The Nichole Wischoff Podcast
00:23:12 · Alan Chang, Nichole Wischoff
[00:23:12] S1: Exactly right. So right now, we have a closed beta where we have a couple thousand people on beta. And we're already seeing some results in energy being shifted. But yeah, that's the idea. We will also scale the energy network as we expand to more international markets. [00:23:33] S0: Yeah. On the... Maybe a naive question, just let me... Like, just educate me. So right now, and I know this more from sort of, like, the data center scaling and needing, obviously, like, these need to be, like, 100 megawatt to 500 megawatt projects. Getting the power for that has been really, really hard. Some people think there's still... There's some... I think 15% of the grid in The US is still idle, you could try and find it. But in a lot of cases, folks are just defaulting to nat gas. So, like, Elon's doing that in Memphis. And then, obviously, renewables need to be a part of the future. Do you think it's the case that we'll get to that place? Like, are you guys only focused on, you know, like, the solar and you got the turbines and all of that? Like, what... Do... Is there a world where you're... Like, I feel like it's just gonna take a really, really long time, like, to be a 100% renewable. Not that that's your thesis, but, like, what do you think?
00:24:22 · Alan Chang
[00:24:22] S1: Yeah. So it's a great question, actually. So... Yeah. So as you pointed out there's a lot of AI labs that couldn't wait for the grid and the fact that you're building your own power plants behind the meter. And natural gas turbines is right now the best choice. Yep. We've also seen some AI labs using a combination of solar battery and net gas, but natural gas is always part of the solution. So to be honest, right now there is no clear mix of technology that can get us to 100% renewable at low cost. Doesn't exist today in our view. Solar gets us some way, storage gets us some way, but basically beyond a certain percentage of the energy mix, it stops making stops making economical sense. Because you kind of think of, internally solar, when you increase solar capacity everywhere in the grid, the solar generation is highly coupled, highly correlated. So if solar plant A is generating, so is solar plant B. And when solar plant A is not generating, so is solar plant B, right? Obviously, right? For wind it's actually very similar too, right? Wind speeds are very, very highly correlated across regions, even across countries. And obviously like if you want to store excess energy with batteries, right now battery acts as a kind of like a short term storage, right? So we're talking about like two hour batteries or maybe even four hour batteries, right? They're designed for very short term energy storage. But if you talk about like weeks or sometimes even months without solar or very little solar wind, it doesn't work, right? You can't have a system where pray to God there's enough sun or wind, right, to sustain, to power your economy, right? And you can also solve that by basically overbuilding batteries. But basically every incremental battery you add to the system, the cost just blows up. So right now there's no economic way to have a fully renewable zero carbon system. Not possible.
00:26:55 · Nichole Wischoff, Alan Chang
[00:26:55] S0: Yeah. I know this is off the cuff here, but in terms of nuclear, I think we were years out in terms of commercialization, especially in The US market where everyone associates it with something negative. Do you have a take on the future of nuclear and making an impact here? [00:27:10] S1: I assume you mean fission. Yes. So right now, there are several issues with nuclear. Right Right? Now the biggest bottleneck for nuclear is regulation. I'll say this is true not just in The U. S, but lot of Western economies. There's an overregulation of nuclear and I'll say excessive regulation, that basically makes it uneconomical. So for example, if you look at lot of nuclear in The U. S, there has been effectively been subsidized. So even if the CapEx is paid out or they pay back, there has been a lot of subsidies from utilities, effectively from rate payers, to ensure existing nuclear plants can keep open. So it cannot, as of today, as a, you know, cannot be profitable on a standalone basis. [00:28:17] S0: Yeah. It's been fascinating to at least see this from The US perspective, then you've got SMRs, and I'm just so curious, like, where... And then it just feels like this rapid So... Experience of
00:28:17 · Nichole Wischoff, Alan Chang
[00:28:17] S0: Yeah. It's been fascinating to at least see this from The US perspective, then you've got SMRs, and I'm just so curious, like, where... And then it just feels like this rapid So... Experience of [00:28:26] S1: Yeah. So on SMRs, we actually did a deep dive in SMRs as well. It's actually public on, if you scroll down enough on my x feed. So the problem with SMOS is the cost of regulation doesn't scale down. So if you're trying to build a, let's say a normal nuclear power plant, and compare it to let's say SMR, the cost of regulations is a fixed cost. So actually on a percentage basis, the cost of regulation actually goes up as you build a smaller nuclear power plant. So SMRs right now doesn't make sense unless there's major regulation reform. Which we hear all the time, right, in the news. There's major nuclear reform coming. But until I I see that happen, know, right now, our view is, like, we're still bearish in nuclear until that happens.
00:28:26 · Alan Chang, Nichole Wischoff
[00:28:26] S1: Yeah. So on SMRs, we actually did a deep dive in SMRs as well. It's actually public on, if you scroll down enough on my x feed. So the problem with SMOS is the cost of regulation doesn't scale down. So if you're trying to build a, let's say a normal nuclear power plant, and compare it to let's say SMR, the cost of regulations is a fixed cost. So actually on a percentage basis, the cost of regulation actually goes up as you build a smaller nuclear power plant. So SMRs right now doesn't make sense unless there's major regulation reform. Which we hear all the time, right, in the news. There's major nuclear reform coming. But until I I see that happen, know, right now, our view is, like, we're still bearish in nuclear until that happens. [00:29:21] S0: Yeah. There's... I was at Valor atomics also recently down in LA, and I mean, I think the amount of time you have to spend in DC, at least here in The US, is is astronomical. I think folks are obviously bullish in the new administration from this perspective, but to your point, who knows? And so it's a big risk and a big cost. Speaking of CapEx, though, so you've raised a 170,000,000 so far from great funds. What do you think in terms of capital intensity it requires to really, like, reach escape velocity? I mean, you guys are already valued at 5,000,000,000, but that could be a trillion. So, like, how much more capital do you think this requires?
00:29:21 · Nichole Wischoff, Alan Chang
[00:29:21] S0: Yeah. There's... I was at Valor atomics also recently down in LA, and I mean, I think the amount of time you have to spend in DC, at least here in The US, is is astronomical. I think folks are obviously bullish in the new administration from this perspective, but to your point, who knows? And so it's a big risk and a big cost. Speaking of CapEx, though, so you've raised a 170,000,000 so far from great funds. What do you think in terms of capital intensity it requires to really, like, reach escape velocity? I mean, you guys are already valued at 5,000,000,000, but that could be a trillion. So, like, how much more capital do you think this requires? [00:29:55] S1: Yeah. So I think I think it's important to distinguish between, like, equity and and and debt Yep. As well as, like, crypto markets. So there are pros and cons to each capital type, right? And for example, equity is great for zero to one type capital, right? So if you try and get to zero to one and you try and prove, let's say, a business model, x is [00:30:27] S0: When you probably can't even get a debt facility yet because there's not much [00:30:30] S1: Exactly, exactly. However, if we try to go from one to n, that is great for [00:30:35] S0: that. So