July 24, 2025 • 28 mins
Everywhere you look, it seems like bad news for climate tech. Investments are down, the US government has cut incentives and startups are running out of cash. But venture capitalist Vinod Khosla is still bullish, even though the One Big Beautiful Bill cut an estimated $500 billion in green spending. This week on Zero, Akshat Rathi speaks with Khosla to find out when we can expect to see fusion, whether he’s reconsidering investing in the US and why he still thinks the best clean tech is yet to come.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Hey, it's sucksha. Each week you lend me your ears,
and now I'd like to hear from you. Do you
have a burning question about climate, green tech, or the
future of the planet. Please send your questions to us
in writing or as a voice memo to zero pod
ad Bloomberg dot net and we'll make an episode answering them.
Please do include your name and where you're based. Thank you.
(00:27):
Welcome to Zero I'm Akshatrati. This week how to be
bullish on climate tech. Everywhere you look it seems like
bad news for climate tech. Investments are down, the US
(00:50):
government has cut incentives, and startups are starting to run
out of cash. But some people are still bullish. They
believe that the fundamentals are in place, the solutions are
only getting better, and green tech will continue to get cheaper,
even start to displace fossil fuels. Winnote Cosla is one
of them.
Speaker 2 (01:09):
Mostly in business, people look for lowering the probability of failure,
even if it lowers the.
Speaker 3 (01:17):
Consequences of success.
Speaker 2 (01:20):
My personal entire life is dedicated to I don'twind the
probability of failure, but I want the consequences of success
to be consequential.
Speaker 1 (01:32):
Vinode is as close to Silicon Valley Royalty as you
can get. In the nineteen eighties, he started Sun Microsystems,
which was eventually acquired by Oracle in twenty ten for
seven point four billion dollars. In two thousand and four,
he founded Cosla Ventures, a firm that has backed big
tech success stories like Door, dash Stripe, and Instacart. He
(01:54):
also invests in climate startups such as Impossible Foods and
Commonwealth Fusion Systems. Though Winnowed was a longtime Republican voter,
last year before the US elections, he came out in
support for Kamala Harris. Now he remains skeptical of the
Trump administration, but he is open minded about what Donald
(02:15):
Trump could do and is doing for clean energy. That's despite,
of course, the One Big Beautiful Bill, which has reversed
many of the climate policies and incentives that the US
government used to have. Regular listeners of the podcast will
remember my conversation with Winnoud last year where he talked
about his feud with Elon Musk before the twenty twenty
(02:36):
four elections. Last week, I caught up with Winnod again
for a live conversation at the Bloomberg Green event in
Seattle to find out when we can expect to see fusion,
whether he is reconsidering investing in the US, and why
he still thinks the best clean tech is yet to come.
(02:57):
Good morning, Winnoults. We are in uta Seattle. There's going
to be a lot of discussion today about climate change,
about what needs to be done to tackle it. But
we should start with the headline, which is the tax
and spending bill that present from signed into law. It's
going to reduce clean energy spending by one estimate, by
five hundred billion dollars over the next five years, and
(03:20):
as a result, all estimates show that the US is
going to miss its twenty to thirty climate goals. There
is much that climate advocates don't like.
Speaker 3 (03:28):
About the bill.
Speaker 1 (03:29):
But you wrote in a recent op ed that you
are happy that the tax credits that were going to
win solar and electric vehicles have been cut.
Speaker 3 (03:38):
Why because there's better uses for the money.
Speaker 2 (03:42):
Very simply, you know, these subsidies once they start perpetuate,
and there isn't Energy is a serious business. You can't
subsidize all of energy at scale. So when do you
stop them? I think by the time there are a
few percent less than five percent of the market they're serving.
(04:07):
Subsidies in every industry should always start be high, be
declining over time, and by the time there are a
few percent of a segment, they should be stopped and
the money should go to better uses.
Speaker 1 (04:22):
The Trump administration has made a clear doesn't care very
much about climate change. But the US Congress before the
bill passed, did protect some clean energy tax credits, so
there are tax credits that remain for nuclear, for geothermal.
Do you think those tax credits would be enough to
get nuclear? Well, nuclear, traditional nuclear is already at a
(04:43):
high percentage, but we are talking about advanced nuclear, which
doesn't really exist today, and geothermal, which again traditional version
is in small amounts, but advanced geothermal doesn't really exist today.
Do you think the tax prends that we do have
in the bill will be enough to get nuclear and
geothermal to the lef you want?
Speaker 3 (05:01):
So each technology is a little bit different.
Speaker 2 (05:04):
Nuclear problem isn't that it doesn't have enough subsidies. Nuclear's
problem is nimbiism has held it back. Every nuclear project
takes ten years longer than you think it well, because
people like Gaine fundas so the th I overjoke. Environmentalists
(05:28):
got more core plants to be built in this country
than anybody else by stopping nuclear in the seventies and eighties,
and that gives very unfortunate because they're not thoughtful about
what's the replacement. So nuclear's problem is nimbiism super hot
geo thermal. There's old geothermal, and I include companies like
(05:54):
Fervo and others in old geothermal. Essentially below what's called
super radical steam. Steam above a certain temperature, which is
around four hundred degrees has way more energy content. So
four hundred and fifty degrees sanigrade well will have five
times the amount of energy that are two hundred and
(06:16):
fifty degrees sandi grade world will and we have to
be realistic about it. So the problem isn't geothermal. The
problem is the economics of geothermal. So subsidies will help,
but what really helps is developing technology to drill to
four hundred and fifty degrees because normal metal drill bits
(06:37):
collapse well before that temperature. So it's getting to the
right temperature and the right technical breakthroughs, and nobody's doing
that today. We have a couple of efforts in our
portfolio hard efforts to go at that.
Speaker 3 (06:53):
But if you do that, you.
Speaker 2 (06:55):
Don't have to worry about climate because geotherumal will be
cheaper than natural gas. Unsubsidized subsidies will help. But in
fact it's really not a problem. In Joethumbo, it's just
not enough people have worked on the hard problem. They've
worked on hand baby problems.
Speaker 1 (07:15):
And so let's take them one by one because you've
invested in nuclear.
Speaker 2 (07:19):
By the way, we didn't talk about fusion, which are
exactly very bullish on. I think five years from now
nobody will be talking about alternatives to fusion as a
power source for the planet for the next fifty years.
Speaker 1 (07:34):
Well, you were on the podcast last year and you
said in five years from twenty twenty four, there will
be a nuclear fusion plant. It's four years now, left.
Speaker 3 (07:41):
Okay, there will be a new Clepe.
Speaker 2 (07:42):
Well no, I think I very precisely said nobody will
debate whether fusion will work, which means we will have
demonstrated positive energy and we will have very clear idea
of the economic subffusion plan and scaling of fusion plans.
All those are very very doable. I expect it'll happen
(08:04):
much before twenty twenty eight or twenty twenty nine, five
years from last year would be twenty twenty nine. I'm
pretty sure one of the dozen reasonable efforts will prove
out that it is going to be a viable energy source.
And there's a dozen efforts. Only one needs to work
to solve the planet's energy problem. Only one geothermal technology
(08:28):
needs to work. And I'm a big fan of nuclear too,
just it has these social problems of nimbiaism.
Speaker 1 (08:36):
We are talking here within very tight timelines. So if
you go back to the bill again, estimates show that
price of electricity is going to go up as a
result of these tax credit cuts, but also because of
shortages of equipment, simple stuff like transformers, like cables, things
that we've covered here at bloombergreen that are becoming a
(08:57):
bottleneck to build out the grid for all the electricity demand,
especially from AI that's coming. So if electricity prices go up,
building power regardless of where it's coming from new technologies,
all technologies is hard. Do you think that becomes the
bottleneck for the AI ambitions that America has. It's not researchers,
(09:20):
it's not startups, it's not investors putting money.
Speaker 3 (09:22):
I think you're confusing a number of things.
Speaker 2 (09:26):
The solar subsidies have nothing to do with electricity prices
going up. Right, Solar subsidies will slow down the deployment
of solar, agree, but it's still cheaper for intermittent power
than any other source of energy. So if you're trying
(09:46):
to use intermittent power and come up with clever strategies,
for example, production of hydrogen can be done with intermittent power.
You want the cheapest power, You want solar and wind
to produce hydrogen. You don't want solar and wind to
power a home because you want to watch the football
(10:06):
game when it's on, not when the wind's blowing or
the sun shining. This is silliness. There's related concepts. Net
zero is the worst idea I've ever heard for homes,
but environmental is keep pushing this bad, uneconomic idea as
if economics don't matter.
Speaker 1 (10:24):
By prices of electricity will go up, not just because
of the tax cries, but because of all these bottlenecks
to them being so.
Speaker 2 (10:29):
I think the price of electricity will go up because
the demand has surprised us, and demand projections for the
next five ten years have surprised us with the advent
of AI.
Speaker 3 (10:43):
Yeah, is two years old.
Speaker 2 (10:45):
You know, AI didn't have any deployment two years ago
or minimal deployment, and suddenly it's going to be the
large consumer of power. So the change in demand as
what is called the problem now nimbiism like grid again
is going to be a problem. But data centers don't
(11:08):
need the grid. You can put the data center where
the power sources. So I do think grid helps. But
the demand problem is created by the projected increase in
demand from AI data centers, which can be located near
power sources.
Speaker 1 (11:27):
The challenge of the AI data centers is that they
want power all the time, and so you're going to
build solar next to the data center, you're not going
to be able to run it all the time. That's
why they're relying on gas, which is getting harder to
build because gas turbines are difficult. So the question is
do you worry about the fact that America's competitiveness on
AI will be held back because if energy issues broadly,
(11:50):
not just renewables or not.
Speaker 2 (11:52):
I do worry talked about data centers a lot. I
think that to that is scaling capacity. I do think
super Hart geothermal is a perfect technology for that twenty
thirty five on it will all be fusion is the
scaling technology and super Hart geothermal hopefully nuclear too, but
(12:17):
again citing nuclear is very hard. But you can put
a data center right next to a nuclear plant without
needing a grade, because that's the right way to do data.
So data center demand is different because it doesn't put
as much of attax on the grade if.
Speaker 1 (12:34):
It's not attached to the grid and if it's attached
to a powerline on its own or close by.
Speaker 3 (12:38):
Yeah.
Speaker 1 (12:38):
Now, you invest in a lot of companies that are
American that are started here, that are startups over here.
Those companies are created by people often who have come
to this country like you came to this country. And
there have been over the past six months difficulties. University
funding has been cut. This bill cuts a lot of
science funding. Do you worry that the level of ideas
(13:00):
that you are able to get hold off to be
able to invest in these companies is going to reduce
and that again affects America's competitiveness.
Speaker 3 (13:09):
Look, most of you should.
Speaker 2 (13:10):
Now I am vehemently against Trump and the current administration
and its value system. So you know, even though I
agree with certain things they've done, I mostly disagree with
their policies, immigration being one of them. They will shut
down the import of talent, which is the key to growth.
(13:33):
So if I were to look at and I had
an op ed in The Economist a week ago, and
just this week Chris Wright, the Energy Secretary, had another
op ed.
Speaker 3 (13:46):
He said, all we need is energy.
Speaker 2 (13:48):
I do think we need energy, but we need more
importantly talent, and talent they're shutting off.
Speaker 3 (13:56):
With their approach to immigration.
Speaker 2 (13:59):
Even the people who will legally immigrate don't like a
hostile environment to go into. So we will reduce talented
immigration of PhDs and people equipped to solve climate and
other technology problems into this country. Unfortunately, what will you
do as a result.
Speaker 1 (14:19):
You're an investor, You invest in companies, You have capital
that you want to put towards these ideas. Do you
just go outside America?
Speaker 3 (14:25):
Well?
Speaker 2 (14:26):
Absolutely, I look, people are anyway going outside America, and
so most companies have multiple locations within America and outside
America to go.
Speaker 3 (14:38):
Seek the talent.
Speaker 2 (14:40):
When Russia became a pariah with the Ukraine attack, people
set up new offices in Turkey to get Russian scientists
to move from Moscow to Turkey so they could take
advantage of them, because those scientists didn't want to work
aligned with put.
Speaker 3 (14:59):
In this regime.
Speaker 2 (15:00):
So talent will flow to wherever they're welcomed, and they're
very much in human. I mean, there's some of the
salaries in the AI space two hundred and fifty million
dollars a year, million dollars a day. Those numbers aren't
unheard of. In fact, they're sort of becoming more common
than I'd like to see. But talent drives everything, maybe
(15:24):
even more than energy.
Speaker 1 (15:25):
And so are you starting to do that? Are you
looking at startups in other countries?
Speaker 2 (15:28):
And well, we've always looked at startups in all countries.
I think the bulka of our effort is in the
US still and will continue to be, But we look
at talent everywhere.
Speaker 1 (15:41):
And where do you think are the emerging hubs?
Speaker 2 (15:43):
Well leaving aside China because I'm very hawkish on China.
I think there's some evil regimes in the on this planet.
India's great hub, Canada's great hub. You know, there's a
lot a lot of talent in Canada. AI started around
Toronto in that area, So a lot of talent there,
(16:08):
but frankly, talent everywhere is being repurposed into this AI domain.
Speaker 1 (16:19):
After the break, I talked with Vinode about the pace
of innovation and the consequences of failure, and Hey, if
you're finding this episode insightful, please take a moment to
rate and review the show on Apple Podcasts and Spotify.
Your feedback really matters and helps new listeners discover the show.
Thank you. If you stick to climate tech, the level
(16:47):
of investment has been going down. Just total investment in
climate tech has been going down for quite some years.
The latest figures that we have for the first half
of this year is thirteen point two billion dollars invested
in climate tech. That's down about nineteen percent. You invest
in a lot more than climate Has your own spending
in climate tech gone down as well.
Speaker 3 (17:08):
No, I think it's been pretty consistent.
Speaker 2 (17:10):
The thing you have to forget is these aggregated numbers
are mostly irrelevant to somebody in my part of the
climate world, which is breakthrough technologies. So my personal view,
unless you have breakthrough technologies, you're not going to get
broad deployment. Even if you did regulation in the EU
(17:32):
and you got shut down all their steel mills. They're
going to get steel from somewhere, and that's not going
to come from a country that's adapted green steel at
twice the price. So most of the efforts on steel
are relatively poor efforts. In Sweden, there's a green steel effort,
(17:54):
there's a couple of steel green steel efforts in this area.
Speaker 3 (17:58):
I think they're generally poor effort.
Speaker 2 (18:00):
Why because when they're successful, they are not cheaper than
regular steel. We have efforts, it was only attempt is
to get cheaper than regular steel and.
Speaker 3 (18:13):
Have low carbon emissions.
Speaker 2 (18:15):
And it's an end not or, and that's what's key
for broad deployment of any of these technologies, and that
doesn't come for free. We have a much higher risk
of failing because we are taking much more technical risk.
In stel we're taking way more technical risk than anybody.
(18:37):
But I'm pretty certain we have steel saltd or steel
will be cheaper than cold based steel in this country
or in China.
Speaker 3 (18:47):
If that's the case, there's.
Speaker 2 (18:48):
No reason, whether you care about climate or not, to
build anything but the cheapest steel, and.
Speaker 3 (18:55):
We can use the cheapest ores.
Speaker 2 (18:57):
The enrichment doors are what matter because they're cheap and
they make your steel cheaper. Same thing in cemac or
cement plants and we are repurposing cement are actually cost
less per ton for far lower carbon, but the far
(19:18):
lower carbon comes for free. And that is my point.
Taking more technical risk is not about billions. It's about
millions taking small amounts of money on projects that most
likely will fail, but if they succeed, they change the
world versus things that are incrementally better, are better than
(19:41):
anything else, but not good enough to compete with fossil.
Speaker 1 (19:45):
So I want to come to breakthrough technologies. But there's
one point that you make. So in Europe ED you
talk about green steel, green cement, you talk about geothermal
and nuclear. But these products require a market that you know,
if it's cheaper than the alternate, you don't need to
work sell. But you are also entering a space in
(20:06):
the Trump administration that is biasing the market for more carbon.
So there are tax credits for oil and gas drilling,
the tax credits for metallurgical coal in this bill. Now,
venture capitalists, not just you, but others have told me, like,
we don't invest in companies based on government policy. We
like the companies to succeed on their own. But when
(20:27):
the market is being biased for carbon, how do you complete?
Speaker 2 (20:31):
No question, the fossil industry is on the inn in Washington, DC,
and they've received brillions of dollars of subsidies over time,
whether you're talking about a favorable tax policy like MLPs
or master limited partnerships or advantage tax treatment, or the
(20:53):
billions and billions or one hundred billions we spend providing
six security for oil in the mid East. That's a
subsidy because we are providing security to oil lanes. Those
are all subsidies in my view, But the current administration
won't acknowledge that.
Speaker 3 (21:14):
So what can you do?
Speaker 1 (21:17):
Then let's come to the breakthrough technology is part because
one reason you won't invest in a company is it's
not going to be profitable. But another and a more
intriguing explanation, this is something you've talked about, but also
your fellow Silicon Valley billionaire Peter Thiel, has talked about
that regardless of the politics, the pace of truly transformational
(21:37):
breakthroughs in science and technology has been slowing down.
Speaker 3 (21:41):
Do you agree?
Speaker 2 (21:46):
I do generally agree, and people are looking for easier
So mostly in business, people look for lowering the probability
of failure, even if it lowers.
Speaker 3 (22:01):
The consequences of success.
Speaker 2 (22:04):
My personal entire life is dedicated to I don't mind
the probability of failure, but I want the consequences of
success to be consequential. If have ten efforts and one
of them produces cheaper stale, it makes up for all
the other losses. Now, this is the technology that not
(22:28):
only is the steal for the world that's low carbon,
but it's also American manufacturing, prowess in exports, and all
the good things any traditional business person would recognize. I
think we have that and still done. I think we
have that done in Seman. I think fusion will get there.
(22:50):
Very likely super hot geothermal will get there. These are
core technologies. And you know, as much as I'm not
a fan of Alan's a good job with EVS, there's
no chance any policy would have achieved what he achieved
by just betting on EVS.
Speaker 1 (23:10):
You know, you talked about some environmentalists who have you know,
stop nuclear plants and as a result have ended up
building more coal power plants. You know, you could break
up the environmental movement in many parts or you know,
different philosophies. One of the philosophies is what is yours,
which is you have breakthrough technologies, and because they are cheaper,
the market for those technologies wins out. There's another philosophy,
(23:33):
which is we already have most of the technologies, not
all of them, but most of the technologies that we need.
We just need to build them out and build them
out quickly. Now, if you are worried about breakthroughs declining
or slowing down, would you be betting on well, let's
double down on what exists and deploy it.
Speaker 2 (23:51):
No, that's a silly notion, and a few people have
pushed that idea, and it's a bad idea. In fact,
two years ago, for I think twenty twenty two ad
an opadd and economies the fundamentally argue that to get
(24:12):
to zero carbon emissions by twenty fifty, we'd have to
give up the goal, give up the goal for lower
emissions by twenty thirty, because if you're deploying poor technologies.
More broadly, we have less money to deploy breakthrough technologies
and less money to invest in breakthrough technologies, So we
(24:35):
can shoot for twenty thirty goals or twenty fifty much
better for the planet, and of course we don't know
how much time we have on the planet before we
get exponential increase in temperatures and climate effects. It's better
to develop the right technologies and deploy them broadly, then
(24:58):
take what we have and deploy them. We saw the
disaster in the Spain's electric grid not very long ago.
That can happen here too, so I do think we
need to be very thoughtful and very businesslike. Even if
we do it, India is not going to do it today.
(25:20):
India is one of the fastest growing solar markets, but
coal is growing faster. More coal is being deployed than
ever being deployed before, and that same is true I
think similarly of China. So we can look at the
solar numbers which have been climbing, but it's because total
demand for energy is large, and some things work with
(25:44):
intermittent power, and it's cheaper to do intimatent power, so we.
Speaker 3 (25:49):
Should do that with intermittent power. Other things have to
have reliable power.
Speaker 1 (25:54):
So the Spain and Portugual are spectacular examples of country
wide blackout and you know, make headlines around the world.
But there's an OECD ranking of countries that suffer outages
and the number of hours that are lost because of blackouts.
The US ranks five ranks higher than Spain when it
comes to just reliability of power. But let's take the
(26:15):
last question or times running out. What do you think
is the kind of lasting damage that will come from
this Trump administration we've had this is the second term,
and if there is a more climate positive president at
some point, what can be undone?
Speaker 2 (26:31):
Well, I think the biggest damage is the slowdown in
the import of talent from all parts of the world.
That's immigration that reduces our ability to have the kinds
of breakthroughs that make the economics possible, that will give
us the technologies that can solve climate and economic growth together.
(26:55):
Thank you very not, Thank you, Thank you everybody.
Speaker 1 (27:07):
And thank you for listening to zero. And now for
the sound of the week. If you haven't guessed already,
that is the sound of a mosquito. Around the world,
mosquito bond illnesses are becoming more prevalent as temperatures rise.
(27:29):
In Singapore, scientists are releasing lap bread mosquitoes into the
wild to help combat the spread of Dengi fever. Read
more about the project than others like it on Bloomberg
dot com. If you like this episode, please take a
moment to rate and review the show on Apple Podcasts
and Spotify. Share this episode with a friend or with
someone who's too scared of failure. This episode was produced
(27:52):
by Oscar boyd Our. Theme music is composed by Wondering
Special thanks to Brian Kahan, Michelle ma Eleanor Harrison dungatesec
Beck Showan Wagner, mech Sabo, Abbi Danzig, and Crystal concre
ras I am Akshatrati back soon. Hey, it's Suksha. Each
(28:26):
week you lend me your ears, and now I'd like
to hear from you. Do you have a burning question
about climate, green tech, or the future of the planet.
Please send your questions to us in writing or as
a voice memo to zero pod ad Bloomberg dot net
and we'll make an episode answering them. Please do include
your name and where you're based. Thank you.
Hey, it's sucksha. Each week you lend me your ears,
and now I'd like to hear from you. Do you
have a burning question about climate, green tech, or the
future of the planet. Please send your questions to us
in writing or as a voice memo to zero pod
ad Bloomberg dot net and we'll make an episode answering them.
Please do include your name and where you're based. Thank you.
(00:27):
Welcome to Zero I'm Akshatrati. This week how to be
bullish on climate tech. Everywhere you look it seems like
bad news for climate tech. Investments are down, the US
(00:50):
government has cut incentives, and startups are starting to run
out of cash. But some people are still bullish. They
believe that the fundamentals are in place, the solutions are
only getting better, and green tech will continue to get cheaper,
even start to displace fossil fuels. Winnote Cosla is one
of them.
Speaker 2 (01:09):
Mostly in business, people look for lowering the probability of failure,
even if it lowers the.
Speaker 3 (01:17):
Consequences of success.
Speaker 2 (01:20):
My personal entire life is dedicated to I don'twind the
probability of failure, but I want the consequences of success
to be consequential.
Speaker 1 (01:32):
Vinode is as close to Silicon Valley Royalty as you
can get. In the nineteen eighties, he started Sun Microsystems,
which was eventually acquired by Oracle in twenty ten for
seven point four billion dollars. In two thousand and four,
he founded Cosla Ventures, a firm that has backed big
tech success stories like Door, dash Stripe, and Instacart. He
(01:54):
also invests in climate startups such as Impossible Foods and
Commonwealth Fusion Systems. Though Winnowed was a longtime Republican voter,
last year before the US elections, he came out in
support for Kamala Harris. Now he remains skeptical of the
Trump administration, but he is open minded about what Donald
(02:15):
Trump could do and is doing for clean energy. That's despite,
of course, the One Big Beautiful Bill, which has reversed
many of the climate policies and incentives that the US
government used to have. Regular listeners of the podcast will
remember my conversation with Winnoud last year where he talked
about his feud with Elon Musk before the twenty twenty
(02:36):
four elections. Last week, I caught up with Winnod again
for a live conversation at the Bloomberg Green event in
Seattle to find out when we can expect to see fusion,
whether he is reconsidering investing in the US, and why
he still thinks the best clean tech is yet to come.
(02:57):
Good morning, Winnoults. We are in uta Seattle. There's going
to be a lot of discussion today about climate change,
about what needs to be done to tackle it. But
we should start with the headline, which is the tax
and spending bill that present from signed into law. It's
going to reduce clean energy spending by one estimate, by
five hundred billion dollars over the next five years, and
(03:20):
as a result, all estimates show that the US is
going to miss its twenty to thirty climate goals. There
is much that climate advocates don't like.
Speaker 3 (03:28):
About the bill.
Speaker 1 (03:29):
But you wrote in a recent op ed that you
are happy that the tax credits that were going to
win solar and electric vehicles have been cut.
Speaker 3 (03:38):
Why because there's better uses for the money.
Speaker 2 (03:42):
Very simply, you know, these subsidies once they start perpetuate,
and there isn't Energy is a serious business. You can't
subsidize all of energy at scale. So when do you
stop them? I think by the time there are a
few percent less than five percent of the market they're serving.
(04:07):
Subsidies in every industry should always start be high, be
declining over time, and by the time there are a
few percent of a segment, they should be stopped and
the money should go to better uses.
Speaker 1 (04:22):
The Trump administration has made a clear doesn't care very
much about climate change. But the US Congress before the
bill passed, did protect some clean energy tax credits, so
there are tax credits that remain for nuclear, for geothermal.
Do you think those tax credits would be enough to
get nuclear? Well, nuclear, traditional nuclear is already at a
(04:43):
high percentage, but we are talking about advanced nuclear, which
doesn't really exist today, and geothermal, which again traditional version
is in small amounts, but advanced geothermal doesn't really exist today.
Do you think the tax prends that we do have
in the bill will be enough to get nuclear and
geothermal to the lef you want?
Speaker 3 (05:01):
So each technology is a little bit different.
Speaker 2 (05:04):
Nuclear problem isn't that it doesn't have enough subsidies. Nuclear's
problem is nimbiism has held it back. Every nuclear project
takes ten years longer than you think it well, because
people like Gaine fundas so the th I overjoke. Environmentalists
(05:28):
got more core plants to be built in this country
than anybody else by stopping nuclear in the seventies and eighties,
and that gives very unfortunate because they're not thoughtful about
what's the replacement. So nuclear's problem is nimbiism super hot
geo thermal. There's old geothermal, and I include companies like
(05:54):
Fervo and others in old geothermal. Essentially below what's called
super radical steam. Steam above a certain temperature, which is
around four hundred degrees has way more energy content. So
four hundred and fifty degrees sanigrade well will have five
times the amount of energy that are two hundred and
(06:16):
fifty degrees sandi grade world will and we have to
be realistic about it. So the problem isn't geothermal. The
problem is the economics of geothermal. So subsidies will help,
but what really helps is developing technology to drill to
four hundred and fifty degrees because normal metal drill bits
(06:37):
collapse well before that temperature. So it's getting to the
right temperature and the right technical breakthroughs, and nobody's doing
that today. We have a couple of efforts in our
portfolio hard efforts to go at that.
Speaker 3 (06:53):
But if you do that, you.
Speaker 2 (06:55):
Don't have to worry about climate because geotherumal will be
cheaper than natural gas. Unsubsidized subsidies will help. But in
fact it's really not a problem. In Joethumbo, it's just
not enough people have worked on the hard problem. They've
worked on hand baby problems.
Speaker 1 (07:15):
And so let's take them one by one because you've
invested in nuclear.
Speaker 2 (07:19):
By the way, we didn't talk about fusion, which are
exactly very bullish on. I think five years from now
nobody will be talking about alternatives to fusion as a
power source for the planet for the next fifty years.
Speaker 1 (07:34):
Well, you were on the podcast last year and you
said in five years from twenty twenty four, there will
be a nuclear fusion plant. It's four years now, left.
Speaker 3 (07:41):
Okay, there will be a new Clepe.
Speaker 2 (07:42):
Well no, I think I very precisely said nobody will
debate whether fusion will work, which means we will have
demonstrated positive energy and we will have very clear idea
of the economic subffusion plan and scaling of fusion plans.
All those are very very doable. I expect it'll happen
(08:04):
much before twenty twenty eight or twenty twenty nine, five
years from last year would be twenty twenty nine. I'm
pretty sure one of the dozen reasonable efforts will prove
out that it is going to be a viable energy source.
And there's a dozen efforts. Only one needs to work
to solve the planet's energy problem. Only one geothermal technology
(08:28):
needs to work. And I'm a big fan of nuclear too,
just it has these social problems of nimbiaism.
Speaker 1 (08:36):
We are talking here within very tight timelines. So if
you go back to the bill again, estimates show that
price of electricity is going to go up as a
result of these tax credit cuts, but also because of
shortages of equipment, simple stuff like transformers, like cables, things
that we've covered here at bloombergreen that are becoming a
(08:57):
bottleneck to build out the grid for all the electricity demand,
especially from AI that's coming. So if electricity prices go up,
building power regardless of where it's coming from new technologies,
all technologies is hard. Do you think that becomes the
bottleneck for the AI ambitions that America has. It's not researchers,
(09:20):
it's not startups, it's not investors putting money.
Speaker 3 (09:22):
I think you're confusing a number of things.
Speaker 2 (09:26):
The solar subsidies have nothing to do with electricity prices
going up. Right, Solar subsidies will slow down the deployment
of solar, agree, but it's still cheaper for intermittent power
than any other source of energy. So if you're trying
(09:46):
to use intermittent power and come up with clever strategies,
for example, production of hydrogen can be done with intermittent power.
You want the cheapest power, You want solar and wind
to produce hydrogen. You don't want solar and wind to
power a home because you want to watch the football
(10:06):
game when it's on, not when the wind's blowing or
the sun shining. This is silliness. There's related concepts. Net
zero is the worst idea I've ever heard for homes,
but environmental is keep pushing this bad, uneconomic idea as
if economics don't matter.
Speaker 1 (10:24):
By prices of electricity will go up, not just because
of the tax cries, but because of all these bottlenecks
to them being so.
Speaker 2 (10:29):
I think the price of electricity will go up because
the demand has surprised us, and demand projections for the
next five ten years have surprised us with the advent
of AI.
Speaker 3 (10:43):
Yeah, is two years old.
Speaker 2 (10:45):
You know, AI didn't have any deployment two years ago
or minimal deployment, and suddenly it's going to be the
large consumer of power. So the change in demand as
what is called the problem now nimbiism like grid again
is going to be a problem. But data centers don't
(11:08):
need the grid. You can put the data center where
the power sources. So I do think grid helps. But
the demand problem is created by the projected increase in
demand from AI data centers, which can be located near
power sources.
Speaker 1 (11:27):
The challenge of the AI data centers is that they
want power all the time, and so you're going to
build solar next to the data center, you're not going
to be able to run it all the time. That's
why they're relying on gas, which is getting harder to
build because gas turbines are difficult. So the question is
do you worry about the fact that America's competitiveness on
AI will be held back because if energy issues broadly,
(11:50):
not just renewables or not.
Speaker 2 (11:52):
I do worry talked about data centers a lot. I
think that to that is scaling capacity. I do think
super Hart geothermal is a perfect technology for that twenty
thirty five on it will all be fusion is the
scaling technology and super Hart geothermal hopefully nuclear too, but
(12:17):
again citing nuclear is very hard. But you can put
a data center right next to a nuclear plant without
needing a grade, because that's the right way to do data.
So data center demand is different because it doesn't put
as much of attax on the grade if.
Speaker 1 (12:34):
It's not attached to the grid and if it's attached
to a powerline on its own or close by.
Speaker 3 (12:38):
Yeah.
Speaker 1 (12:38):
Now, you invest in a lot of companies that are
American that are started here, that are startups over here.
Those companies are created by people often who have come
to this country like you came to this country. And
there have been over the past six months difficulties. University
funding has been cut. This bill cuts a lot of
science funding. Do you worry that the level of ideas
(13:00):
that you are able to get hold off to be
able to invest in these companies is going to reduce
and that again affects America's competitiveness.
Speaker 3 (13:09):
Look, most of you should.
Speaker 2 (13:10):
Now I am vehemently against Trump and the current administration
and its value system. So you know, even though I
agree with certain things they've done, I mostly disagree with
their policies, immigration being one of them. They will shut
down the import of talent, which is the key to growth.
(13:33):
So if I were to look at and I had
an op ed in The Economist a week ago, and
just this week Chris Wright, the Energy Secretary, had another
op ed.
Speaker 3 (13:46):
He said, all we need is energy.
Speaker 2 (13:48):
I do think we need energy, but we need more
importantly talent, and talent they're shutting off.
Speaker 3 (13:56):
With their approach to immigration.
Speaker 2 (13:59):
Even the people who will legally immigrate don't like a
hostile environment to go into. So we will reduce talented
immigration of PhDs and people equipped to solve climate and
other technology problems into this country. Unfortunately, what will you
do as a result.
Speaker 1 (14:19):
You're an investor, You invest in companies, You have capital
that you want to put towards these ideas. Do you
just go outside America?
Speaker 3 (14:25):
Well?
Speaker 2 (14:26):
Absolutely, I look, people are anyway going outside America, and
so most companies have multiple locations within America and outside
America to go.
Speaker 3 (14:38):
Seek the talent.
Speaker 2 (14:40):
When Russia became a pariah with the Ukraine attack, people
set up new offices in Turkey to get Russian scientists
to move from Moscow to Turkey so they could take
advantage of them, because those scientists didn't want to work
aligned with put.
Speaker 3 (14:59):
In this regime.
Speaker 2 (15:00):
So talent will flow to wherever they're welcomed, and they're
very much in human. I mean, there's some of the
salaries in the AI space two hundred and fifty million
dollars a year, million dollars a day. Those numbers aren't
unheard of. In fact, they're sort of becoming more common
than I'd like to see. But talent drives everything, maybe
(15:24):
even more than energy.
Speaker 1 (15:25):
And so are you starting to do that? Are you
looking at startups in other countries?
Speaker 2 (15:28):
And well, we've always looked at startups in all countries.
I think the bulka of our effort is in the
US still and will continue to be, But we look
at talent everywhere.
Speaker 1 (15:41):
And where do you think are the emerging hubs?
Speaker 2 (15:43):
Well leaving aside China because I'm very hawkish on China.
I think there's some evil regimes in the on this planet.
India's great hub, Canada's great hub. You know, there's a
lot a lot of talent in Canada. AI started around
Toronto in that area, So a lot of talent there,
(16:08):
but frankly, talent everywhere is being repurposed into this AI domain.
Speaker 1 (16:19):
After the break, I talked with Vinode about the pace
of innovation and the consequences of failure, and Hey, if
you're finding this episode insightful, please take a moment to
rate and review the show on Apple Podcasts and Spotify.
Your feedback really matters and helps new listeners discover the show.
Thank you. If you stick to climate tech, the level
(16:47):
of investment has been going down. Just total investment in
climate tech has been going down for quite some years.
The latest figures that we have for the first half
of this year is thirteen point two billion dollars invested
in climate tech. That's down about nineteen percent. You invest
in a lot more than climate Has your own spending
in climate tech gone down as well.
Speaker 3 (17:08):
No, I think it's been pretty consistent.
Speaker 2 (17:10):
The thing you have to forget is these aggregated numbers
are mostly irrelevant to somebody in my part of the
climate world, which is breakthrough technologies. So my personal view,
unless you have breakthrough technologies, you're not going to get
broad deployment. Even if you did regulation in the EU
(17:32):
and you got shut down all their steel mills. They're
going to get steel from somewhere, and that's not going
to come from a country that's adapted green steel at
twice the price. So most of the efforts on steel
are relatively poor efforts. In Sweden, there's a green steel effort,
(17:54):
there's a couple of steel green steel efforts in this area.
Speaker 3 (17:58):
I think they're generally poor effort.
Speaker 2 (18:00):
Why because when they're successful, they are not cheaper than
regular steel. We have efforts, it was only attempt is
to get cheaper than regular steel and.
Speaker 3 (18:13):
Have low carbon emissions.
Speaker 2 (18:15):
And it's an end not or, and that's what's key
for broad deployment of any of these technologies, and that
doesn't come for free. We have a much higher risk
of failing because we are taking much more technical risk.
In stel we're taking way more technical risk than anybody.
(18:37):
But I'm pretty certain we have steel saltd or steel
will be cheaper than cold based steel in this country
or in China.
Speaker 3 (18:47):
If that's the case, there's.
Speaker 2 (18:48):
No reason, whether you care about climate or not, to
build anything but the cheapest steel, and.
Speaker 3 (18:55):
We can use the cheapest ores.
Speaker 2 (18:57):
The enrichment doors are what matter because they're cheap and
they make your steel cheaper. Same thing in cemac or
cement plants and we are repurposing cement are actually cost
less per ton for far lower carbon, but the far
(19:18):
lower carbon comes for free. And that is my point.
Taking more technical risk is not about billions. It's about
millions taking small amounts of money on projects that most
likely will fail, but if they succeed, they change the
world versus things that are incrementally better, are better than
(19:41):
anything else, but not good enough to compete with fossil.
Speaker 1 (19:45):
So I want to come to breakthrough technologies. But there's
one point that you make. So in Europe ED you
talk about green steel, green cement, you talk about geothermal
and nuclear. But these products require a market that you know,
if it's cheaper than the alternate, you don't need to
work sell. But you are also entering a space in
(20:06):
the Trump administration that is biasing the market for more carbon.
So there are tax credits for oil and gas drilling,
the tax credits for metallurgical coal in this bill. Now,
venture capitalists, not just you, but others have told me, like,
we don't invest in companies based on government policy. We
like the companies to succeed on their own. But when
(20:27):
the market is being biased for carbon, how do you complete?
Speaker 2 (20:31):
No question, the fossil industry is on the inn in Washington, DC,
and they've received brillions of dollars of subsidies over time,
whether you're talking about a favorable tax policy like MLPs
or master limited partnerships or advantage tax treatment, or the
(20:53):
billions and billions or one hundred billions we spend providing
six security for oil in the mid East. That's a
subsidy because we are providing security to oil lanes. Those
are all subsidies in my view, But the current administration
won't acknowledge that.
Speaker 3 (21:14):
So what can you do?
Speaker 1 (21:17):
Then let's come to the breakthrough technology is part because
one reason you won't invest in a company is it's
not going to be profitable. But another and a more
intriguing explanation, this is something you've talked about, but also
your fellow Silicon Valley billionaire Peter Thiel, has talked about
that regardless of the politics, the pace of truly transformational
(21:37):
breakthroughs in science and technology has been slowing down.
Speaker 3 (21:41):
Do you agree?
Speaker 2 (21:46):
I do generally agree, and people are looking for easier
So mostly in business, people look for lowering the probability
of failure, even if it lowers.
Speaker 3 (22:01):
The consequences of success.
Speaker 2 (22:04):
My personal entire life is dedicated to I don't mind
the probability of failure, but I want the consequences of
success to be consequential. If have ten efforts and one
of them produces cheaper stale, it makes up for all
the other losses. Now, this is the technology that not
(22:28):
only is the steal for the world that's low carbon,
but it's also American manufacturing, prowess in exports, and all
the good things any traditional business person would recognize. I
think we have that and still done. I think we
have that done in Seman. I think fusion will get there.
(22:50):
Very likely super hot geothermal will get there. These are
core technologies. And you know, as much as I'm not
a fan of Alan's a good job with EVS, there's
no chance any policy would have achieved what he achieved
by just betting on EVS.
Speaker 1 (23:10):
You know, you talked about some environmentalists who have you know,
stop nuclear plants and as a result have ended up
building more coal power plants. You know, you could break
up the environmental movement in many parts or you know,
different philosophies. One of the philosophies is what is yours,
which is you have breakthrough technologies, and because they are cheaper,
the market for those technologies wins out. There's another philosophy,
(23:33):
which is we already have most of the technologies, not
all of them, but most of the technologies that we need.
We just need to build them out and build them
out quickly. Now, if you are worried about breakthroughs declining
or slowing down, would you be betting on well, let's
double down on what exists and deploy it.
Speaker 2 (23:51):
No, that's a silly notion, and a few people have
pushed that idea, and it's a bad idea. In fact,
two years ago, for I think twenty twenty two ad
an opadd and economies the fundamentally argue that to get
(24:12):
to zero carbon emissions by twenty fifty, we'd have to
give up the goal, give up the goal for lower
emissions by twenty thirty, because if you're deploying poor technologies.
More broadly, we have less money to deploy breakthrough technologies
and less money to invest in breakthrough technologies, So we
(24:35):
can shoot for twenty thirty goals or twenty fifty much
better for the planet, and of course we don't know
how much time we have on the planet before we
get exponential increase in temperatures and climate effects. It's better
to develop the right technologies and deploy them broadly, then
(24:58):
take what we have and deploy them. We saw the
disaster in the Spain's electric grid not very long ago.
That can happen here too, so I do think we
need to be very thoughtful and very businesslike. Even if
we do it, India is not going to do it today.
(25:20):
India is one of the fastest growing solar markets, but
coal is growing faster. More coal is being deployed than
ever being deployed before, and that same is true I
think similarly of China. So we can look at the
solar numbers which have been climbing, but it's because total
demand for energy is large, and some things work with
(25:44):
intermittent power, and it's cheaper to do intimatent power, so we.
Speaker 3 (25:49):
Should do that with intermittent power. Other things have to
have reliable power.
Speaker 1 (25:54):
So the Spain and Portugual are spectacular examples of country
wide blackout and you know, make headlines around the world.
But there's an OECD ranking of countries that suffer outages
and the number of hours that are lost because of blackouts.
The US ranks five ranks higher than Spain when it
comes to just reliability of power. But let's take the
(26:15):
last question or times running out. What do you think
is the kind of lasting damage that will come from
this Trump administration we've had this is the second term,
and if there is a more climate positive president at
some point, what can be undone?
Speaker 2 (26:31):
Well, I think the biggest damage is the slowdown in
the import of talent from all parts of the world.
That's immigration that reduces our ability to have the kinds
of breakthroughs that make the economics possible, that will give
us the technologies that can solve climate and economic growth together.
(26:55):
Thank you very not, Thank you, Thank you everybody.
Speaker 1 (27:07):
And thank you for listening to zero. And now for
the sound of the week. If you haven't guessed already,
that is the sound of a mosquito. Around the world,
mosquito bond illnesses are becoming more prevalent as temperatures rise.
(27:29):
In Singapore, scientists are releasing lap bread mosquitoes into the
wild to help combat the spread of Dengi fever. Read
more about the project than others like it on Bloomberg
dot com. If you like this episode, please take a
moment to rate and review the show on Apple Podcasts
and Spotify. Share this episode with a friend or with
someone who's too scared of failure. This episode was produced
(27:52):
by Oscar boyd Our. Theme music is composed by Wondering
Special thanks to Brian Kahan, Michelle ma Eleanor Harrison dungatesec
Beck Showan Wagner, mech Sabo, Abbi Danzig, and Crystal concre
ras I am Akshatrati back soon. Hey, it's Suksha. Each
(28:26):
week you lend me your ears, and now I'd like
to hear from you. Do you have a burning question
about climate, green tech, or the future of the planet.
Please send your questions to us in writing or as
a voice memo to zero pod ad Bloomberg dot net
and we'll make an episode answering them. Please do include
your name and where you're based. Thank you.
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