July 24, 2025 • 27 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 (00:00):
Welcome to zero. I am 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
(00:23):
US 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. Vinoth Cosla
is one of them.
Speaker 2 (00:43):
Mostly in business, people look for lowering the probability of failure,
even if it lowers.
Speaker 3 (00:50):
The consequences of success.
Speaker 2 (00:53):
My personal entire life is dedicated to i'twind the probability
of but I want the consequences success to be consequential.
Speaker 1 (01:05):
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 Coaslaw Ventures, a firm that has backed big
tech success stories like Door, dash, Stripe, and Instacart. He
(01:27):
also invests in climate startups such as impossible foods and
Commonwealth fusion systems. Though Vinod 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
(01:48):
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 Winnowed last year where he talked
about his feud with Elon Musk before the twenty twenty
(02:09):
four elections. Last week, I caught up with Winnode again
for a live conversation at the Bloomberg Green event in
Seattle 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.
(02:31):
Good morning, Winolt. We are in beautiful 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 is
going to reduce clean energy spending by one estimate, by
five hundred billion dollars over the next five years, and
(02:54):
as a result, all estimates show that the US is
going to miss its twenty thirty climate goals. Is much
that climate advocates don't like about the bill, 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. Why because there's better
(03:14):
uses for the money. Very simply, you know, these subsidies
once they start perpetuate and there isn't Energy is a
serious business. You can't subsidize.
Speaker 2 (03:28):
All of energy at scale. So when do you stop them?
I think by the time they are a few percent
less than five percent off the market they're serving. Subsidies
in every industry should always start be high, be declining
over time, and by the time there are a few
(03:50):
percent of a segment, they should be stopped and the
money should go to better uses.
Speaker 1 (03:56):
The Cormpan administration has made a clearer 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
(04:17):
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 preens that we do have
in the bill will be enough to get nuclear and
geothermal to the level you want it to reach.
Speaker 3 (04:34):
So each technology is a little bit different.
Speaker 2 (04:38):
Nuclear problem isn't that it doesn't have enough subsidies. Nuclear
problem is nimbiism has held it back. Every nuclear project
takes ten years longer than you think it well because
people like gain fund us so the thick I overjoke.
(05:01):
Environmentalists 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 nimbeism.
Super hot geothermal, there's old geothermal, and I include companies
(05:27):
like Fervo and others in old geothermal essentially below what's
called supercritical steam. Steam above a certain temperature, which is
around four hundred degrees has way more energy content. So
four hundred and fifty degrees sandigrade well will have five
times the amount of energy that at two hundred and
(05:50):
fifty degrees sandi grade Worldwille and you have to be
realistic about it. So the problem isn't geothermal. The problem
is the economics of geothermal. Subsidies will help, but what
really helps is developing technology to drill to four h
and fifty degrees because normal metal drill bits collapse well
(06:11):
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. But if you do that,
you don't have to worry about climate because your tumble
will be cheaper.
Speaker 3 (06:32):
Than natural gas.
Speaker 2 (06:33):
Unsubsidized subsidies will help, But in fact it's really not
a problem in geo tumble. It's just not enough people
have worked on the hard problem. They've worked on hand
baby problems.
Speaker 1 (06:48):
And so let's take them one by one. Because you've
invested in nuclear.
Speaker 2 (06:53):
By the way, we didn't talk about fusion, which I'm
exactley 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 (07:07):
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.
Speaker 3 (07:13):
It's four years now, left, Okay, there will be a
new Cleobe.
Speaker 2 (07:16):
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 subfufusion plan and scaling of fusion plans.
All those are very very doable. I expect it will
(07:37):
happen 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
(08:00):
geothermal technology needs to work. And I'm a big fan
of nuclear too, just it has the social problems of nimbiism.
Speaker 1 (08:09):
We're talking here within very high 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 bottleneck
(08:31):
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,
(08:53):
it's not startups, it's not investors putting money.
Speaker 2 (08:56):
I think you're confusing a number of things. The subsidies
have nothing to do with electricity prices going up.
Speaker 3 (09:04):
Right.
Speaker 2 (09:05):
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 to use intermittent
power and come up with clever strategies, For example, production
of hydrogen can be done with intermittent power.
Speaker 3 (09:28):
You want the cheapest power.
Speaker 2 (09:29):
You want solar and wind to produce hydrogen, but you
don't want solar and wind to power a home because
you want to watch the football 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
(09:53):
pushing this bad, uneconomic idea as if economics don't matter.
Speaker 1 (09:58):
By prices of electricity, we'll go up, not just because
of the tax guys, but because of all these bottlenecks
to the being.
Speaker 2 (10:02):
So 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, h is two years old. You know,
AI didn't have any deployment two years ago, or minimal deployment,
(10:25):
and suddenly it's going to be the large consumer of power.
So the change in demand is what has caused the problem. Now,
nimbiism like grid again is going to be a problem.
Speaker 3 (10:39):
But data centers don't need the grid.
Speaker 2 (10:42):
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.
Speaker 1 (10:59):
So 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
(11:19):
on AI will be held back because if energy issues broadly,
not just renewables or not.
Speaker 2 (11:26):
I do worry talked about data centers a lot. I
think the answer to that is scaling capacity. I do
think super hot geothermal is a perfect technology for that.
Twenty thirty five on, it will all be fusion as
the scaling technology and super hart geothermal. Hopefully nuclear too,
(11:49):
but 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 grid, if.
Speaker 1 (12:07):
It's not attached to the grid, and if it's attached
to a powerline on its own or close by.
Speaker 3 (12:11):
Yeah.
Speaker 1 (12:12):
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
(12:34):
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 (12:42):
Yeah, most of you should.
Speaker 2 (12:43):
Now, I am vehemently against Trump in 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.
(13:06):
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 (13:19):
He said, all we need is energy.
Speaker 2 (13:22):
I do think we need energy, but we need more
importantly talent, and talent they're shutting off with their approach
to immigration. 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
(13:47):
climate and other technology problems into this country. Unfortunately, what
will you do as a result. You're an investor, you
invest in companies.
Speaker 1 (13:54):
You have capital that you want to put towards these ideas.
Do you just go outside America?
Speaker 3 (13:59):
Well?
Speaker 2 (13:59):
Absolutely, Look, people are anyway going outside America, and so
most companies have multiple locations within America and outside America
to go seek the talent. When Russia became a pariah
with the Ukraine attack, people set up new offices in
(14:21):
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 Putin's regime. So
talent will flow to wherever they're welcomed, and they're very
much in human. I mean, there's some of the salaries
(14:42):
in the SAI 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 even more
than energy.
Speaker 1 (14:59):
And so are used to to do that. Are you
looking at startups in other countries?
Speaker 2 (15:02):
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 (15:15):
And where do you think are the emerging hubs?
Speaker 2 (15:17):
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 of talent in Canada. AI started around Toronto in
(15:37):
that area, so a lot of talent there. But frankly,
talent everywhere is being repurposed into this AI domain.
Speaker 1 (15:52):
After the break I talked with we know about the
pace of innovation and the consequences of failure. And hey,
if you're finding this episode inside, well, 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.
(16:19):
The level 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 (16:41):
No, I think it's been pretty consistent. The thing you
have to forget.
Speaker 2 (16:45):
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 and you got shut down all
(17:07):
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.
Speaker 3 (17:16):
At twice the price.
Speaker 2 (17:18):
So most of the efforts on steel are relatively poor efforts.
In Sweden, there's a green steel effort, there's a couple
of steel green steel efforts in this area. I think
they're generally poor efforts. Why because when they're successful, they
are not cheaper than regular steel. We have efforts, it
(17:42):
was only attempt is to get cheaper than regular steel
and have low carbon emissions. And it's an and, not or,
and that's what's key for broad deployment of any of
these technologies. So my and that doesn't come for we
have a much higher risk of failing because we are
(18:04):
taking much more technical risk. In steel, we're taking way
more technical risk than anybody. But I'm pretty certain we
have steel salt or steel will be cheaper than cold
based steel in this country or in China. If that's
the case, there's no reason, whether you care about climate
or not, to build anything but the cheapest steel. And
(18:28):
we can use the cheapest ores. The enrichment ores 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 costs less per ton for far
(18:48):
lower carbon, but the far 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
(19:08):
they succeed, they change the world, Versus things that are
incrementally better, are better than anything else, but not good
enough to compete with fossil.
Speaker 1 (19:18):
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 alternative, you don't need to
work sell. But you are also entering a space in
(19:39):
the Trump administration that is biasing the market for more carbon.
So their tax credits for oil and gas drilling, that
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 the
(20:00):
market is being biased for carbon, how do you compete?
Speaker 2 (20:04):
No question, the fossil industry is on the inn in Washington, DC,
and they've received trillions 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
(20:26):
billions and billions or one hundred billions we spend providing
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
(20:47):
acknowledge that. So what can you do?
Speaker 1 (20:50):
Then? Let's come to the breakthrough technology a 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 excellent 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 breakthroughs
(21:12):
in science and technology has been slowing down.
Speaker 3 (21:15):
Do you agree?
Speaker 2 (21:19):
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 (21:35):
The consequences of success.
Speaker 2 (21:38):
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, one of
them produces cheaper stale, it makes up for all the
other losses. Now, this is the technology that not only
(22:02):
is the steal for the world, that's low carbon, but
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 Semang. I think fusion will get there. Very
(22:24):
likely super hot geo thermal will get there. These are
core technologies. And you know, as much as I'm not
a fan of Alant, he's done a good job with EVS.
There's no chance any policy would have achieved what he
achieved by just bearing on EVS.
Speaker 1 (22:43):
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're cheaper,
the market for those technologies wins out. There's another philosophy,
(23:06):
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 (23:25):
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, i'd
OPAD and economies the fundamentally argue that to get to
(23:46):
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, ain less
money to invest in breakthrough technologies, So we can shoot
(24:09):
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 take what
(24:32):
we have and try and deploy them. We saw the
disaster in the Spains electric grid not very long ago.
That can happen here too, So I do think we
need to be very thoughtful and very businesslide. Even if
we do it, India is not going to do it.
(24:53):
Today India is one of the fastest growing solar markets,
but goal is growing faster. More coal is being deployed
than ever being deployed before, and that the 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
(25:17):
work with intimittent power, and it's cheaper to do intimittent power,
so we should do that with intermittent power.
Speaker 3 (25:24):
Other things have to have reliable power.
Speaker 1 (25:27):
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
(25:48):
last question or time is 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 well.
Speaker 2 (26:05):
I think the biggest damage is to slow down 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.
(26:28):
Thank you enough, Thank you, Thank you everybody.
Speaker 1 (26:41):
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.
(27:03):
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
(27:25):
by Oscar boyd Our. Theme music is composed by Wondering
Special thanks to Brian Kahan, Michelle ma Eleanor Harrison Dungate,
Jessica beck Shawan, Wagner, Mech Sabo Abbi Danzig and Crystal
concre ras I am Akshatrati back soon
Welcome to zero. I am 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
(00:23):
US 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. Vinoth Cosla
is one of them.
Speaker 2 (00:43):
Mostly in business, people look for lowering the probability of failure,
even if it lowers.
Speaker 3 (00:50):
The consequences of success.
Speaker 2 (00:53):
My personal entire life is dedicated to i'twind the probability
of but I want the consequences success to be consequential.
Speaker 1 (01:05):
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 Coaslaw Ventures, a firm that has backed big
tech success stories like Door, dash, Stripe, and Instacart. He
(01:27):
also invests in climate startups such as impossible foods and
Commonwealth fusion systems. Though Vinod 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
(01:48):
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 Winnowed last year where he talked
about his feud with Elon Musk before the twenty twenty
(02:09):
four elections. Last week, I caught up with Winnode again
for a live conversation at the Bloomberg Green event in
Seattle 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.
(02:31):
Good morning, Winolt. We are in beautiful 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 is
going to reduce clean energy spending by one estimate, by
five hundred billion dollars over the next five years, and
(02:54):
as a result, all estimates show that the US is
going to miss its twenty thirty climate goals. Is much
that climate advocates don't like about the bill, 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. Why because there's better
(03:14):
uses for the money. Very simply, you know, these subsidies
once they start perpetuate and there isn't Energy is a
serious business. You can't subsidize.
Speaker 2 (03:28):
All of energy at scale. So when do you stop them?
I think by the time they are a few percent
less than five percent off the market they're serving. Subsidies
in every industry should always start be high, be declining
over time, and by the time there are a few
(03:50):
percent of a segment, they should be stopped and the
money should go to better uses.
Speaker 1 (03:56):
The Cormpan administration has made a clearer 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
(04:17):
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 preens that we do have
in the bill will be enough to get nuclear and
geothermal to the level you want it to reach.
Speaker 3 (04:34):
So each technology is a little bit different.
Speaker 2 (04:38):
Nuclear problem isn't that it doesn't have enough subsidies. Nuclear
problem is nimbiism has held it back. Every nuclear project
takes ten years longer than you think it well because
people like gain fund us so the thick I overjoke.
(05:01):
Environmentalists 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 nimbeism.
Super hot geothermal, there's old geothermal, and I include companies
(05:27):
like Fervo and others in old geothermal essentially below what's
called supercritical steam. Steam above a certain temperature, which is
around four hundred degrees has way more energy content. So
four hundred and fifty degrees sandigrade well will have five
times the amount of energy that at two hundred and
(05:50):
fifty degrees sandi grade Worldwille and you have to be
realistic about it. So the problem isn't geothermal. The problem
is the economics of geothermal. Subsidies will help, but what
really helps is developing technology to drill to four h
and fifty degrees because normal metal drill bits collapse well
(06:11):
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. But if you do that,
you don't have to worry about climate because your tumble
will be cheaper.
Speaker 3 (06:32):
Than natural gas.
Speaker 2 (06:33):
Unsubsidized subsidies will help, But in fact it's really not
a problem in geo tumble. It's just not enough people
have worked on the hard problem. They've worked on hand
baby problems.
Speaker 1 (06:48):
And so let's take them one by one. Because you've
invested in nuclear.
Speaker 2 (06:53):
By the way, we didn't talk about fusion, which I'm
exactley 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 (07:07):
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.
Speaker 3 (07:13):
It's four years now, left, Okay, there will be a
new Cleobe.
Speaker 2 (07:16):
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 subfufusion plan and scaling of fusion plans.
All those are very very doable. I expect it will
(07:37):
happen 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
(08:00):
geothermal technology needs to work. And I'm a big fan
of nuclear too, just it has the social problems of nimbiism.
Speaker 1 (08:09):
We're talking here within very high 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 bottleneck
(08:31):
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,
(08:53):
it's not startups, it's not investors putting money.
Speaker 2 (08:56):
I think you're confusing a number of things. The subsidies
have nothing to do with electricity prices going up.
Speaker 3 (09:04):
Right.
Speaker 2 (09:05):
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 to use intermittent
power and come up with clever strategies, For example, production
of hydrogen can be done with intermittent power.
Speaker 3 (09:28):
You want the cheapest power.
Speaker 2 (09:29):
You want solar and wind to produce hydrogen, but you
don't want solar and wind to power a home because
you want to watch the football 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
(09:53):
pushing this bad, uneconomic idea as if economics don't matter.
Speaker 1 (09:58):
By prices of electricity, we'll go up, not just because
of the tax guys, but because of all these bottlenecks
to the being.
Speaker 2 (10:02):
So 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, h is two years old. You know,
AI didn't have any deployment two years ago, or minimal deployment,
(10:25):
and suddenly it's going to be the large consumer of power.
So the change in demand is what has caused the problem. Now,
nimbiism like grid again is going to be a problem.
Speaker 3 (10:39):
But data centers don't need the grid.
Speaker 2 (10:42):
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.
Speaker 1 (10:59):
So 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
(11:19):
on AI will be held back because if energy issues broadly,
not just renewables or not.
Speaker 2 (11:26):
I do worry talked about data centers a lot. I
think the answer to that is scaling capacity. I do
think super hot geothermal is a perfect technology for that.
Twenty thirty five on, it will all be fusion as
the scaling technology and super hart geothermal. Hopefully nuclear too,
(11:49):
but 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 grid, if.
Speaker 1 (12:07):
It's not attached to the grid, and if it's attached
to a powerline on its own or close by.
Speaker 3 (12:11):
Yeah.
Speaker 1 (12:12):
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
(12:34):
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 (12:42):
Yeah, most of you should.
Speaker 2 (12:43):
Now, I am vehemently against Trump in 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.
(13:06):
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 (13:19):
He said, all we need is energy.
Speaker 2 (13:22):
I do think we need energy, but we need more
importantly talent, and talent they're shutting off with their approach
to immigration. 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
(13:47):
climate and other technology problems into this country. Unfortunately, what
will you do as a result. You're an investor, you
invest in companies.
Speaker 1 (13:54):
You have capital that you want to put towards these ideas.
Do you just go outside America?
Speaker 3 (13:59):
Well?
Speaker 2 (13:59):
Absolutely, Look, people are anyway going outside America, and so
most companies have multiple locations within America and outside America
to go seek the talent. When Russia became a pariah
with the Ukraine attack, people set up new offices in
(14:21):
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 Putin's regime. So
talent will flow to wherever they're welcomed, and they're very
much in human. I mean, there's some of the salaries
(14:42):
in the SAI 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 even more
than energy.
Speaker 1 (14:59):
And so are used to to do that. Are you
looking at startups in other countries?
Speaker 2 (15:02):
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 (15:15):
And where do you think are the emerging hubs?
Speaker 2 (15:17):
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 of talent in Canada. AI started around Toronto in
(15:37):
that area, so a lot of talent there. But frankly,
talent everywhere is being repurposed into this AI domain.
Speaker 1 (15:52):
After the break I talked with we know about the
pace of innovation and the consequences of failure. And hey,
if you're finding this episode inside, well, 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.
(16:19):
The level 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 (16:41):
No, I think it's been pretty consistent. The thing you
have to forget.
Speaker 2 (16:45):
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 and you got shut down all
(17:07):
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.
Speaker 3 (17:16):
At twice the price.
Speaker 2 (17:18):
So most of the efforts on steel are relatively poor efforts.
In Sweden, there's a green steel effort, there's a couple
of steel green steel efforts in this area. I think
they're generally poor efforts. Why because when they're successful, they
are not cheaper than regular steel. We have efforts, it
(17:42):
was only attempt is to get cheaper than regular steel
and have low carbon emissions. And it's an and, not or,
and that's what's key for broad deployment of any of
these technologies. So my and that doesn't come for we
have a much higher risk of failing because we are
(18:04):
taking much more technical risk. In steel, we're taking way
more technical risk than anybody. But I'm pretty certain we
have steel salt or steel will be cheaper than cold
based steel in this country or in China. If that's
the case, there's no reason, whether you care about climate
or not, to build anything but the cheapest steel. And
(18:28):
we can use the cheapest ores. The enrichment ores 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 costs less per ton for far
(18:48):
lower carbon, but the far 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
(19:08):
they succeed, they change the world, Versus things that are
incrementally better, are better than anything else, but not good
enough to compete with fossil.
Speaker 1 (19:18):
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 alternative, you don't need to
work sell. But you are also entering a space in
(19:39):
the Trump administration that is biasing the market for more carbon.
So their tax credits for oil and gas drilling, that
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 the
(20:00):
market is being biased for carbon, how do you compete?
Speaker 2 (20:04):
No question, the fossil industry is on the inn in Washington, DC,
and they've received trillions 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
(20:26):
billions and billions or one hundred billions we spend providing
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
(20:47):
acknowledge that. So what can you do?
Speaker 1 (20:50):
Then? Let's come to the breakthrough technology a 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 excellent 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 breakthroughs
(21:12):
in science and technology has been slowing down.
Speaker 3 (21:15):
Do you agree?
Speaker 2 (21:19):
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 (21:35):
The consequences of success.
Speaker 2 (21:38):
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, one of
them produces cheaper stale, it makes up for all the
other losses. Now, this is the technology that not only
(22:02):
is the steal for the world, that's low carbon, but
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 Semang. I think fusion will get there. Very
(22:24):
likely super hot geo thermal will get there. These are
core technologies. And you know, as much as I'm not
a fan of Alant, he's done a good job with EVS.
There's no chance any policy would have achieved what he
achieved by just bearing on EVS.
Speaker 1 (22:43):
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're cheaper,
the market for those technologies wins out. There's another philosophy,
(23:06):
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 (23:25):
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, i'd
OPAD and economies the fundamentally argue that to get to
(23:46):
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, ain less
money to invest in breakthrough technologies, So we can shoot
(24:09):
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 take what
(24:32):
we have and try and deploy them. We saw the
disaster in the Spains electric grid not very long ago.
That can happen here too, So I do think we
need to be very thoughtful and very businesslide. Even if
we do it, India is not going to do it.
(24:53):
Today India is one of the fastest growing solar markets,
but goal is growing faster. More coal is being deployed
than ever being deployed before, and that the 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
(25:17):
work with intimittent power, and it's cheaper to do intimittent power,
so we should do that with intermittent power.
Speaker 3 (25:24):
Other things have to have reliable power.
Speaker 1 (25:27):
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
(25:48):
last question or time is 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 well.
Speaker 2 (26:05):
I think the biggest damage is to slow down 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.
(26:28):
Thank you enough, Thank you, Thank you everybody.
Speaker 1 (26:41):
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.
(27:03):
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
(27:25):
by Oscar boyd Our. Theme music is composed by Wondering
Special thanks to Brian Kahan, Michelle ma Eleanor Harrison Dungate,
Jessica beck Shawan, Wagner, Mech Sabo Abbi Danzig and Crystal
concre ras I am Akshatrati back soon
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