, it still trades at a discounted valuation. We also have significant exposure to independent power producers. Electricity is the gating factor, and these companies are procuring energy as quickly as possible. One example is Vistra Energy, which recently made a $4 billion acquisition of gas plants totaling five gigawatts—enough to power New York City on an average day. These assets are in the PJM and ERCOT markets, two of the most attractive in the country. It’s all about speed to market, since building new power plants takes time.
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