No Priors: Artificial Intelligence | Technology | Startups
00:45:39 · Isaiah Taylor, S0
[00:45:39] S1: half years to build. [00:45:42] S0: And so we said, well, alright. Maybe I'd be willing to pay $5,000,000, but I'm certainly not gonna wait two and a half years. And so after having haggled with this vendor for about two months trying to convince him to go faster, we eventually got the team together and said, we're gonna have to build our own RPS. And we sat down with Joe, who runs instrumentation and control. Awesome guy. Brown dropout. Really, really good with electronics, and he brought together five team members and locked ourselves in the conference room. And six weeks later, we had a a working RPS, and we spent about $400,000 on it. Everywhere in nuclear is like this, there are totally fake costs from an industry that is just totally anemic. It doesn't know how to build anything anymore. By the way, the conclusion to that story is kind of unfortunate, which is that when the vendor realized that we're gonna do it ourselves because we just could not, you know, get our heads around a two year timeline, they freaked out and started telling everybody in the industry that we're an unsafe company that's gonna kill people because we would dare to to do something ourselves that, you know, is there a special sauce that they're charging the market $5,000,000 for? And if you go to I don't know if you guys use any of these, like, investor search platforms where you can, like, go look up a company and people have done, like, expert calls. They contacted all of those expert calls companies and volunteered to do an expert call on Valor where their CTO
00:45:42 · S0, Sarah Guo
[00:45:42] S0: And so we said, well, alright. Maybe I'd be willing to pay $5,000,000, but I'm certainly not gonna wait two and a half years. And so after having haggled with this vendor for about two months trying to convince him to go faster, we eventually got the team together and said, we're gonna have to build our own RPS. And we sat down with Joe, who runs instrumentation and control. Awesome guy. Brown dropout. Really, really good with electronics, and he brought together five team members and locked ourselves in the conference room. And six weeks later, we had a a working RPS, and we spent about $400,000 on it. Everywhere in nuclear is like this, there are totally fake costs from an industry that is just totally anemic. It doesn't know how to build anything anymore. By the way, the conclusion to that story is kind of unfortunate, which is that when the vendor realized that we're gonna do it ourselves because we just could not, you know, get our heads around a two year timeline, they freaked out and started telling everybody in the industry that we're an unsafe company that's gonna kill people because we would dare to to do something ourselves that, you know, is there a special sauce that they're charging the market $5,000,000 for? And if you go to I don't know if you guys use any of these, like, investor search platforms where you can, like, go look up a company and people have done, like, expert calls. They contacted all of those expert calls companies and volunteered to do an expert call on Valor where their CTO [00:47:11] S2: shitty.
00:47:11 · Sarah Guo, S0, Isaiah Taylor
[00:47:11] S2: shitty. [00:47:12] S0: Yeah. Their CTO basically went and, like, ranted about how we're the worst company on earth because this is a massive, massive threat to them. The fact that their $5,000,000 system, we can just make for a couple $100 with a team of five engineers. But the more that you look at a nuclear, the more it's like this. Everywhere you look, it's a fake industry that has not been building anything for forty years, and a little bit that they have been building, they're charging up 100 x margin on. But if you just take it from first principles and you have smart people in the room and you're willing to build it yourself, you end up with this, and the plant is running. [00:47:46] S2: There is something very inspiring about the idea of, like, given the physics work Yeah. It should be possible. Absolutely. And if it is possible to do faster here, the best people will come and the capital will come. [00:47:58] S1: Exactly. [00:48:00] S2: This is an expensive project as far as I can tell. How do you think about the fact that the you're an equity finance venture backed company today. How how do you think about the fact that the, like, debt vehicles, project financing, operational proof of this doesn't really exist in the ecosystem to, you know, perhaps support as much scale as you'd like, as quickly as you'd like?
00:48:00 · Sarah Guo, Isaiah Taylor
[00:48:00] S2: This is an expensive project as far as I can tell. How do you think about the fact that the you're an equity finance venture backed company today. How how do you think about the fact that the, like, debt vehicles, project financing, operational proof of this doesn't really exist in the ecosystem to, you know, perhaps support as much scale as you'd like, as quickly as you'd like? [00:48:22] S1: Yeah. So this is actually one of the things that I noticed years before starting the company. The the sort of traditional plan for nuclear startup is you try to do some engineering and some design and some customer LOIs, MOUs, and you try to assemble this package. And it's a it's essentially paper. Right? But it's a package that's attractive enough to get somebody to come and fund the project. Right? That's the essential plan of all nuclear startups. They want to convince a debt financer or a project financer or something like that to fund their nice paper package of designs and partnerships. I went into this company believing that and by the way, I believe that that was possible, like, ten years ago. [00:49:04] S2: Mhmm.
00:49:05 · Isaiah Taylor
[00:49:05] S1: And after watching this fail over and over and over in other startups, I came into this company knowing we're not gonna do that. One of the unique advantages that The United States has is a risk on equity capital environment. Right? And the type of risk that we are asking investors to take is we know the physics works. We know that there's infinite demand, and how we go from here to there is technology execution. And guess what? Venture capital in The United States is the best at underwriting tech risk of anywhere in the world. Right? That is how Silicon Valley has come to be what it is. That is how venture capital has come to, you know, eat as much of of finance as it has is that venture capitalists know how to underwrite technical risk. And it's execution and it's you know, when we say tech, we're not talking about physics. We're not talking about science. We're talking about mechanical engineering. We're talking about thermal hydraulics. We're talking about instrumentation, right, manufacturing methods. These are it's complicated. It's nuclear, but it's, like, significantly less complicated than a rocket engine, for example. So, you know, I think this is one of our our fundamental edges and advantages is that we're risk on about this, and we have a cap table that's that's risk on about this. We are willing to go build reactors on equity balance sheet because that's going to allow us to prove it years ahead of anybody else. Right? Where where our competitors are still trying to convince, you know, fundamentally risk averse, you know, financers to to finance a project, we will be on our fifth reactor. Right? And after five reactors well, actually, now project finance is an option. Right? Now debt is an option, but it's an only an option once those early backers have put the capital in the ground, demonstrated it, and that becomes an enormous moat that's frankly gonna be impossible to beat.
00:50:50 · Sarah Guo, Isaiah Taylor
[00:50:50] S2: One of the more different things that you've decided to do here is, you know, try to build your own plant independently and bring customers to it as, you know, at much scale as possible in a gigasite. Right? And, you know, part of the belief there is like, well, if I can provide power at scale and especially cheap power, like the load will come to me. Yes. Many things. You know, can you describe like the rationale behind that strategy? [00:51:22] S1: Yeah. Yeah. It comes from a very similar argument that I was making before where I'd watched startups try to get that deal right for a very long time. And frankly, there are just too many parties. Right? There are, like, too many people and too many parties And [00:51:37] S2: how's your speed to be like, well, let's negotiate about this site and this permit?