The Case for Exiting Offshore Energy and Shifting to High-Potential AI Investments

The global investment landscape is undergoing a seismic shift, driven by divergent trajectories in the offshore energy and artificial intelligence (AI) sectors. As macroeconomic pressures reshape capital allocation priorities, investors must confront a stark reality: the offshore energy sector, long a cornerstone of energy infrastructure, is increasingly mispriced relative to its high-growth AI counterpart. This reallocation is not merely speculative-it is a response to cyclical performance trends, valuation disparities, and the accelerating digitization of energy systems.

Valuation Mispricing: A Tale of Two Sectors

The valuation gap between offshore energy and AI is striking. As of Q1 2025, private offshore energy companies traded at EV/EBITDA multiples of 5.4x for upstream operations and 6.5x for midstream operations, reflecting a market constrained by capital intensity and revenue predictability. In contrast, the IT sector commanded a median EV/EBITDA of 13.2x, while the Software (System & Application) subsector reached 27.98x. These multiples underscore investor confidence in AI's recurring revenue models, scalability, and low capital expenditures.

The Environmental & Clean Energy industry, which includes offshore energy, saw EBITDA multiples range from 2.2x to 6.8x in 2025, with higher valuations reserved for firms with strong growth and recurring revenue. By comparison, B2B SaaS companies leveraging AI achieved multiples as high as 8.1x. This disparity highlights a fundamental mismatch: offshore energy's cyclical earnings and exposure to commodity price swings make it a less attractive bet than AI's structural growth potential.

Cyclical Performance: Resilience vs. Volatility

From 2020 to 2025, offshore energy faced headwinds that eroded its competitive edge. The sector grappled with pandemic-driven supply chain disruptions, geopolitical tensions (e.g., the Russia-Ukraine war), and policy shifts favoring renewables. Upstream oil spending declined by 6% in 2025 due to lower demand expectations according to Deloitte, while offshore wind projects in the U.S. faced delays and cost overruns as reported by IndustryArc. Even as EBITDA margins for offshore energy firms like DEME Group improved to 21.9% in H1 2025, these gains were offset by broader sectoral underperformance.

Meanwhile, AI emerged as a linchpin of energy demand and productivity. The sector's growth fueled a surge in data center activity, which in turn drove utilities to invest in grid modernization. By 2026, oil and gas companies planned to allocate over 50% of their IT budgets to AI and generative AI, up from less than 20% in 2025. This symbiosis-where AI both consumes and optimizes energy-positions it as a dual beneficiary of the transition to clean energy.

Capital Reallocation: A Strategic Imperative

The reallocation of capital from offshore energy to AI is accelerating. Global AI spending is projected to reach $5-8 trillion by 2030, with the U.S. accounting for a disproportionate share. This influx of capital has already begun reshaping markets: AI's contribution to U.S. economic growth hit three times the historical average in 2025. Conversely, offshore energy investments have stagnated. The U.S. renewables sector, now a "buyer's market," sees distressed assets traded at depressed valuations due to policy uncertainty and tax credit expirations according to Ion Analytics.

Macroeconomic pressures further amplify this trend. While AI's energy demands could strain infrastructure (e.g., data centers consuming 15-20% of U.S. electricity by 2030), the sector's productivity gains and recurring revenue streams justify its premium valuations. Offshore energy, meanwhile, faces margin compression from falling oil prices, supply chain bottlenecks, and regulatory headwinds as Deloitte reports.

Conclusion: Rebalancing for the Future

For investors, the calculus is clear. Offshore energy's low valuation multiples and cyclical volatility make it a defensive, not a growth, asset. AI, by contrast, offers a compelling combination of high-growth potential, structural demand, and operational efficiency. The strategic reallocation of capital from offshore energy to AI is not a short-term trade-it is a long-term bet on the digitization of energy systems and the productivity revolution enabled by artificial intelligence.

As the IEA notes, global energy investment reached $3.3 trillion in 2025, with clean energy claiming a growing share. Investors who fail to align their portfolios with this shift risk being left behind in a world where AI is not just a disruptor but a foundational pillar of economic growth.