Netflix and Shopify: Scaling in the AI-Powered Infrastructure Boom

The growth story for companies like Netflix and Shopify isn't just about their own platforms. It's embedded in a massive, secular shift in the underlying infrastructure of the digital economy. The catalyst is artificial intelligence, and its power hunger is creating an inflection moment for the entire U.S. power sector.

The scale of the coming demand is staggering. BloombergNEF's latest forecast projects that U.S. data center power demand will hit 106 gigawatts by 2035. That number is a 36% jump from just seven months prior, underscoring how quickly the outlook is accelerating. This isn't a slow climb; it's a surge driven by a new generation of massive facilities, with nearly a quarter of the 150 major projects added in the past year exceeding 500 megawatts in size.

The fundamental infrastructure gap is even more striking. Today, data centers consume about 3-4% of total U.S. power. By 2030, that share is expected to balloon to 11-12%. In other words, the power needs of data centers are projected to grow to about three times higher than current capacity by the end of the decade. This isn't a niche trend. It's a systemic shift that will rewire the nation's energy landscape.

For investors, this sets the stage. The ability to deliver reliable, scalable power to these new data centers is becoming the critical bottleneck for all digital services. As BloombergNEF notes, this boom is colliding with grid realities, creating a clear inflection point where the desire to accommodate AI-driven load meets the hard constraints of power supply. The companies that can bridge this gap-whether through power generation, grid modernization, or enabling technologies-will be the essential enablers for the AI-powered growth of Netflix, Shopify, and countless other digital businesses.

Netflix: Streaming Infrastructure and Content Scalability

Netflix's growth story is inextricably linked to the very infrastructure boom discussed earlier. Its streaming service is a direct, massive consumer of the expanding data center and power capacity. As the company scales its user base and content library, it requires ever-greater computational power and storage-resources housed in the data centers that are now the critical bottleneck for the entire digital economy. The scalability of Netflix's total addressable market, therefore, hinges on the availability of this underlying power. Without sufficient grid capacity and data center build-out, the company's ability to deliver high-quality streaming to new subscribers globally faces a hard physical constraint.

To capture a larger share of that global market, Netflix is aggressively expanding its monetization and content supply. Its rollout of an ad-tier service is a strategic move to attract price-sensitive users and increase revenue per household. Simultaneously, the proposed acquisition of Warner Bros. Discovery aims to massively bolster its content library, providing a steady stream of new shows and movies to drive subscriber growth. This playbook-using data to license or create content, then monetizing it through multiple tiers-is a proven engine for scaling. Yet, this expansion faces a headwind: the market for streaming is becoming saturated. In the U.S., Netflix still commands only a "tiny fraction of television viewing time," indicating room for growth, but the pace of subscriber gains is likely to slow as the pool of new users shrinks. The company must now compete more fiercely for existing viewers.

The key to sustaining high growth rates, then, is not just adding more subscribers, but deepening engagement and monetization within its existing base. Its push into sports is a bet on capturing more viewing time from a niche audience, which could lead to higher revenue and more valuable user data. The bottom line is that Netflix's scalability depends on two parallel tracks: its ability to scale within the physical limits of the power grid, and its ability to innovate its content and pricing models to extract more value from a maturing market. For a growth investor, the question is whether its ecosystem advantages and strategic moves can outpace both infrastructure constraints and market saturation.

Shopify: Platform Growth in a Digitalized Economy

Shopify's growth trajectory is a classic story of platform scaling within a digital infrastructure boom. Its core business-providing the tools for merchants to build online stores-has matured into a high-margin, sticky ecosystem. The company's strategic pivot to focus on its core e-commerce offerings has paid off, driving strong revenue growth and improving profitability. More importantly, its expansion into merchant services like payment processing and financing is key to capturing a larger share of the global e-commerce transaction value. These services are not just add-ons; they are the high-margin infrastructure that deepens merchant relationships and locks them into the platform, creating a powerful economic moat.

This moat is built on high switching costs. Once a merchant integrates Shopify's suite of tools for payments, inventory, and marketing, the operational friction of migrating to another platform becomes a significant barrier. This stickiness provides a foundation for sustained revenue expansion as retail continues its digital transformation. The total addressable market remains vast. Even in the U.S., online retail transactions account for less than 20% of the total transactions, a figure that has increased significantly but still leaves a massive runway for growth. Shopify is positioned to capture a larger slice of that expanding pie.

The scalability of its model depends on two converging trends. First, the ongoing digitalization of retail, which is accelerating the shift from physical to online channels. Second, the ability to monetize a larger share of each transaction through its expanding services. This setup is being turbocharged by AI-driven consumer behavior, which is reshaping how people discover and purchase goods. As AI personalizes shopping experiences and powers new marketing tools, platforms like Shopify that integrate these capabilities will be essential enablers for merchants. For a growth investor, Shopify represents a bet on the enduring shift to digital commerce, with a business model designed to scale efficiently and capture more value at each stage of the transaction.

Catalysts, Risks, and What to Watch

For Netflix and Shopify, the AI infrastructure boom provides a powerful tailwind. But the real test is whether they can successfully scale their own models within this new reality. The catalysts are clear, but so are the risks, and investors must watch specific metrics to gauge progress.

The primary growth catalyst for both companies is the successful integration of new monetization streams into their core revenue models. For Netflix, this means the ad-tier service must rapidly scale beyond its current niche to become a significant, high-margin contributor. Its proposed acquisition of Warner Bros. Discovery is a massive bet to fuel this, providing a vast content library to attract more users and advertisers. For Shopify, the catalyst is the expansion of its merchant services-payment processing, financing, and marketing tools-into a larger share of each transaction. This is the engine that drives higher margins and deeper ecosystem lock-in. Both companies have proven strategies, but the next phase of growth depends on executing these monetization plays at scale.

A major risk, however, is market saturation in their core user bases. Netflix still commands only a "tiny fraction of television viewing time," but the pool of new U.S. streaming subscribers is shrinking. Shopify's U.S. e-commerce penetration, while low at less than 20%, is rising, and the pace of new merchant sign-ups may slow. If growth in new users stalls, both companies could be forced to shift toward a model focused on higher margins from existing customers rather than rapid top-line expansion. This would be a lower-growth, higher-profit path, which may not satisfy the expectations of a growth investor seeking the double-digit CAGR needed to double capital in six years.

What investors should watch is the quarterly evidence of this dynamic. For Netflix, monitor the ad-tier subscriber growth rate and its contribution to overall revenue. For Shopify, track the revenue mix shift toward its higher-margin services and the pace of new merchant transactions. Both companies must show that their monetization efficiency is improving even as they compete for a finite pool of users or transactions. At the same time, keep an eye on the broader infrastructure landscape. Any signs of severe power or data center bottlenecks that could impact service reliability or expansion plans would be a material risk to their scaling ambitions. The bottom line is that the macro tailwind is real, but the companies must prove they can convert it into sustainable, high-quality growth.