00:24:45 · Scott Nolan
[00:24:45] S2: Not at all. No, mean, you look at the consumption and consumers are on the question of like, AI be consumed? Absolutely, by both people and by companies. It will be consumed. It's being consumed. The growth is astronomical. To your point, people have a hard time thinking through exponentials. I did over a decade of investing in venture where all you're supposed to do is think about exponentials. People still have a really hard time with it, myself included. It's just very hard to imagine that something 10x's and 10x's again and like 10x's again after that. It's much, much easier to say, Okay, we could see it growing a little bit. Maybe it grows 50%. Oh, maybe that's a 3x, a 5x. People very rarely appreciate that a lot of the big changes that happen in the world are driven by things that 10x again and again and again. So I think that is what's happening and will happen, and it's on the demand side. And, therefore, someone's gonna serve that demand. And if The US doesn't do it, I I agree. It will happen in China. It will happen in other countries, and it will probably happen in a way that's not as safe, not as clean. So And we should take responsibility and make sure that can happen here in a way that we influence. I think that's the task. You then think through the next five years, and how is it all going to work? Great point on the deliveries. Yeah, it takes you a while if you wanna order a turbine now, but people have been ordering turbines for the past few years, so they're on their way. Could we produce even more turbines? Could we ramp production even more aggressively? Yes. But that's up to up to the companies to do. You do see some new companies jumping into the space because they think they wanna lean in, and they think that this is actually gonna be even bigger than the incumbents think. So I think that'll that'll help solve it. I think with the right regulations, American industry, if there is money to be made in it, people will find a way to to solve the problem. So I think I think we'll see a lot of things, like even the fuel cells being used to produce energy off of off of methane, off of natural gas, very unexpected, but turned out to be a use case, and now people are deploying that aggressively. So I think we're going to see a ton of innovation of how to actually deliver this more energy, period.
00:26:52 · Scott Nolan, Ty Morse
And then whether it's on the grid, I think we're going to see people innovate there. Think we're also gonna see a ton of it behind the meter, just production and consumption on almost isolated islands, whether it's nuclear or something else, and the data center and the power production being right there together with no impact outside of some fence line. [00:27:11] S0: And I think to stay ahead of China, it's going to be incredibly tough. What are the biggest things that you guys are maybe seeing today that people aren't paying attention to that are going to be issues? You could just see them from your vantage points.
00:27:24 · Chris Wright
[00:27:24] S1: Going back to China, they've had very rapid growth in their electricity production, good on them, but they've had the opposite story. They've had relatively modest growth in their oil production, relatively modest growth in their natural gas production and relatively meaningful growth in their coal production but in percentage terms not that rapid growth. So China replaced The United States of twenty years ago as by far the world's largest importer of oil and by far the world's largest importer of natural gas. And they're also a net importer of coal. And so they get nuclear. They're moving ahead, but their economy even more than The US and the world, which are sort of think around 85% hydrocarbons, China's closer to 90% hydrocarbons, and they're a massive importer of those. So they have an inherent energy dependence and an energy weakness that we don't have in The United States. Our weakness is easier to fix. It's bureaucratic and rules. But we have the people, we have the capital, we have the smarts to do things fast in America. We just to get the system out of the way and let it go. I think one of the challenges coming up is going to be humans. We pushed large industry out of The United States, energy intensive industry, Scott was talking about that earlier saying we moved to less energy intensive industry. This all starts when we admitted China to the World Trade Organization and unilaterally granted them most favored nation status. Our manufacturing in dollar terms continued to grow after that in dollar terms but as a percent of our economy it shrunk dramatically. The rest of our economy grew much faster. It didn't mean the world needed less manufacturing products, it just meant energy intensive large scale manufacturing all went to Asia. We displaced so much of it out of our country. If you look at the European nations, they did it even more dramatically. They don't have flat electricity production from twenty years ago. They produced 20% or more less electricity than they did twenty years ago, and almost all of their heavy industry left. In the name of being greener or fighting climate change, you just move emissions from one place to the other. There's nothing green about that. It's just impoverishing. Western Europe in dollar terms has had zero per capita economic growth since 2010, since they went crazy on energy policy.
00:29:40 · Chris Wright
They shrunk their energy production and completely stopped their economic growth. I believe they will pivot. They're not going to be players in AI, they're not going to be players in advanced manufacturing without a pivot. Now maybe this is a loud enough wake up call. Some of them are saying all the right things now and hopefully they're pivoting. We may not have been stars in the industrial world and electricity world the last twenty years but we weren't the worst actors. But I think we are pivoting to be among the best actors. We're going to have speed here in the Department of Energy. We're thrilled to get the benefit of this AI revolution to help push scientific advancement to a much faster pace. There are still cancers and many other diseases that you get that news, it's a death sentence. You may have a year, you may have a few years. We can fix those problems. We can solve those problems by leveraging human mind and human creativity and supercharging it with AI. And I could not be more optimistic about the speed at which we're going to see improvement in science, improvement in engineering, improvement in human quality of life. It's been a tremendous story over the last two centuries. I think the next decade is going to be outstanding. I know there's anxiety associated with it, which is a real thing, but the improvements I think are going to be simply tremendous.
00:31:00 · Scott Nolan
[00:31:00] S2: Yeah. That's... It's it's a great point. The electric grid only being a part of the story. You know, you look at the growth. Yes. It's... The grid's been pretty flat, but US is a net exporter of fossil fuels and of energy. Completely different completely different story. Now the economy has been running on the grid for the most part, and so that is highly correlated with our economic growth. So we do need to grow it if we're looking at any ways that we've been running the economy to date. I do think as we really expand energy production, a lot of it will be consumed behind the meter. It won't have to go through those transmission lines. I think there's actually a huge opportunity to do something with that, though. You ask, What are the stoppers gonna be? What are the brakes gonna be? I think there are huge benefits that everyone will experience from AI. There's gonna be a bunch of changes, but there's examples on the cancer side. Think a lot of people saw it. Someone used AI to cure their dog's cancer. They sequenced it. They looked up what things could actually target this, and they came up with a cure. I think that was a few months ago we saw that. So there's going to be a lot of specifics. I think as people really start using AI for benefit, there's going be a bunch of stuff that gets solved. But there still is a lot of anxiety around it. And I think one of the biggest anxieties... There's really been two that you've heard about, and one's water usage, which I think is becoming a thing of the past as people design and use and deploy closed loop water data centers. You fill them up once, and you don't need to really consume water after that. But then the grid question, and are these data centers going to actually consume all my community's electricity and drive up the electricity price? And I think if that's allowed to happen, that will have been a failure of regulation. And so I think it's also a failure on the part of the companies deploying data centers. If you think, Okay, company A versus company B, we're in an arms race. We need to really expand energy production. We really need to deploy these data centers. How do you actually win over a community? You actually give them some benefit. It shouldn't be neutral or cost. It should be benefit. And so you look at some of these data centers, and it's $10 $20.40 dollars per watt.
00:33:10 · Scott Nolan, Ty Morse
You could say maybe a third or half of that is the energy production that they might do behind the meter. Well, instead of doing 1x your production, why don't you do 110%, 1.1x? The cost of the project doesn't change that much. It changes three percent to 5%. But now you can pitch a community and say, hey. We're not actually consuming your power. We're actually providing power onto the grid, driving down your rates. So that's... I mean, that's an idea that I've had, I think, is a good one, but you could do it through regulation, or you could let the company sign up for it themselves. I think the the free market way is you let the companies outcompete each other, and who's gonna give the most back? So I think I think the whole how do you get communities on board with this? How do you let them say yes to new power production and and consumption at data centers is it's things like that, which to me sound... Seem very simple, and it's it's this one way that you can help people see a lot of benefit from it as we go through this transition. [00:34:08] S0: Is there any other things on kind of the matter of incentives? And if you design the incentives to be massively beneficial to communities then they're probably going be very excited about it. Right now on social media, AI is fucking hated. People just hate it for some reason. How do we kind of flip that?