Everybody talking about AI, Nvidia, data centres, electricity demand.
But Muthu ask one simple question:
👉 Who makes the special steel inside the transformers?
Without transformer, no electricity.
Without electricity, no AI.
Without AI, all the AI stocks become PowerPoint presentation only.
The secret ingredient is called GOES (Grain-Oriented Electrical Steel).
Not ordinary steel hor.
This steel is cooked differently. During manufacturing, all the crystal grains line up neatly like Girl Guides during national day. Because of that, electricity can flow through with very little energy wasted as heat.
Problem?
Only a handful of companies in the world know how to make high-grade GOES.
The VIP club got only:
🇨🇳 Baowu
🇯🇵 Nippon Steel
🇰🇷 POSCO
🇩🇪 Thyssenkrupp
🇺🇸 Cleveland-Cliffs
Building a new GOES factory is not like opening another prata stall downstairs.
Need hundreds of millions of dollars.
Need specialised rolling equipment.
Need years of heat treatment know-how.
Need years of qualification before transformer makers can even use it.
Now the funny part.
America imports more than 80% of its large power transformers.
At the same time, America wants to build:
⚡ AI Data Centres
⚡ EV Infrastructure
⚡ Factories
⚡ Renewable Energy
⚡ Grid Upgrades
Everybody wants transformers.
But transformer lead times have exploded from around 2 years before COVID to as long as 3-5 years today.
Microsoft, Google and AWS are reportedly competing with utility companies just to secure transformer production slots.
Muthu says:
"Last time shortage was GPU. Tomorrow shortage may be transformer."
And inside every transformer sits GOES steel.
Now enter Cleveland-Cliffs (CLF).
CLF is the ONLY domestic producer of GOES in America.
Only one.
No real Number 2.
For years nobody cared because electrical steel was just a small business inside a big steel company.
But suddenly America wants local supply chains.
Now everybody looking at the same factory.
Three powerful tailwinds blowing behind CLF:
✅ AI data centres are being built mostly in America.
Several transformer manufacturers are opening new US plants around 2027-2028. They all need qualified GOES steel.
✅ Tariffs now protect domestic production.
Imported steel faces heavy tariffs and protection has been extended to transformer-core materials.
✅ Washington has classified transformers and electrical steel as strategic infrastructure.
That means government support, loans, procurement programs and funding can potentially flow into the supply chain.
And CLF not stopping there.
Instead of only selling steel, they are moving further down the food chain.
Their Weirton facility is being converted into a transformer manufacturing plant.
Meaning:
CLF can sell the flour...
or sell the prata.
Higher margins.
More control.
More strategic importance.
But Muthu must also be fair.
Today CLF is still mainly a steel company.
Electrical steel remains a small percentage of total sales.
The stock is not yet an AI infrastructure pure play.
That's why Wall Street still values CLF like a traditional steel producer.
But Muthu looking at it differently.
CLF is not an AI stock.
CLF is a steel company holding a hidden lottery ticket on America's AI power infrastructure.
When everybody fights over Nvidia chips...
Muthu quietly looking at the steel inside the transformer powering the data centre.
Sometimes the biggest bottleneck is the thing nobody is talking about.
A potential catalyst to watch is Cleveland-Cliffs' Q2 2026 earnings report, expected on Monday, July 20, 2026.
Investors will be listening closely for any updates on GOES (Grain-Oriented Electrical Steel) production, capacity expansion, customer demand, transformer-related orders, and progress at the Weirton transformer manufacturing facility.
With AI data centres, grid upgrades, and electrification projects driving transformer demand across the US, management's commentary could provide valuable clues on whether GOES is evolving from a niche business into a more meaningful growth driver for CLF.
Sometimes the most important part of the earnings call isn't the earnings — it's the guidance hidden between the lines. 👀⚡
🥞 End of Prata Stall Research Department.
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