The Information's TITV
00:06:43 · Charles Hua
[00:06:43] S1: Yeah. Well, very few people fully grasp this, but the biggest drivers for why utility bills and electricity prices have gone up over the last five years really doesn't have to do with data centers. It has to do with a grid that's getting old that costs a lot of money to replace and repair and modernize and extreme weather events, whether it's hurricanes out West or... Excuse me, hurricanes in the Southeast or wildfires out West. That has taken a huge toll. And when you look at last year, utilities requested a record $31,000,000,000 in rate increases. That was double the previous year. A lot of their stated reasons for that was an aging grid. And when you look at the next five years, utilities are planning to spend $1,400,000,000,000 on capital expenditures over the next five years. That's 2,000 Hoover Dam's worth of spending. And that spending is not for data centers primarily. It is primarily to modernize and and make sure that our grid still functions as it is. So I think those are some of the underlying dynamics at play here. Now the thing about electricity prices is that there is a potential over these next four years for electricity prices to come down. And what it's gonna take is getting more juice out of our current grid infrastructure. We don't use our grid particularly efficiently, so there's a lot of headroom available on the system in many jurisdictions that utilities aren't incentivized to tap. But right now, I think under this heightened pressure around electricity prices, around data center development, and around a need to get more out of our grid, I do think that utilities will feel more heat to get as much juice out of the current system as they can.
00:08:18 · Akash Pasricha
[00:08:18] S0: Can I ask, in your conversations with all these stakeholders here on the ground, I mean, if if you look at the market movements this morning, the hyperscalers, Amazon, Google, Microsoft, they're all up this morning? Nebius and CoreWeave, the Neo Cloud companies, they're trading down. SpaceX is also down. And so I wonder if in your conversations, have expressed any kind of perspective that it matters who is building the data center. In other words, a hyperscaler building a data center in my neighborhood is very different than a younger neo cloud company. Maybe I might be more okay with that. And by the way, that's also given the factors you just mentioned, which is that maybe the rising energy prices are not necessarily only because of the data center. Is that a perspective that has come up at all for you?
00:09:11 · Charles Hua
[00:09:11] S1: Well, I think that the the the the the the narrative is is at this point, it's... The train has left the station that, you know, whether or not this is true in in every instance or even a majority of instances, I think most members of the public have a assumption that the reason why their bills are going up is because of that new data center coming into town. And when you think about it, that perception, it makes sense why folks would come to that conclusion. They're seeing their utility bills go up and up and up over the last few years, and nobody is giving an explanation as to why that is. And so the natural default response is to look at that new entrant and say, Well, it must be that new data center. I don't know that the industry, frankly, energy industry or the tech industry has done as much as it can to really educate different stakeholders on exactly how the utility rate making process works, in part because it's just so complicated. And so there's a need for more education of policymakers in particular around what those underlying drivers are. And to your earlier question, I absolutely do think that there are nuances in terms of different companies, how they're positioned in this and how they're perceived. And it all comes down to trust at the end of the day when it comes to policymakers and whether they trust a company to come into their territory and build new infrastructure projects. And every company is going to land a little bit differently on that. Every company will have a different balance sheet to work with in terms of funding and financing, grid upgrades, or new energy infrastructure costs, and that's just gonna look very different. Every company is gonna have a different policy when it comes to engaging in NDAs or transparency measures. Those are all things where I don't know that every community is looking at every single item on the checklist and saying, are they doing this per se? But I do think they're loosely taking this more holistic view and asking themselves, Do I trust that this company is going to look out for my interests? And I think right now, it's very clear that there's a gap between how folks perceive those entrants and what the intention of those customers looks like on the ground.
00:11:19 · Akash Pasricha, Bradley Tusk
[00:11:19] S0: Right. Well, Charles, I want to thank you for coming on. That is Charles Hua, founder and executive director of Powerlines here on TITV. Data centers weren't the only thing on the ballot last night. The California billionaires tax is looking unlikely to pass based on this morning's results. I'm also thinking about what AI focused bills a Democratic Congress might go for. I wanna bring on Bradley Tusk, CEO and founder of Tusk Ventures for a conversation. Bradley, welcome back to the show. It's great to have you here. [00:11:49] S2: Hey, Akash. How are doing? [00:11:50] S0: I'm doing well. What time did you go to sleep last night? [00:11:53] S2: 01:30 ish. Was waiting on, we had been working on the Lauren Boebert race and, to take her out. And she was... It was like 96% of the vote in at 01:30, and I finally called it a night. And they still haven't called it yet, but we we feel pretty good about it. We're up about 1.4%. [00:12:12] S0: Nice. Okay. All right. So, Bradley, you wrote before these elections elections happened a couple weeks ago. You wrote that the midterms aren't really going to impact the tech sector. Correct. Do do you still believe that? Yeah.
00:12:12 · Akash Pasricha, Bradley Tusk
[00:12:12] S0: Nice. Okay. All right. So, Bradley, you wrote before these elections elections happened a couple weeks ago. You wrote that the midterms aren't really going to impact the tech sector. Correct. Do do you still believe that? Yeah. [00:12:27] S2: Yeah. Absolutely. Because so Democrats obviously now have, you know, 55 seats in the Senate, might end up like two sixty in the House. That's a lot. But, in order to override a veto from Trump, you need 66 votes in the Senate, two nine... Roughly two ninety in the House. And on at least issues like AI, I don't see Republican members of Congress defying him. You know, I could see on the WAR, them using the War Powers Act, to be able to sort of halt the the activity there because it's so unpopular among MAGA especially. But I just don't know that they're gonna be able to pull together there. And then on the state level, it doesn't really matter because AI is so widely unpopular among voters in both parties that it was going face the same slate of really tough regulation in all 50 states starting legislative sessions in January, regardless if it won last night. So, you know, AI and tech is in for a really tough legislative session coming up. But that would have been the case regardless of what happened last night.
00:12:27 · Bradley Tusk, Akash Pasricha
[00:12:27] S2: Yeah. Absolutely. Because so Democrats obviously now have, you know, 55 seats in the Senate, might end up like two sixty in the House. That's a lot. But, in order to override a veto from Trump, you need 66 votes in the Senate, two nine... Roughly two ninety in the House. And on at least issues like AI, I don't see Republican members of Congress defying him. You know, I could see on the WAR, them using the War Powers Act, to be able to sort of halt the the activity there because it's so unpopular among MAGA especially. But I just don't know that they're gonna be able to pull together there. And then on the state level, it doesn't really matter because AI is so widely unpopular among voters in both parties that it was going face the same slate of really tough regulation in all 50 states starting legislative sessions in January, regardless if it won last night. So, you know, AI and tech is in for a really tough legislative session coming up. But that would have been the case regardless of what happened last night. [00:13:29] S0: So we'll we'll go to the state races here in a second, but I want to stick with the federal level here. I mean, as you think about the bills that Democrats might put forward, I mean, one question I've had this morning is, is there a menu of bills or legislation that Trump might feel he actually might need to sign and and not veto as it relates to AI or tech? Is there anything that