Insane Demands of AI & Datacenters: Exowatt’s Mission for Affordable, Sustainable Power| E2039
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You're typical A I search, right? What using chat P T or goole or whatever is using ten to twenty five times more energy than the third day you're running just a year ago using gool. So this is super energy hungry.

And if you want to have one hundred million users using U A. I search or billion, you have to imagine if now somehow make for ten times more energy or twenty five times of our energy. Yeah so it's insane. And energy demand and energy growth, I don't think anyone's actually fully faaers ing the extent of IT.

It's crazy to me that modern personal ious corporations who have been trim had count cutting back on the the offer spent are .

willing to pay five x the race win A I knows no cost boundaries.

That's absolutely insane. This weekend, startups is brought to you by net sweet, the number one cloud financial system, bringing accounting, financial management, inventory and hr into one platform, giving you one source of truth. Download C F, those guide to A I and machine learning for free at next week.

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Right now, twice listeners can subscribe for just fifty cents per week for your first year at washington post dot com slash west. Welcome back to this week and startups. My name is alex.

And today we are talking about power. And no, I don't mean influence, I mean electricity. But more than they were also going to talk about heat.

We are in the early days of what could be an enormous power crunch, not only here in the us, but globally as well. What's going on? Well, couple questions for you.

Where is europe going to get the juice for what golden thinks could be a forty to fifty percent gain in power demand by two thousand and thirty three? And if data signers could boost power demand by twenty percent here in the us, where is the energy going to come from? Well, we are building bigger, more powerful and just more data.

Understand that is driving this power demand. So we are going to have to think equally hard about building a Better power generation system and grid. And to help me understand a little bit more about what we need and how we're going to solve those games.

Hanan part visions. He is the cofounder and CEO over x ot hann. Thank you so much for being on the show today.

Expanding alex. Sad to be here.

I'm incited how you want. I have been talking about your company more than I think I should because I love this solution that you guys are putting forward that's going to help hopefully plug some of the gaps that I just mentioned in the both domestic and global power systems. But I want to start with kind of telling people why we care if that makes sense, because I think it's going to throw some steps of people, tell them, oh my god.

H, this is a big issue, but I want to put IT into chart form. So here we have a shark that just shows the U. S.

Net on grid demand forecast through two thousand and thirty five. And this is from S. M.

P. global. So this is not my data, this is theirs. But on this church shows a plata, if you will, that in the us, our power demands flatten out from roughly two thousand fire to two thousand and twenty. And then things changed. And now we are forecasting quite a lot of new demand. Looking at this chart, do you think these forecasts are um I don't know .

reasonable yeah I know. Well, actually I think they might be a underestimate IT in many ways uh just given the recent A I boom and the amount of energy and power that needed to power the data centres for ai. I think everyone in the industry and also at the uh federal and state level is concerned about demand of energy needed poverties energy hungry energy passive data centres, which ultimately to the benefit of all consumers uh, using A I products ah i'm .

just going to born away by how stable things were. And you know for a long time, when I thought about the question of power generation, IT was always how quickly we swap out coal fire power plants are natural gas generation facilities for solar or hydro. But now we have to actually add quite a lot. And just from a very high level, that really does change the calculus of our power investments.

Yeah, yeah, absolutely. What he said renewers were thought of as being media a substitute to fossil fuel power generation systems. Now IT is no longer substitution is a transition into a mix that has include both, and even that's not enough. So how we have to find more source of generation.

There's a company at a germany called kite craft that's doing flying turbans. And i'm like, okay, good. Now we are really trying every figure of once to the plug these gaps. But you mean a good point about data sitters? Let's bring up a chart that we have from goldmine that shows global data centre electricity y consumption over time and also IT shows just how quickly this is going up.

So if you don't think that we're talking about something very serious that will impact all major economies who look at this and you can see an explosion in demand in terms of tera hours depo directors in the future. I mean, i'm not i'm a lot. I think again, here we're looking at church that is a little bit conservative.

absolutely. Yeah I mean, I don't think most people still appreciate how energy hungry data centers are. An average data center that's about a underneath a data center which isn't like a super bigger one. Yeah and and as as what are in conversations with folks, they want to build even bigger ones like bigger I say a hundred mega data center consumes the equivalent of eighty to one hundred thousand households worth of energy.

eighty two, one hundred thousand and households and that's a hundred minutes .

yeah and that's one data center and it's taking the footprint of maybe only a couple of households. So like you can imagine how how energy dense this is and how energy tensor IT is going to be. And you know, when I go to some conferences of people talk about how how much more energy dense these data center acts are going to become, yeah, IT is quite scary.

How much energy is going to be consumed by one GPU unit. And and and that's going to the future that are trying to build towards us to make them even more energy dense so that hopefully that same I was once one hundred megaworld, now output five hundred megawatts uh energy prospect they were conceived five g expect. I do think we're underestimate IT, and we just have to prepare to bring on a lot more generation to the grade if we want to be all parties.

IT is, you know, I thought I had gone through every single chart statistics data point on this topic, and I couldn't be surprised anymore. But if a one hundred meo did, this is a two, one hundred thousand households.

And we're talking about the water, which would be ten one hundred while negotiations to ah that is more households and there are in my state or island, which is a small state to be clear, but like that bunkers and we're not talking about one and we're talking about a series of them not only in the U. S. But around I mean, Frankly, I thinking these are going to be .

around the world. Yeah yeah no. I mean, everywhere. I mean, the big jack companies each one of are announcing ambitions for like hundred give what size data center campuses and in the air race, everyone is willing to spend anything to win the race. There's absolutely no. We're not seeing any signs of people being concerned about this because they know whoever when the I race is the winner take all winner and that they are win to compete at any level.

Yeah okay. Brings me to the the kind of the foundation story. X A lot because you guys started this company.

I think IT was in two thousand twenty three. So it's a pretty recent startup. I have a couple of ideas that might have been the genius is point for the business. But what was the problem you guys saw that you wanted to grow there and employed immediately?

Yeah good question. So uh x ot started at a venture studio called atomic where uh jack, who is also cofounder ex ode and see of atomic and their partners had the faces around A I and the A I boom that we were seeing.

And the faces was that the there are the second order effects of A I, which are non necessarily application layer, which is dominated by all these big tech companies, but rather picks and shovels layer the infrastructure, the data center, to power the chips. And that's where huge opportunity is going to be and is going to, uh, you know, grow very fast. And then I guess they were head of a curve at tents.

And when I partner, what in my background and an engineering and energy, we really wanted to find a way to power these, a ida and eight centers. The whole would bring your energy, because that's not really the way to bring power today. And the key inside that we had was that we have to develop a modular system that we can scale with different projects in different data enterprise and deployed very quickly so that we can actually get get this back to market and start powers. Some of these a identity centers, what is existing ones are the ones that are being planned to build be built um using renewer energy and that was a core idea. And genesis behind EXO one.

what does the future hold for business? Well, if you ask nine experts, you're going to get ten answers. Bull, market by market.

Rates go up. Rates go down. Can someone please inventer Crystal ball? And if you are building one, just email me off.

But until we get that Crystal, all you need to future proof your business with next week by oracle, it's the number one E R P tool out there trusted by over forty thousand businesses. And what does next? We do well.

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the x ot solution, which we're going to get into A A little bit more. But IT combines uh, a generation and and stored. Was that always .

the plan at the company? Well, the the plan and ultimately, our goal was to be able to produce and generate. Electricity as cheaply as possible for a number reasons. Number one, we wanted to be able to make the cheapest a possible extrication so that we can make these A I applications downstream also more feasible for larger audience.

So they're not becoming uh, very expensive because cost energy because you know six percent of the Operating expenses of a data center are related to the energy that used or a part that used for computer or for cooling. So that's a major cost component. The other reason we wanted to be able to make elections as we want the customers to make a decision between renewable l energy or fossil fields, we wanted them to make an economic decision for the cheapest energy possible.

So it's not that they're going to go there to pay an reino energy premium, but rather, this is the cheapest energy possible period like that's IT. That's the only reason choosing yet, not because you won't even save the planets, because this is the most economic sound thing to do. So we we really started with that goal in mind.

And instead of very aggressive, ambitious goal for ourself to ultimately, at scale, be able to press electricity at once and per q hour, and kind of worked our way backwards from that. And and actually the solution really developed, evolved around that IT wasn't really, we had a 这个 idea around the way to capture energy， or store energy or convert the energy to electricity. Or rather, I was really about how do I get to that once and get our automate at scale and what the ingredient that get me there. And that's that's what is LED to the X T. Free, the product that we recently launch, which is a combination of many things I wish I had talked about in more detail.

I wanted get some more data on that once in parki a hour because I think a lot of focusing this get their powerball in the mail or electronically and they go a high twenty seven dollars or one hundred and thirteen dollars and they've no idea what was into IT. So can you put that data point into a perspective that folks can kind of, I mean, Frankly.

clock yeah absolutely. I mean, a retail power, basically what you may be paid seeing on on your electrical bill depending on where you're at, ranges from anywhere from you know the low teens last call at twelve to fifteen cents and hour to the high thirty cents killer rain. So that means that typical household, they're consuming like you know eight hundred called hours of energy and they are paying eight hundred times just to make a simple twenty seven thousand thousand hour that's your energy bill per month.

So for context, we're talking about one center at so this is to organ uh or order benefit cheaper than that are because on on the commercial side and in the wholesale markets, the Price energy cheaper than the retail markets, of course, but it's not that big of a difference. So you you're talking about in the wholesale markets or commercial energy, people are paying on average somewhere tween eight to twelve to fifteen cents of killing at our depending on which stayed in. And in some markets, some energy markets like texas, which is a free energy market as and see people are paying for the energy that's available at the cheapest Price possible. So the Price of energy actually doctus tes quite a bad IT, could be as low as few sense, speculate and hours of the day and go up to tens or hundreds of sense one hour, even dollars to kill an hour at other times, given that it's just a as a free market.

Can I ask you or cut, which is the a the texas uh grade, essentially, I am A A pretty free market guy. I'm a capitalist, but IT doesn't seem that everything with more Price volatility gets Better. So i'm coming clear and I know we're off top in a little bit hong, but uh, do you think that the texas models actually Better for for kind of delivering low Price energy? Does that actually work, I guess.

is what i'm saying. Yeah I mean, like everything that has present on to IT, I think the pros are from a poor economic perspective, if there's too much demand and U S. The consumer sometimes don't actually have even pay for energy.

So our cut sometimes sees negative dollars, like essentially for cause of electricity as a consequence. Yet you may at the winter time and the winter time have to pay ten times your average energy bill because there there's no demand, I think is is is driving a lot of competition. And that's why a lot of reval engine development and development in generals and taxes, I think maybe not many people notice, but the california is not the leader in renewable energy.

Texas yeah no, it's true.

And and that's because of this this free market uh, approach. But at the same time, you know you've seen the last couple years when there's a winter storm that concert texas, those consumers do suffer. Yeah, I think .

brazen cosin is a great way to think about IT. But I do love the idea of an all of the above approach to IT bringing more power generation on line and honestly and on. I was gonna press you on nuclear energy and the big products that the major tech anes have announced.

Meta ran into problems with its nuclear power plant plans because of bees, endangered bees, apparently, and then amazon's deal with a power company ran into with interconnection conflict that first cut into IT. IT seems that the hope that nuclear energy can resolve some of the AI power crunched issues in time might be a little too optimistic. I just want to that backstage against your understanding.

Yeah, I think might be a little bit too optimistic as downplay e and quite a bit. I think it's it's very wishful that that nuclear is gone to solve the A I, power a chAllenges at a minimum ent. And next ten years, more likely we're talking fifty to twenty years and it's not like that.

I think that you know technology is bad or not already or whatever. Just the amount of regulatory chAllenges like you mentioned, the couple amount of regulatory chAllenges, the community acceptance chAllenges, the technical risks they have to overcome, the technical feasibility, the manufacturing, the supply chain and the list goes on and on and on. Uh, I think the promise of nuclear is amazing. I think the reality of IT is is far more grim than we would like to accept or believe. And furthermore, I think the fact that we're going to to burn fossil fuels for another ten years to party, say I, that is not have nuclear online doesn't seem like a .

solution which is not famous for being a remote hill top city, if you will. And so I think there's A A little bit urgency. But the thing that nuclear does have going for there, renewables traditionally haven't, is consistency.

IT has a high base load and that matters quite a lot. But IT does seem this can be a long time to come on. And I do think that storage is now being Better couple to renewable.

So IT, IT seems to be resolving the baseload question a little bit. And I do when I kind of move now into the p three. So let's talk about what you guys have built. I'm going to a try to explain to you and then you correct me. Okay.

yeah, okay.

IT is a device that fits into a forty foot shipping container. IT is a series of batteries that store heat. And on top of that, there are a series of solar lenses that take the sun's energy and convert IT into stored heat for both electricity and industrial needs.

Yeah, absolutely. So the way I would rephrase that is it's a modular system and you have the picture up here. So basically what your audiences is looking at or or hearing about is a modular system.

Each module is roughly the size of the forty food shipping container, so about forty three long, A V Y A V tall, and is made of free elements. That's why we call the exotic p free. So the first element is the renewable energy collection system, which is powered by the sun.

So this is a series of custom develop lenses that capture energy from the sun throughout the day and convert this to high temperature heat. This heat is then stored in a battery, as he said. So we've to doubt the custom heat battery cell that can store this energy with minimal losses and way the battery works, and to get into the deliberate of the details of batteries is a sensible heat battery.

So what that means is IT is a solid block that doesn't go for any sort of chemical or electrical chemical reactions, doesn't have any mechanical parts to head and doesn't go for any face changes. So IT doesn't go from solid to liquid or liquid to gas and just stay solid. And this sod block gets very hot. So up to a thousand resources or about two thousand and four, and repair height, and retains this energy for as long as we need IT.

The main advances of this heat battery is compared you to your traditional electrochemical batteries, like live a ion batteries or other types of electric chemical batteries, is that the cost of storage is significantly lower than electricity, so you can store energy for longer with no decoration and for much cheaper, which allow you to then store energy for longer periods, which makes IT useful for an because that requires this batch for twelve, sixteen, eighteen and twenty four hours a day. And that's that's what really helps us and survey data and type load, which is looking for a longer term, this patch for out the day with renewable energy that stored very cheaply. And if we were to do this with traditional solar panels, like solar P V panels and living on batteries, that again, unfortunately would become cost prohibitive because the cost of storing electricity is very high, efficiency losses of converting solar to electricity are high, and a combination of that would not allow us to really provide a dispatchful power solution for up to twenty four hours of dispatch per day .

at anything like to cost me. You're shooting .

for exactly yeah yeah you would never at any scale get to that once and peculiar hour yeah, just by the fact that electric mo batteries. And you know, maybe some of your audience can relate to this. You know what are you it's your phone or any of your other electronic devices.

The batteries, as time goes by, become less and less sufficient a degrade. And you're not really cycling them as much necessarily per day when they're used that as as a source of power generation, of power storage, you're cycling and quite not a lot. And so that is you're gna degrade faster. So not only is your starting cost high, but also your replacement cost is high because you have to continuously replace these batteries with more fresh batteries because they are losing their efficiency over time that he batteries don't have.

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I am familiar with the drawbacks. Look, I on I mean, i've also tracking start up that are working on sod M I on batteries and startups that are doing pressurized gas to store energy and moving water around v batteries. I love all of that.

But and I say this with nothing but respect. IT sounds like you've discovered something that's magical because if you if you're substance, that your up with your solar lenses doesn't degrade, doesn't go through face changes can store energy in the four heat for a long period of time. I got to to ask me, what's the catch? Is there are slow drawn from IT like something has to be yet to give something?

yeah. no. I mean, the category of sense will heat Better. Is isn't necessarily like a new innovation, right? People are using, the Better is applicant's, and some take electricity from the he battery and and dispatched the heat to support industrial heat load.

Yeah I think what's unique and innovative about what we've done is to be able to design this battery material, both from the erl perspective, geometry and heat exchanges, to be able to capture energy from the sun directly and then store that energy effectively throughout the course of a day or multiple days and then dispatch IT to an engine that can convert that the electricity. So there's a lot of innovation that has happened for that chain and including material. But he batteries, I think the technology in the physics of IT aren't new, eternally magical.

And I I think that i'll give you a simple example. So imagine your camping and you go out there and and you won't make some stakes. The best thing you can do is to find a big rock and put that iraq outside directly under the sun throughout the day, and that iraq is going to a get very hot by the end of day. And you can put your stakes on IT and and they ick make your stakes using that hot rock. And now, man, he takes that once the rocks .

method of cooking, everyone used to use back in the day before we had indoor Robin's ladies, generally we had .

rocks exactly that. And you can take this one step further, is imagine you have a tiny magnifying glass in your pocket. And what for out the day you just heat up the rock with the magnifying glass, your rock is going to become even hotter.

So if if we're to downtown, the export technology IT is pretty much that you're taking a rock material and you're hitting him up with a magnifying glass with the sun fat today and the rock is staying hot for at the night. And that's that's basically so we're probably invented this technology at dawn of civilization. We are just going back to IT.

No, no, I don't mean that is a bad thing. I think that is kind of a good thing. But one thing that my old coworker tend to shot who covers, uh, kind of Green tech and in general, Thomas, that batteries have tradeoffs and so is IT harder to, for example, take heat out, does does these batteries have a slow energy disport? Or is there any disadvantage to the he border? You guys vote .

that I be a no. I think the the main way to think about batteries as as two metrics. Number one is the energy density. So how many what hours for a kilogram you're getting. So for example, you know the best of line on batteries like test of acts they they're storing on tween three hundred, four hundred one hours per kilogram, right? There is a heat battery, depending on the material, will be storing summer between fifty to a hundred one hours per kill ground.

So it's less sufficient in weight terms.

yes. So energy you need more material for the same out of energy. So that's one thing.

But the kind of other metric that's to the benefit he batteries is your lithium iron battery costs maybe like two hundred forty five to three hundred dollars for one hour. Where is your he battery cost somewhere between one to ten dollars for what ourselves? That's kind of where the difference comes from.

That is a retrained offs. So at the end of the day and some customers always you know say all is not as energy dances living on batteries or electrical batteries. True, but it's two hundred and sheep er so you know that's a trade off. Also.

i'm not putting IT in my car. This is why i'm so excited by IT like I in my phone, I don't need to move in all the pictures with our technology. I haven't seen a single wheel IT sits on the ground.

I don't care how much you waste the load caring capacity of the planet for weight very high. So that makes a lot sense to me, but I want to go I want to go up a layer to the solar lens is because everyone's a solar panels. We've seen them all the place.

People might even have them on their backyard, on the roof. Solar lenses, to me, are just very large, specialized, I presume, very fancy magazine class, despite you're point out out the rock and the magazine class. How can you get some power out of them? Because if if I look at the images of of the p three, it's one row and I used to seeing fields of solar panel. So talk to me about the the lions effect .

yeah have a good question. I mean, so at the end of the day, and a lot of people when they see us s and they think the top players are like a solar panel, but you're right, it's not a solar panel. It's lens.

All that the lengths is doing is it's a large magnifying glass, if you all that's flattened and so this type of lens is called the, for now, lands. So yeah, it's it's like a flat lands that has grooves on one side and is smooth on the other side. And those grooves kind of just represent the curve ture of a on the lands with our system.

You basically have per module a number of glasses that are just enough uh, collecting enough energy for the day to charge up a battery pack. So then you take a number of these modules and combine them together, including the battery packs and connect them similar to how you with solar panels to ultimately deliver whatever amount of energy that is they are looking for, whatever amount of power is are you looking for. So it's not like that one of these modules per say, or one of these landings ables per say, is going to power data center. No, you still need thousands or tens of thousands of them, but each one of these is enough to power a module that can run a head t engine for up to twenty four hours today.

And that's impressive because we started off talking about how the p three forty feet long, if you like, if it's it's impressive that you can do so much uh, collection with one role of Linda. So I just, I presume from a very physics one of one perspective that a lens allows for more efficient collection of solar energy.

Yeah so if you if you think about from an efficiency prospected, your typical solar P, D panel is converting the incoming solar energy and efficiency of roughly twenty percent electricity. The lenses, depending on which location you at in the country and in the world, through out the day and without the year, can capture or collect up to eighty percent of the incoming energy. Efficiency perspective is much, much higher.

And just give you a sense of the power of each individual lens. You know, as we discuss, i'm in miami. Miami is a Sunny place, but it's not really as Sunny as other places in the country where they receive a lot of direct sun.

For example, imagine california, uh, east california mah, bbi desert, nava, arizona, texas, they receive a lot of, but even in miami, even in in non summer months, we get up to temperatures north of fourteen hundred sales, or about two thousand and eight hundred degrees. Parent height on a single lens, this one lens. So yeah, the lens are very powerful in that sense.

And at end the day, the beauty of the lenses is two things. Number one, you get to put all the heavy stuff behind the lengths on the ground. And look, as you were saying, we don't have to build structures to suspend anything or put IT in the air.

Everything heavy is on the ground. And number two, these lenses are relatively cheap. And that's why we chosen ultimately to our goal of getting to once and parking are we need to make the lenders as sheep as possible. And that's why we design the system around islands is as well.

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okay. So now each p three of what of the stats for how much energy you can store and then disperse over. I was going to say twenty four, our period and on, but might not be the right metric. So what's the right way to think about the energy .

capacity of H P three module? yes. So each p free module can have a number of batteries, acts, and that and that can drives the energy capacity. So a standard one that is completely deployed, upgrade and charged only using the sun will have two battery packs in IT OK. And that produces twenty five killer hours of energy, electricity. And the reason I say electricity, because this is a he battery, is another capacity to IT, which is the moral capacity and varies because IT really is a function of the temperature that you are taking out of the .

battery or charging IT out. So I wanted do a quick direction on heat because I I am not a machinist. I ve done a lot of machines.

I am not a welder. I've done well thing. I've been around industrial facilities. I have some idea of why heat matters. Can you tell why in an industrial setting, heat is almost as valuable of commodity .

as electricity? Yeah, I think before the digital age prety, much everything was driven by heat. I mean, civilization started with heat when we invented fire, and then we kind of became humans, civilized humans. That was, step one, everything you see in industry, what is in the manufacturing industry? The steel industry chemical spun beverbridge a cement everything uses heat as an input, and this is heat at different quality and different grades.

So at low temperature just to in a boil water and use IT for pure uh water, pure vacation and desAlination at maybe hundred to three service all the way up to fifteen hundred real cius, eighteen hundred thousand cities that used in in cement plants or an in the seal industry and even in those industries where are taking electricity from the grid, what they're doing is that converting electricity back to heat. So is all comes back to heat. Um and so that's why heat is so important and that's why that away there, there are a lot of startups and companies focus on the heat application alone because the carbonizing industrial heat by itself is a sixty thousand dollar industry and there's so much that you can do there. The reason we don't sell heat or or not focus on the heat application as bush is because a problem that will shines to solve for is electricity for paring data centers so that unfortunately they don't take heat as an input unless you know someone is meant to chip that runs on head. But um I don't know.

give jenson in a couple of months, you can like him something.

yeah. I, I, I, I, I wouldn't rule that out. It's possible I wouldn't rule IT out. And by the way, will be Better actually if the chips n run on heat IT be more .

efficient for you guys because then you could just pipe and heat directly and not need to go through. What is the mechanism by which you guys convert heat two thousand tricity? Is that A A heiny exchange changer, a sterling engine? Are you guys spending a pattern?

M, what do you do? Yeah, good question. So when we were trying to find the right heat engine for as the number one factories for us were that IT has to be a modular system that has played that we can build around and scale into.

Ah so we studied a lot of different heat engines, like the turbines and every single cycle of the turbine. If your audience is familiar with, like a brain anka critical, see a two cycle and all the way down to the other end of the spectrum, like more fancy silicon after based exchanges, like from full tax systems or T G. And we we we kind of choose a sterling engine as our primary heat h heat engine because it's the simplest heat engine in anyways. It's very reliable. There is a supply and available for IT and and most ably, the maintenance kind of items for IT are much more limited than a turbine would be yeah and you don't have to Operate IT at two thousand recesses were to run uh, unlike a tpv cell, for example.

So I made a little engine in my junior high school of physics class. So it's been not to date myself, but it's been a minute, if memory serves, sterling engines depend on a heat differential, and then they use that to isolate a cylinder type thing back. And for.

come on that I have, I like a toy stirling engine here in my the thousand nine .

hundred and that one has arrived.

Yeah exactly. I mean, in the way work says you can even put this on your coffee mug and I will start running right this so he can buy off amazon if anyone's interested.

Oh, and the sports casts this everybody. It's a bronze wheel attached to to uh disks and essentially if you put heat on the bottom, the wheel will spend .

exactly yeah so the differential between the hot and and the cool and is what laws gas that's inside to expand and then that start spinning the wheel and then I will continuously spin. And this is the simplest form of a starting in is a little bit more complicated than that. But yes, that's kind of how a works. You have a hot end and you have a cool and and the delt between the two as creating that deferential that spends the the engine.

I can't tell for dummling this down too much or IT were really is getting back to like basic principles, bub, between hot rocks and really old early news. IT feels kind of like we're using very elemental tech to power the absolute kind of digital attack and I find that poetic is too strong but but nice in a way like that feels IT fits to me if that exit on .

yeah absolutely. I mean and and this is saying we have at the company is we truly you leave. We have the benefit of hundreds of years and centuries of technology development. And we're standing on the shoulders of giants here because a lot of his technology has been developed before, has been using other applications. And what we're trying to do is, of course, innovate around IT and make IT more useful the power like, as he said, the cutting edge of technology, which is A I today.

So let's talk about the the company a little bit. I knew you guys raised a twenty million to around, uh, April two thousand and twenty four and just in horrod. Sam alne atomic police is so kind of A A murderous role of people who are putting a lot of money into A I makes sense, they are back in your company. I'm curious about how far that money has taken you guys and how close are you to shipping p trees and put you know fire in the map equivalent in the plug into customers.

It's all super lucky to have the support of this amazing group of investors that you said on this journey. And what we've done with this capital is now launched the xop free to the public. So we had a public lawn over a month ago and and a hand. And since then, we had actually super overwhelmed with amount of interest that we've seen for the product. So we have received orders for the next three million units.

So we have to build s stopped, stopped, stop. So many things are at once here. Tell me how much interest we are expecting when you announced the Peter yeah.

when we launched IT, we thought is going to as a couple of years to get to maybe a giggle worth of demand and in a month and a half we could to pull that.

So five x you five digger watts of demand, which is three million units yeah.

exactly. And so for us is not even measured in gig watts, measured in terms of energy. So it's about eighty five gig. What hours that we have to deliver against you .

reminded me of my, of the game, oxygen, not included in which I had to learn all about power grid storage, what hours and over than I forgot media when I stopped playing. But that ticks my brain. yeah. So clearly, demands of the charts have all the the as the interest for p three systems come from the people who you expected. I data senators are even another like demand source that is surprised that a lot no.

I mean, ninety percent of this is data sennans, and I haven't even talk to about the ones that are in the process in the pipeline. So we expect that to double. So we we're seeing more demand and than we we are invisible or even hope for and even in our wild screen. So the plan right now is we are executing against our disorders from our early customers, and we're gonna deploying these units in the field in places like fda and texas in the coming months every months.

Is that is that this year? Or is that like q one twenty five.

hopefully by the end of this year will have some units, but really like Operational like you one twenty five is is worth trend towards.

okay. And how much would A P three cost me if I if I rocked up to the exotic te quarters with my my debit card um how light I get for get one .

good question. yes. So we basically launched IT to the public for seven thousand five hundred dollars per twenty five clote our module so you could buy one for seven thousand five hundred dollars.

I I thought there was going to be another zero on that.

yeah. I mean, if there was, we would never get to the cost generation. No.

no, I I guess I should have run the math to get to one, sir. C, A lot of things, but that does feel very inexpensive. Is there a lot of growth margin in that for you guys?

Yeah, there is a decent amount of growth margin in that. And we also ultimately expect to bring down the cost of building these even harder at only increasing our gross margin but also benefiting ultimately to customers with a cheap er source electricity.

So as used to be A M down your margin's you Better, that's great. Makes the business Better. But a question about these, is there any current revenue into this? Because selling three million units at seven and a half K H stupas business hatts off world on no beef. But i'm here. If there is something that continues a little more set.

like we do have uh software that we ve developed, we charge for an a substantive basis and the software includes the uh basically control software for running the modules, running a project o but also very sophisticated digital twin that allows us to predict the performance of the system and also do predictive and proactive maintenance on the systems. And that's all a testiment to the work that our team of P H. She's been doing on building a very high finality model of the system.

Do you guys need to raise like another hundred million to scale up manufacturing? Because I know you're building these in the states, uh, which by the way. Supply chain risk respective make a lot of sense to me, but IT just feels like you're gna need to have I mean an enormous manufacturing footprint to meet even a fraction of that order.

But yeah, good question. I mean, that's why from a execution perspective, in the early days, we're not doing vertical integration manufacturer or actually partners with leading contract manufacturers, which have OK five hundred thousand square foot facilities or million square oot facilities and building and rapping up with them because what we're optimizing for is bring this product to market because what we understand for our data and our customers is the number one variable for them is time to power.

So how fast can you delivered this technology to me is more important and even how much IT costs. yeah. And so that's what we're optimizing for and that's what we're doing with our contract manufacturing in that work.

Do you know what tech companies love to do, hon, is what they have a variable pricing. And you know IT sounds like given the scale demand that X A while currently has and the fact that is manufacturing rapping, you guys might be able to, at zero to some of these love people, skip head. So i'm curious, is anyone going to pay above, above list to get mogin sales?

Have a good point. Invention people are actually willing to pay. And we seen this in in our own data set with our own consumer up to five hundred percent premium to get access to behind the little power or to get access to power in any form for powering date. And so like as I said at the beginning of of the discussion, the race to win A I knows no cost boundaries.

Well, five. Okay, I know, I know, I know what your thing is correct, but it's just it's crazy to me that, uh, modern personal onest corporations who have been tripping had count cutting back on this offer spent, are willing to pay five x for this. But IT also makes sense to me, is just hard for me to kind of have both in my head the same time sometimes. But that's absolutely insane. And the other thing.

you know, just another start. Me, your audience may notice or may not notice your typical AI search, right? What are using ChatGPT or gool or whatever, is using ten to twenty five times more energy than the third day you are running just a year ago using gool.

So this is super energy hungry. And if you want to have one hundred million users using your A I search or billion, you have you you have now some for ten times more energy or twenty five times of our energy. Yeah so it's insane. An energy demand and energy growth. I don't think anyone's actually fully fAiling the extent of IT.

What that's why I asked you up top, do these numbers look conserve IT? Because to me, i'm looking chart and it's like, okay, I will be annual growth of one point nine percent and unlike but will IT, it's it's a little bit like if you've ever seen a change, people guessing what the economy is going to do and the other guesses are always completely change. They can't model net new things.

They can only be master sage what they know. yeah. So I think we're going to see five, six percent and your growth and it's change everything.

Now actually read a reported while ago that showed that every single prediction about energy markets historically for last fifty years has been wrong. Every one of the well.

this is why I never believe anything mckinsey puts out in their life. By twenty thirty five and had searches for your mom will be worth of five trilling unlike .

and you don't know anything. Always underestimated both the growth and also the technology. Today, data center represent two percent of global emissions if they grow at the rates that the these folks predict, which as we discuss, is not necessarily going to be true, it's going to be underestimated. Data centres are loan twenty thirty will account for ten percent of global editions.

And to put that in perspective, you mention cement earlier, and I pulled up the stacks. I know that cement is an incredible pollution industry. I'd forgotten that cement.

Just the industry therefore is between five and eight percent of global C O to emissions today. So you know this would be essentially up to two x. So so we're onna have to have a lot of the stuff out there in the market. Now I know the demands are I know people are trying to pay up for, but how many p three can you guys actually create and build next year? I don't know if it's twenty or twenty.

Yeah, it's in between. So we're shooting for a couple of thousand for next year and then really trying to rank up at the follow years to get to a corruption run rate about a million and next couple years.

And once once I I bring this to my day, as I say when you say modulate, my mind goes easy to install and set up. So i'm very curious from from the truck with the flog bed and the p three arriving to when I actually had a bad boy turned, how long is that take? Yeah I mean.

this goes back also to the original hypotheses behind the companies realized modular systems have the advantage of number one, because their money can build them in the factory, you can build millions of them and drink down the coker. Number two, the place where a lot of costs over on happening and energy and infrastructure projects is during the construction. And those are costs that you cannot control as like the O M.

So with our system, this is just a install and forget system. We take IT off to the flap, ed, and he put IT down. There's no inside construction. And then like solar panel use, connect electricity together and connect to load and that's all to IT. And that's a huge component of the cost that is taken away as well by doing everything at the factory level.

Why can't I have all of this from my house?

You technically could. Uh, I think we are prioritizing, of course, commercial applications to begin with because there is a lot of demand are on that side and also because customers, consumers, essentially my have chAllenges financing this to begin with. But and one thousand .

five hundred dollars and all sounds so cool. Like I love the idea of, I love the idea of having my own power source is everything about this sits well with me. So to me, i'm like to just cut IT into four bits. Gave me a quarter tended by eight feet. Now just put that out at our weekend house and power off the grid.

Yeah, you could. Yeah, I mean, yeah, definitely. If you have A A house with a yard or and you could just put a couple of these on, you probably don't even need a couple. Frankly, you need one. And that will Carry your entire Operation there.

Actually, this is a question of how much solar energy do I need from the sky to make this work? Because I know works miami, i'm sure work in Austin, texas, east california. But I grow an organ which used to to be a very rainy state, lot of clouds. So would A A peace? Three power set up not have worked there or even in lower light, I can still do a pretty good job.

Yeah so two things. Number one, on organ. Actually east organ is very Sunny.

as probably know organ west don't talk about IT doesn't .

I used to live in a torgan. So where where are you storing an band organ?

Oh, my sister live there. I I group in corvus.

Yeah, great. So east organ, definitely salary. This would work. And there are actually data enders that that's number one. But yes, IT is correct like that. The more solar resource you have available to do, the Better this works and the higher your capacity factor is. So the the more you can use the system. This still works in lower solar areas as well, but you will just be able to use IT for fear and fewer days per year, which means that is not useful as a around the clock three sixty five solution.

But that makes IT in a high sun environment like, let's to say we're in phoenix, something like three hundred days of some year. This effect becomes the equivalent of baseload power.

That's correct. Yeah, this this is something that you could complete on your application with offline, if you wish. So we don't recommend and you completely go upgrade for an application that has a certain love of reliability, will back up or rec requirements. But theoretically, yes, IT is possible. Okay.

I want to wrap with something about american dynamism because I know you is many countries and horrible ds, and they are banging the drum p of reindeer rial zing america, which Frankly, as an american citizen, totally here for by having U. S. Best based manufacturing. To me you guys are making A A story that it's possible. And so i'm kind of curious how hard was IT to find the right counter manufacture onal progress companies and so forth to build p trees and especially because a lot of companies would just build them in mexico or china or you know tomorrow.

yeah, I think for us is very important to build this around space supply chain and us manufacturing. And we made a lot of traders around the materials to make them source able from the U. S. If you will, not only was at the reason, but many other reasons that not us selection of the materials.

But I think ultimately, I wouldn't say he was easier job because at diva, when you talk to people, even people who want to build in the us, they always have china or mexico the back of demand as the next alternative. And we've really, really worked hard to make sure that we can source from the U. S.

Built in the U. S. And and I think is becoming Better, right? As as the american dian diamond fund uh, at Anderson has been kind of pioneering the way on this, bringing back and on sharing more manufacturing at least at the start up scale.

And of course, no, I have got federal level in in bigger scales. And we're seeing more and more opportunities to manufacturer with local cms and local machines shops, and we are seeing more and more supply available for different components. People are trying to recycle existing materials to make them more available and cheaper than what would video equivalent coming out of china. So I I think there is a trend. Air were still quite a ways away from being able to be super cost competitive.

but we're getting there. You know, I just realized going the AI boom second uh second order, which is the pixel subs, the second, second order, the third order, I guess, is going to be the stuff that goes into your propriety tary batteries and people who make medical cases es to hold stuff. And I presume you go are not grinding on solar lenses.

It's cool to see how deeply effect of having manufacturing back on. Is for now the broader american industrial footprint, I hate to say, but IT makes me feel a little optimistic. No.

you should be optimistic. And I think the other thing is, you know, people are worried about the effect of the eye on the job, mark.

And what I can say is if you come and join us and helping power AI, there a lot of jobs that A I cannot do to a and there is going to a lot of Green technology and climate uh related jobs that I think the american population will benefit from and the job market will benefit from and is a good thing you're doing something to to make sure we don't kill the planet for our kids and rackets. Because using char P. T. A couple minutes today.

I forget who did the tweet as someone was like, great, we're gonna boil the earth so that way you can make another derivative image and I was like, okay, that's not fair, but it's highly not wrong. So we have some work to do. Yeah, I know.

Thank you for coming on the show. I really appreciate IT. And when you guys do, you have the first p three set up in place turned on, I want pictures, I want video, I want you to come back because i'm so excited. See how quickly you can scale company in two thousand and twenty three to unveiled a months ago to in the market. It's been quick and all of us.

yeah, thanks so much and definitely will keep you in the loop and thanks so much for having us today.

My pressure, everybody twisted here four days a week, monday, wednesday day. We do news. We also have awesome founders from around the world that can on himself to come talk about what they are building.

I'll see you soon. My name is ox. goodbye.