RiskHedge publisher Dan Steinhart and I just got back from an epic journey. We crisscrossed the country, hitting five major cities and meeting with 40 of the most brilliant minds working on groundbreaking tech.
We saw pint-sized nuclear reactors, satellites that harvest fuel from thin air, drones delivering boar semen to far-flung corners of Africa (no joke), and spacecraft returning from orbit with tiny payloads worth a fortune.
I don't embark on these grueling trips—logging tens of thousands of air miles and leaving my better half to wrangle our trio of kids solo—just for kicks. I do it because it lets me spot game-changing trends before they hit the mainstream, positioning us to cash in ahead of the pack.
Based on what I witnessed, I'm convinced one massively overlooked investment play is… the ocean.
During our whirlwind tour, we sat down with a half-dozen maritime outfits, including trailblazing defense tech firm Anduril. A lot of the juiciest prospects are still under wraps, but you can dive into some of them right now.
We just added an ocean disruptor to our Disruption_X portfolio. Today, I'm sharing the memo I fired off to Disruption_X members when we pulled the trigger.
The ocean is a multitrillion-dollar economy on the cusp of being unleashed. Invest accordingly.
My buddy and econ whiz Tyler Cowen digs framing stuff as "overrated" or "underrated."
I'm a huge fan of viewing investment plays through this "overrated, underrated" prism. It helps you spot hidden edges you can pounce on in markets, business, and life.
The ocean is a ridiculously underrated frontier right now.
You're reading this piece courtesy of the ocean. The "cloud" is really underwater. North of 95% of internet data—your emails, bank transfers, and ChatGPT queries—zips through a web of roughly 400 fiber-optic cables snaking along the seafloor.
Over 90% of your worldly goods—from the phone in your pocket to the kicks on your feet to the gas in your ride—got to you by sea.
Yet the ocean stays off our radar. Get this: We've mapped more of Mars than our own seabed. Upwards of 80% of the ocean is still uncharted!
For investors, ocean tech is like stumbling onto a whole new continent. A bona fide frontier and blue-world economy waiting to be built—with fresh plays spanning self-sailing ships, port security, and underwater data centers.
The drama in the Strait of Hormuz is making us all sit up and take notice of the ocean.
We erected the entire global economy on seas we can't truly lock down.
Some have floated the idea of battleships chaperoning cargo vessels to guarantee safe passage through the Strait. This won't cut it long-term. Even if you managed it for a bit, America doesn't have the fleet to sustain it.
Last year, America cranked out a measly five ships. China launched 1,794. A single Chinese shipyard now outproduces the whole US maritime sector combined.
The bigger issue: The ocean, even the 21-mile-wide Strait of Hormuz, is too vast for humans to police solo.
Colombian authorities recently nabbed a totally unmanned "narco-sub." Tricked out with a Starlink dish, it was built to shuttle 1.5 tons of blow over 800 miles. I'd wager for every drug boat busted, at least 10 slip through. There's just no way for human crews to patrol the sprawling ocean.
Nowadays, checking out an underwater pipeline or cable means ponying up for a colossal, crewed ship that runs $200,000 a day. No shock that "stuff" in the ocean only gets a once-over every year or two.
This will only worsen as the ocean economy balloons. And bad actors have already taken note.
Picture trying to snag a coffee, but the card reader goes kaput.
You try to ring your family to see what's up, and the line's dead.
This nightmare played out for 14,000 folks on the Matsu Islands near Taiwan. Chinese vessels sliced their subsea cables, plunging the island into a weeklong digital blackout.
The global lattice of underwater internet cables could stretch to the moon and back twice. They're sitting ducks. Taiwan has had its internet cables severed nearly 30 times in recent years. Data pipelines in the Baltic Sea have been cut, too.
America's tech titans—Meta Platforms Inc. (META:NASDAQ), Alphabet Inc. Class A (GOOGL:NASDAQ), Microsoft Corp. (MSFT:NASDAQ), and Amazon.com Inc. (AMZN:NASDAQ)—now bankroll over 70% of new underwater data cables.
Meta is currently laying the world's longest submarine cable. Project Waterworth will run 31,000 miles and cost $10 billion.
If you're going to drop billions on building the underwater backbone of the AI economy…
You're also going to shell out billions to safeguard it.
Throwing more warm bodies on boats isn't how you do this. The only way to scale is to make it self-driving. Put another way: the ocean has to police itself.
Ukraine has no navy but still runs the Black Sea with low-cost, self-driving hardware, including its "Sea Baby" drone boats. Ukraine has sunk or crippled a third of Russia's Black Sea Fleet and has driven the surviving ships into retreat.
Now imagine what unfolds as those vehicles get smarter, speedier, and stealthier.
The US Navy plans to have 130 crewless ships on the water this year. Inside of five years, I'd bet we'll see 100X—or even 1,000X—more.
The ocean is a trillion-dollar economy waiting for robots to unlock it. The high seas have been our biggest blind spot. And for disruption investors like us, blind spots spell opportunity.
Want to dig deeper into disruptive megatrends?
If my years of globetrotting to meet the folks building the future have taught me one thing, it's this: The fattest opportunities never look obvious at first blush.
They crop up in the spots most investors aren't clocking yet, like the ocean.
If you want to ride shotgun as I unearth more disruptive megatrends in real time, you can sign up for my free letter, The Jolt.
In it, I dish on what I'm seeing in the trenches, which ideas I'm tracking, and where I think the most lucrative plays are bubbling up next.
If you enjoyed this, make sure to sign up for the Jolt, Stephen McBride's twice-weekly investing letter-where innovation meets investing.
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