Data center delivery depends on power gear and site readiness

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 44:04

   of this but i'm curious like day-to-day what you're seeing on the data center side and your experience you know now what what is that like for you the data center is one of the the links in the supply chain to deliver compute by the cloud and the truth is it's whether you deliver it by the cloud, via a cloud, or you deliver it what we call on-prem, it impacts both case. In one case, you rent the capacity and you put your equipment in it. In the other case, your customer rents the data center. And so it is a limitation in the market right now.

2. 44:43

   It exposes a whole bunch of weaknesses in the U.S. Our grid is pathetic and sort of built on 1940s or 50s technology. We stopped doing work in very interesting technologies that turn out to be extremely clean, like nuclear. I mean, wouldn't it be ironic if it took AI to bring us back to doing nuclear? Right. That's right. It showed that in these data centers, we use generators as backups. And these are either diesel or LNG or one form of gas, right? And these come from GE Vernova or they come from Caterpillar. There'd been no innovation in generator and diesel gensets for decades. Now suddenly there's innovation.

3. 45:36

   The guys at Boom want to use what they designed for jets to power data centers. We're seeing all sorts of interesting things in battery backup and like from Bloom Energy, you're seeing interesting fuel cell. I mean, there's just this enormous innovation because there's necessity driving it. We don't have enough data centers. They're coming on too slowly. The grid is old. And so we're, it's an area of tremendous innovation. I think the industry did itself no favors by doing some dumb stuff at the beginning, tried to pawn off some costs on local communities. It tried to take advantage of local municipalities. There is no reason a data center shouldn't pay its way. There's no reason why it should use very much water. We use closed-loop systems, right? All the data centers in the U.S. use less than California almond growers. Not by

4. 46:31

   1x or 2x or 4x, but between four and seven times the almond growers use more. So, I mean... The water thing's just not a thing. The water thing's not just a thing. But as a community, we didn't do a good job of communicating with local communities, getting their buy-off, showing them that we're going to bring thousands, and in some cases, ten thousands of high-paying construction jobs. We're going to pay ongoing jobs, and their tax base ought to go down over time.

5. 46:57

   And we didn't do a good job of that, and now we're paying the price. I mean, it kind of goes with the whole theme of tech doing a terrible job, communicating about AI in general. Horrible job. We're doing a horrible job. I think the data center thing, the other part of the data center thing that's interesting to me is, like, if I ask you, I don't know, 2018 2020 whatever what's the probability that data centers were going to be a critical factor get another thing i'd have gotten wrong right yeah we'd all got it wrong we got it wrong and it just and that was just like a it's a new thing it's like okay now you have to build it all the way through and deliver it but how long does it take to go from shovel i know you joked about shovel i actually want to ask you about that but how long does it take to go from start to finish

6. 47:37

   on a data center shovel ready is an expression you hear in the data center world it means we haven't done shit we want to sell you a pile of dirt ready for your shovels to start doing something it does sound better it does sound better i've got raw land or i've got dirt in oklahoma right Permits and other things that are important. Sometimes, sometimes not. We would never have expected to be where we are today.

7. 48:11

   If you have a good builder, it takes probably from raw land and permits to stand up 50 megawatts, which is a reasonable block. And often even the big sites unfold in 50 megawatt blocks. 50 megawatt blocks is 18 months. now if there's an existing building there and there's grid power already we call those brownfield sites so a lot of what's going on right now is people are going to the rust belt and they're buying old factories paper mills uh because they had a lot of power right that they had the permits for power already and retrofitting them so how much of their kind of supply chain bottleneck is energy versus chips versus the construction versus permitting versus whatever else each chunk of the supply chain has its own supply chain so data centers need uh there's plenty of concrete uh in most places there's labor although in wyoming where there was a battle for all these data center

8. 49:15

   sites they were bringing in electricians from as far away as denver um generators and uh electrical transmission switches are long lead time items right now and those are hard to come by and so those are the long poles usually usually you can get up what's called a cold shell you can build a concrete tilt-up building or a metal building fairly quickly um but then you have to fit it out and turn it into a high-powered hotel for for compute Yeah.

9. 49:48

   Right? And that takes electricians, takes cooling, chillers, all these other things. Those all are long lead time right now.