March 25, 2025

By Daniel Silverberg, Head of Capstone’s Corporate Practice

Capstone was on the ground at CERAWeek—the world’s premier energy conference, a gathering of industry leaders, policymakers, and experts to discuss and shape the future of energy—in Houston earlier this month.  A few key themes emerged that epitomize the risks investors and companies face amidst Trump 2.0.  We believe some of these risks might signal business opportunities. Understanding when and how those developments will evolve is critical. Below are some of the key themes we observed.

Data Centers are the Big Buzz

Each year, CERAWeek centers around a central theme.  Last year’s principal focus was hydrogen energy. The year before it was the enactment of the Inflation Reduction Act. This year’s focus was all things data centers. Traditional oil and gas companies, utilities, and power generators (e.g., gas turbine companies) are eagerly assessing federal and state policies that will support demand for data center buildout. Counterbalancing this enthusiasm is a near-existential concern about regulatory uncertainty driven largely by tariffs and an indeterminate future of the IRA. Capstone continues to believe that key parts of the IRA driving data center growth remain durable, but we also believe that Trump’s support for tariffs remains solid and that stock market jitters, long thought to be an influence on Trump’s outlook, no longer serve as a restraint on President Trump as they did in Trump 1.0.   

Combating Chinese Influence Creates Opportunities (and Confusion)

The Trump administration will likely continue the Biden administration’s policy of pushing investment in global infrastructure to combat Chinese influence in Africa, Eastern Europe, and Latin America on everything from bridges to data centers. Capstone described this shift earlier, which involves moving money from USAID and traditional foreign assistance efforts to the Development Finance Corporation and Export-Import Bank to derisk investments in tough parts of the world.  We saw numerous indications over the last month of this shift, epitomized by the Trump administration’s announcement of support for liquefied natural gas (LNG) terminal construction in Mozambique despite human rights and safety concerns. 

US data center infrastructure providers, including IT companies and semiconductor chip manufacturers, might benefit from Trump’s infrastructure push.  However, the same conflict that beset the Biden administration between officials like Secretary Raimondo, who sought a forward-looking export policy on sensitive US data center technology, particularly to the UAE, and security-minded officials at the Pentagon who sought to restrict such exports, will likely manifest itself in the Trump administration (see Newsweek oped where Capstone’s national security team wrote on this issue last fall).  The practical result of this fight will likely be a slowdown in the administration’s readiness to enforce regulations moderating the export of data center technologies.

Japan is a Hot, Albeit Tough, Market to Navigate

We observed strong interest in Japan’s hydrogen market and considerable uncertainty around how the market will ultimately function. At the end of March, Japan will conclude its flagship contract-for-difference (CfD) scheme, which is designed to support hydrogen offtake. Backed by a ¥3 trillion (~$20 billion) budget and a 15-year incentivization period, the scheme is expected to support a maximum of four projects. However, more participants are expected to apply than can be accommodated, leaving many without support and looking ahead to a potential follow-up program. As of now, the government has neither committed to a second round of the CfD scheme nor allocated additional funding. We expect policymakers to closely evaluate the outcomes and proposals from the first round before deciding whether to proceed with further rounds or shift to a new incentive structure. Alternatives under consideration include stronger carbon pricing, allowing tariff pass-throughs for hydrogen offtake in the power sector, and a scaled-back support scheme. However, with no clear policy direction or financial commitment at this stage, making long-term investment decisions in Japan’s hydrogen sector remains highly challenging.

In a year defined by geopolitical flux and deepening policy uncertainty, Capstone will continue to track the global dynamics shaping investment risk and opportunity across the energy and infrastructure sectors. The signals we observed at CERAWeek underscore the complexity corporate and investor clients must navigate—particularly under the specter of a second Trump administration. As these developments unfold, Capstone remains committed to helping clients anticipate change, decode policy shifts, and identify areas where disruption may create strategic advantage.

---