Nikola Tesla Gave Away His Cut... You Don't Have ToBy Joel Litman, chief investment officer, Altimetry
 The man who electrified the world died with almost nothing...
On January 7, 1943, Nikola Tesla was found dead in Room 3327 of the Hotel New Yorker in Manhattan. He was 86 years old. He'd spent the last decade of his life feeding pigeons in the park and working through equations in his head. He was also deep in debt. The rent on Tesla's room was paid for by the company that had made its fortune on his inventions... Westinghouse Electric. But it didn't have to end that way... Tesla once owned a piece of every motor in America...Back in 1888, Tesla was a 32-year-old immigrant with a stack of patents for a new kind of motor. It ran on alternating-current ("AC") power, which could travel much farther over wires than the direct-current ("DC") power sold by Thomas Edison. Industrialist George Westinghouse saw the potential right away. He bought Tesla's AC patents for $60,000 in cash and stock. And he agreed to pay Tesla a royalty of $2.50 for every horsepower of electrical capacity sold. Said another way, Tesla would get paid for every motor... every generator... and every power station his system was used for. In 1893, Westinghouse won the contract to light the Chicago World's Fair. President Grover Cleveland pushed a button, and 100,000 lamps lit up the fairgrounds on Tesla's system. Soon after, Westinghouse signed on to build a Tesla-designed power system at Niagara Falls. The whole country was about to be wired for Tesla's current. His royalty stood to become one of the most valuable income streams in America. But Westinghouse had a problem... The company had spent heavily to win public support. When its lenders refinanced its debts, they demanded cuts to what looked like excessive spending... including the per-horsepower royalty in Tesla's contract. If George Westinghouse didn't meet his lenders' demands, he could lose control of the company. And Tesla would be left chasing the bankers for his money. So Tesla let the royalty go. In his own telling, he tore up the contract on the spot. The records suggest a negotiated release, followed by an outright sale of the patents to Westinghouse for $216,000 a few years later. Either way, the result was the same. AC power went on to electrify the world. And the man who once owned a cut of every horsepower gave it away.
Tesla kept inventing for another half-century. But he never again held anything like that royalty. He spent his final years nearly broke, living in a hotel room paid for by someone else. Every great build-out has builders... and royalty holders...While a lot has changed since those days, not everything has. The builders still get the headlines in every great build-out. The royalty holders (or their equivalents) still keep a cut of every unit sold. We're living through the biggest power build-out since Tesla's time. And fittingly, it's being led by the man whose company carries Tesla's name... Elon Musk is spending trillions to break the power bottleneck... Musk's empire, especially SpaceX (SPCX), runs on electricity and computing power. His Colossus supercomputer data centers became the first to cross 1 gigawatt of power demand earlier this year... and are now on track to pass 1.5 gigawatts. That's the same amount of energy it would take to power roughly 660,000 American homes. All told, Musk is targeting as much as $2.4 trillion of spending to break through the power and computing-capacity bottleneck. And he has already started deploying the first $192 billion. Washington is behind him, too. President Donald Trump signed an executive order (No. 14318) to speed up federal permitting for data-center infrastructure. The Department of Justice stepped in to defend Colossus in court. And the Pentagon has handed SpaceX's Starshield division, its government and national-security business, billions of dollars in contracts. But the builders won't hand you the biggest gains...Tesla and SpaceX are already giants. Their stocks won't see the biggest upside from here. The better opportunity is to do what Nikola Tesla didn't... and keep a cut of the profits. That means owning the businesses that collect on every piece of this build-out, no matter who wins the race to complete it. These companies don't need to design the next supercomputer or launch the next rocket. They get paid every time someone else does... and many of them return that cash to shareholders in the form of dividends. Around our offices, we've been referring to these stocks as Elon's "Shadow Trust Fund" – because they work like one. The checks will keep arriving, month after month, for as long as the AI boom continues. You don't have to build or run anything in order to profit. If you had invested $10,000 in these stocks and let it compound, you would have made an average of $144,000 per year over the past two-plus decades. Now, a word of caution... The amount of income you collect depends entirely on how much you invest. These are growing businesses, not high-yield bonds. Most of them yield around 1% or less today. And no dividend is guaranteed. But these companies offer something better than a fixed coupon. Their dividends will grow as the build-out grows. Several of them have already raised their payouts this year. We've put together the full story on these companies, including what makes each one a "royalty holder" on Musk's build-out. Click here to learn how to claim your own cut of the Shadow Trust Fund. Regards, Joel Litman
October 15, 2026
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