Horizon Kinetics Q4 2025 Commentary

Group 1 - Texas Pacific Land Corp. (TPL) has entered into a strategic partnership with Bolt Data & Energy to develop large-scale data center campuses, contributing one-third of the $150 million capital raised for the project [3][4] - The data center campuses are expected to start with a capacity of 1 gigawatt (GW) and aim for a total capacity of 10 GW, with potential tenants including major tech companies like Google, Microsoft, and Amazon [4][5] - TPL's investment in this project positions it as a cornerstone investor in the AI data center market, highlighting the growing demand for AI processing capabilities [3][4] Group 2 - The Texas data center market is rapidly expanding, with several projects announced, including Project Matador by Fermi America with a planned capacity of 11 GW and Bolt's project with 10 GW [12] - Existing data centers are becoming technologically obsolete, creating additional demand for new facilities that can meet the evolving power and cooling requirements of advanced AI chips [13][16] - The rapid advancement in chip technology, particularly from NVIDIA, is driving the need for data centers that can handle increased power consumption and cooling demands [10][18] Group 3 - The water demand for data centers and power plants is significant, with a large-scale data center potentially requiring around 67 million barrels of water annually, which is more than the water needed for the associated power plant [92][93] - TPL's water resources are becoming increasingly valuable, with water revenues exceeding 35% of total revenues in 2024, reflecting a strong growth trajectory [101][104] - The company operates a capital-light business model, focusing on source water and saltwater disposal, which positions it favorably in the expanding data center ecosystem [102][104]