Artificial Intelligence for Contractors in a VUCA World
2025 Utility Outlook Executive Summary
By Mark Bridgers, Pete Blonkvist and Kyle Kerestes
We made it safely through the election and it appears the inauguration will happen without much fanfare. Do not be fooled though…we are still in a VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) world and will likely live here for the next decade. We continue to experience a host of disruptions, including:
- Global Instability – Gaza/Israel/Iran/Lebanon/Yemen/Russia/Ukraine/North Korea Tensions – More VUCA
- Tariffs and Supply Chains – China/Mexico/Canada vs. US Onshoring – More VUCA
- Pesky Inflation Remains High – More VUCA
- Trump Political Landscape – More VUCA
- Extreme Weather Conditions – Heat Wave/Wildfire/Tornado/Ice Storm/Hurricanes – More VUCA
- Workforce & Supervision Availability – More VUCA
- Increased Environmental Regulations – More VUCA
- Unprecedented Federal Spending on Infrastructure – More VUCA
- State & Municipal Condition & Spending – More VUCA
While this list might seem daunting, it is Continuum’s view that the disruptions caused by Artificial Intelligence (AI) and Machine Learning (ML) will exceed all of those caused by this list. Fear…Concern…Adaptation…might come to mind. Opportunity is what Continuum sees. Why? Because the only true opportunity originates from volatility, not stability. In the following pages we shine a bright light on the opportunity we see!
What Is Artificial Intelligence
The concept of artificial intelligence began in the mid-1950s, when an English mathematician, Alan Turing, originated a theory that a computer program could interact with humans. Over the intervening years, computer scientists, engineers, mathematicians, and entrepreneurs developed algorithms and models that have accelerated human interaction with technology, bringing us to this precipice. Here are four terms that you need to know to better understand AI:
- Artificial Intelligence (AI): The capability of machines to mimic cognitive functions traditionally associated with the human mind, such as perceiving, reasoning, learning, and problem-solving.
- Natural-Language Generation (NLG): A software engine that creates seamless interaction between humans and technology by translating data observations into coherent prose.
- Machine Learning (ML): Systems that can learn and adapt from various types of input—whether from extensive historical data, synthesized datasets, or human feedback—enhancing their performance over time.
- Robotic Process Automation (RPA): AI-enabled robotics that can help automate and augment human tasks to improve efficiency and productivity.
We stand on the precipice of a large wave of privately funded, private equity/venture capital funded, and Federal/State funded infrastructure of all types over the next decade. This spending will strain the workforce, contractor capability, and supply chains to the point that adaptation will define whether defeat, simply survival or successful adaptation are achieved. Insightful leaders and managers will look for ways to get more from their assets and resources. Three ways to apply AI tools to augment, not displace, the utility construction workforce include:
- Production Increase (Output Expansion) – Solutions allow crews to raise production and perform more work, safely and in compliance with specifications, in a given time period – offset part of workforce availability constraints.
- Individual / Crew Augmentation (Capable Workforce Expansion) – Solutions increase the number of field staff or crews that can perform specific activities – larger number of people who can lift heavy equipment or materials, utilize complicated equipment, operate in confined space, etc.
- Accelerate Personal Performance (Average to Superior Performance) – Solutions allow individual crew managers and crew members, with limited or average experience, to perform at a superior level – shorten the “on-the-job” experience gain time period, accessing expertise, etc.
Continuum’s view on the future performance and AI tool application in each utility market segment is provided below.
Electric Transmission & Distribution
Undergrounding, Reliability, Resilience, Hardening, Electric Vehicles, Microgrids, Distributed Generation, Datacenters…all of which will create new work types and additional work in the electric T&D market (Exhibit 1). The sector is experiencing a significant increase in electricity demand, thought impossible only 5-7 years ago, due to domestic manufacturing, increasing personal demand for power, electrification expansion, electric vehicle use, and datacenter construction necessary to support AI applications, online streaming, and more broadly the internet of things.
Exhibit 1 – Electric T&D Construction Put in Place Historical Figures and Forecasts (Millions of current dollars)
Gas/Liquid Transmission & Distribution
The pipeline markets have faced significant headwinds since 2018 from environmental, social, permit, regulatory, and political pressure. The incoming Trump administration will mitigate, not eliminate, some of these pressures, but a return to the robust, long-haul, pipeline market of 2012-2013 and 2016-2017 is not within our current forecast timeline. The growth Continuum sees is in maintenance, integrity, intra-state laterals, short-segments replacement or installation, and station work. While not as glamorous as long-haul liquid or gas pipeline work, the gas distribution new and replacement activity will continue at a healthy growth rate, albeit at a slower pace (Exhibit 2).
Exhibit 2 – Gas/Liquid T&D Construction Put in Place Historical Figures and Forecasts (Millions of current dollars)
Broadband
The broadband sector is experiencing a short-term lull…what we call the calm before the storm when the injection of federal and state funding begins to take hold and translate into construction activity in 2025 and 2026. The spending growth will continue for 5-7 years across all 50 states (Exhibit 3). Key drivers of growth include:
- Streaming Demand: Growing home and business streaming demand for faster and more reliable virtual work and learning environments.
- Federal Funding: $80+ billion in Federal and State funding for rural broadband deployment through multiple programs including BEAD (Broadband Equity, Access, and Deployment).
- Datacenters: Accelerating demand for datacenter build-out from players like Amazon, Microsoft, and Google to process demand for AI, cloud services, the Internet of Things (IoT), for faster and more reliable networks.
- Communications Infrastructure Expansion: Communications capabilities embedded within transportation and other infrastructure.[1]
| Exhibit 3 – Broadband Construction Put in Place Historical Figures and Forecasts (Millions of current dollars) |
Water and Sewage & Waste Disposal
The U.S. water supply, sewage, and waste disposal markets and their aging infrastructure face urgent challenges and great opportunity for growth (Exhibit 4). There are trillions of gallons of water lost annually due to infrastructure failures,[2] $630 billion needed for water and sewer infrastructure,[3] and countless examples of aging, underperforming, and failing infrastructure. This market has largely digested the current cycle of federal and state funding infrastructure and while long term prospects will yield faster growth, we have entered a slower cycle as state/municipal budgets reset. Impactful trends include:
- Population Growth: The growing population in water-scarce regions (West and Southwest) is putting additional strain on urban and suburban infrastructure, intensifying the demand for water and wastewater treatment facilities.[4]
- Federal Funding: The rollout of funding from the Infrastructure Investment and Jobs Act (IIJA) which allocates $55 billion for water and wastewater infrastructure projects, including $1.4 billion specifically for stormwater infrastructure improvements.[5] In total, however, Federal funding for water and wastewater infrastructure has fallen from 63% in 1977 to 9% in 2017.[6]
- Massive Infrastructure Needs: The sector still faces a potential need of $630 billion for water and wastewater infrastructure upgrades and repairs over the next decade.[7]
- Forever Chemicals: Increasing presence of “forever chemicals” (per- and polyfluorinated substances, also known as PFAS) in wastewater and treated water where existing treatment systems and capability cannot remove them. An initial round of government initiatives and funding are targeting the removal of these harmful substances.[8]
| Exhibit 4 – Water Supply, Sewage and Waste Disposal Construction Put in Place Historical Figures and Forecasts (Millions of current dollars) |
Conclusion
The time to embrace change is now. The integration of artificial intelligence presents a great opportunity. It is Continuum’s view that in the coming decade, firms that embrace artificial intelligence (AI), machine learning (ML), and robotic innovations will define success. Opportunity abounds…can you see it!
Over the coming months, Continuum will profile 100 Artificial Intelligence (AI), Machine Learning (ML), and robotic innovations. Follow Continuum Capital on LinkedIn (www.linkedin.com/company/continuum-capital) for insight and application of these tools.
Mark Bridgers, Pete Blonkvist, and Kyle Kerestes are consultants with Continuum Capital, which provides management consulting, training, and investment banking services to the worldwide energy, utility, industrial, and infrastructure construction industry. They can be reached at (919) 345-0403 or MBridgers@ContinuumCapital.net and connected with on LinkedIn at www.linkedin.com/in/mark-bridgers-0819b412/ and X (formerly Twitter) at @MarkBridgers. For more information on Continuum, follow at www.linkedin.com/company/continuum-capital or visit www.ContinuumCapital.net.
[1] MAKE THE CONNECTION: The future impact of 6G communications technology on digital road infrastructure, Intertraffic, September 10, 2024.
[2] Center for Neighborhood Technology (CNT). (2013). The Case for Fixing the Leaks: Protecting People and Saving
Water while Supporting Economic Growth in the Great Lakes Region. Retrieved from http://www.cnt.org/sites/
default/files/publications/CNT_CaseforFixingtheLeaks.pdf
[3] U.S. EPA (2022) Clean Watersheds Needs Survey 2022-Report to Congress.
[4] Clayton, Freddie,, “The Southwest Offers Blueprints for the Future of Wastewater Reuse,” The Observatory, October 31, 2024.
[5] The White House, Fact Sheet: The Bipartisan Infrastructure Deal, November 06, 2021.
[6] American Society of Civil Engineer (2021) 2021 Infrastructure Report Card – Wastewater.
[7] U.S. EPA, Funding & Financing, Spotlight, “Achieving Clean Water Act Goals Requires $630 Billion+ Over Next 20 Years,” June 5, 2024.
[8] U.S. EPA (2020) “Emerging Contaminants and Federal Facility Contaminants of Concern.”
