00:00Let's bring in Paul Meeks for more. He's Managing Director and Head of Technology Research
00:04at Freedom Capital Markets. And when I was reading your research last night, Paul,
00:08a little bit relieved coming up this morning when I saw the Meta headline,
00:12because you're very focused on the real terms footprint of data centers. That's what we're
00:17talking about here. You heard Riley's reporting on the specifics of what Meta has done to secure
00:24future capacity. How much of a bottleneck is that to your mind right now for this sector?
00:30It is absolutely critical of all the bottlenecks. It is the most important. I like what Meta is
00:39doing here, but folks need to realize that if you ramp up nuclear capacity, we're not going to really
00:48see power generation until 2030 earliest, maybe even not until 2032. So what do we do for the next
00:56four to six years? So the immediate draw is probably not gas. But when I look at all of
01:04these companies and we cover the AI hyperscalers and the neoclouds and everybody adjacent to them,
01:11we are looking for their availability for power, their capacity to find power, because it's not
01:20a demand issue. It is a supply issue focused on this particular metric.
01:28Paul, I played you just some of the interview that we conducted with Jensen Wong earlier this week. And
01:34when I was sitting in front of him, you don't really get any sense of anxiety from him, right? Think
01:40about the mechanics of how this transaction works. NVIDIA brings GPUs. Actually, that's probably not
01:46fair. Increasingly, they bring more of the content of the server. But there is an acknowledgement that
01:52something needs to change principally in America. He did go on to talk about the differences between
01:58Europe, Asia and the United States and where we're sourcing energy. Do you get a sense from your
02:03research that the companies you cover, acknowledge the severity of that that deficit right now?
02:10So when they are public facing, particularly somebody like Jensen Wong, who is essentially the
02:16spokesperson for the entire industry, they have to exude optimism. However, behind the scenes,
02:23particularly when I'm talking to companies about my financial models, which of course, the revenues,
02:29and then the follow on cash flow and earnings come from, do you have the power? Yes, they are
02:37anxious. And I think they're actually very anxious.
02:42There will be people watching Bloomberg Tech that work at Meta or in the AI industry. There will be
02:47Meta investors watching this program. And some of these people may never have heard of an Oclo.
02:52Have you had to change the remit and breadth of your coverage, if you say I cover AI data center,
03:00to include future sources of electricity supply?
03:05Yeah, it's really interesting, Ed, that years ago, you know, nobody in my line of work covering
03:11tech sector like I have for decades would be interested in any utility company. It's the antithesis
03:17of tech. They are boring, regulated, slow growth businesses. However, now they've come to the fore.
03:23And of course, these are not just your regular utilities. You know, they're your new era utilities.
03:28But yes, if you are a good analyst, you have to cover the entire supply chain, the entire ecosystem.
03:36And because demand is so robust, we're focusing on supply, absolutely critical. And it's not just
03:44the power. There are physical constraints here, like simply pouring the cement to build the next
03:51data center, which can be a bottleneck, even though it sounds, you know, so old school in a new school
03:58business. But yes, these are some factors that are very, very interesting that people didn't even
04:03conceive of a couple of years ago. Paul, is there an adequate federal level framework regulation
04:12to support the energy requirements of the AI industry in this country?
04:18You know, there is not. And here is my problem. We are still suffering from a lack of solid regulation
04:25for the Internet, because even today in the U.S., the Internet is operating under 1996 legislation
04:32when Bill Clinton was president. And so I'm hoping that we're not too restrictive, right? We need to
04:39embrace our entrepreneurial companies and give them room to roll. But we need to have some guardrails
04:46on everything AI, because what happened last time is we end up abdicating the legislation to the EU
04:55because we didn't have the will to do it ourselves. So we missed that opportunity in the Internet.
05:01Here is the next wave. We need to embrace it and at least come up with some guardrails that are going
05:07to guide all this because there's some important decisions on the federal level to be made.
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