00:11:35 · Isaiah Taylor
[00:11:35] S1: So I can't tell you the exact cost of what we spent on this plant, but I will tell you that we achieved construction complete on this site when we had raised less than a $100,000,000 in total. And obviously we spent a lot less than that on the reactor itself. So that's extraordinary for a new nuclear reactor, and by the way, this is a real nuclear reactor, this thing makes power. It hasn't turned on yet, you know, so knock on wood, we've got a lot of work to do in the next few weeks to get this thing running, but this is not a cold criticality, this is not a critical assembly, this is a reactor that makes power, it has a cooling loop, we're gonna make thermal power out of it, it's gonna have burn up, we have full shielding because we have full gamma production, we have full neutron flux, and we even have helium filtration, we have activity monitoring on our cooling loop, like, it's the full thing, and cumulatively, company history, we raised less than a $100,000,000. So that's pretty extraordinary. Now the question is like, how far does that go? By my best math today, I believe that the idiot index of nuclear is in the hundreds. So the normal, like a good idiot index for a product, right? So idiot index being what's the cost of the thing versus the cost of its constituent elements. So if you bought the elements on the commodity markets and it's just added those numbers up versus the cost that you buy, that you bought it for, that you built it for, a good idiot index is somewhere around like 10 for like an industrial product, for a mass manufactured commodity product it's, you know, it's maybe somewhere like six or seven, and nuclear's in the hundreds. That's that's kind of the best estimate I can come up with is like in the hundreds. So what does that tell you? Well, tells you that the industry is formatted incorrectly. It's formatted with a system of incentives where nobody's incentivized to actually do this well. There are too many parties that benefit from costs increasing. Right? So our strategy at Valar is we do everything. We pick up a patch of land, we clear it, we build a reactor, we many... We design the reactor, we engineer the reactor, we manufacture it, we put it on the site, we plug it in, and then we operate it. And when we own that entire scope, we are incentivized to make it as effective as possible.
00:13:56 · Isaiah Taylor, Ty Morse
We're incentivized to say, does that thing really need to cost like a million dollars when it's actually $50 of steel? Like, does that actually make sense? Does that thing need to cost $5,000,000 when it, you know, you could replicate the same function with like a couple $100,000 of of equipment? Like, those are the questions that just don't really get asked in nuclear today because there are so many different parties and different vendors and different responsibilities fractured between design and engineering and EPC and operations, and at the end of the day it's the rate payer, you know, who pays that cost. Right? So, you know, taking this as an entire market that we do well is really what's gonna fix that problem. [00:14:39] S0: It's a little bit like if Boeing made the plane, made the gasoline for the... Or the, you know, jet fuel for the plane, and then just made, you know, their optimization function was just on the ticket price.
00:14:39 · Ty Morse, Isaiah Taylor
[00:14:39] S0: It's a little bit like if Boeing made the plane, made the gasoline for the... Or the, you know, jet fuel for the plane, and then just made, you know, their optimization function was just on the ticket price. [00:14:50] S1: That's right, and had their own airline. Yeah. Well, what's interesting about that is that that used to be the case, and we called that airline was Transworld Airways, and the Department of Justice actually broke them up and said that you cannot be both an airplane manufacturer and an airline. And I think that was a huge mistake. I think that that's one of the ways that the aviation industry went wrong is that if you have an incredible aircraft design and you're really good at manufacturing airplanes, it's hard for you to benefit from that and you don't get that final margin. Right? So if you design an aircraft that is so safe that it doesn't need pilots, you should be able to benefit from that as an aircraft manufacturer by selling tickets, but we actually can't do that. So there's a lot of structural problems in how industries are formatted that lead to things being more expensive, and I think people view nuclear as like an engineering problem, And it's a little bit deeper than that. It's it's a it's a complex coordination problem. You have to own engineering and design and manufacturing and operations and regulatory engagement and community engagement and talent and all of these different things to deliver the cheapest possible power that we can.
00:14:50 · Isaiah Taylor, Ty Morse
[00:14:50] S1: That's right, and had their own airline. Yeah. Well, what's interesting about that is that that used to be the case, and we called that airline was Transworld Airways, and the Department of Justice actually broke them up and said that you cannot be both an airplane manufacturer and an airline. And I think that was a huge mistake. I think that that's one of the ways that the aviation industry went wrong is that if you have an incredible aircraft design and you're really good at manufacturing airplanes, it's hard for you to benefit from that and you don't get that final margin. Right? So if you design an aircraft that is so safe that it doesn't need pilots, you should be able to benefit from that as an aircraft manufacturer by selling tickets, but we actually can't do that. So there's a lot of structural problems in how industries are formatted that lead to things being more expensive, and I think people view nuclear as like an engineering problem, And it's a little bit deeper than that. It's it's a it's a complex coordination problem. You have to own engineering and design and manufacturing and operations and regulatory engagement and community engagement and talent and all of these different things to deliver the cheapest possible power that we can. [00:16:02] S0: I know for this reactor, you're turning it on, it's gonna produce power, it's not gonna produce that much power. [00:16:07] S1: Yep.
00:16:07 · Isaiah Taylor, Ty Morse
[00:16:07] S1: Yep. [00:16:08] S0: And the next one is gonna produce significantly more. So in your mind, when you were figuring out what are basically the requirements for our first version of this thing. [00:16:17] S1: Yep. [00:16:17] S0: What were those? And then what are you gonna change for v two? [00:16:21] S1: Yeah. So the initial goal for this reactor is let's become a nuclear company. I did not allow Valar Atomics employees to refer to us as a nuclear company before we had actually split the first atom. I don't think that you should call yourself a nuclear company or a nuclear startup before you split an atom. [00:16:38] S0: Until then, you're a paper company?
00:16:40 · Isaiah Taylor
[00:16:40] S1: I mean, yeah. It's... You know, this is a big problem in this industry. Like, we talk a big talk and then we don't ship product, and Valar needs to be different from that. And so, you know, we we actually, I think, like to understate what we're up to and focus on building. So you'll see this in the factory setting as well, we don't call what we're doing a factory. Like if you visit our facility in Hawthorne, we call it our facility. Even when we move into a much larger facility, we'll call it a facility. We won't call it a factory until it's made at least two reactors of the same type. And and that's because we really just have this focus on we have to get back to reality, we have to get back to building, and that's really what the nuclear industry has been missing. We... We've been doing all sorts of things, and we've been doing everything except just building reactors. And so that's really the first step here, and that was the goal on this reactor is what is the smallest, safest reactor that we can make that will actually make power? And you don't want it to be too small. Smallest here means it's small enough that it's easy to build and easy to transport to our test site. If you actually make it much smaller than this, reactors which are much smaller than this are actually harder to build. There's an interesting scaling law with the mean free path of a neutron, where if you try to scale reactors down, the physics gets a lot harder and the materials get a lot harder. So this is a pure graphite reactor. The the core is entirely graphite. That massively simplifies a lot of things about building a reactor and analyzing a reactor. So we basically said, okay, what's the size of the reactor that we know is small enough, that it's easy to build, it's really, really safe, and that that architecture will scale to the final size? And that's a really important part because we didn't want to build the reactor in a really different way to how we'd build the eventual full scale product. It's, you know, if if we made choices on this scale, that we'd then have to go relearn everything to go bigger, there's not a whole lot of point in that.