Hurricanes, AI, and the Future of Energy | TSG Ep. 905

Hi, everyone. Is AI Apple's original sin? You're watching Textron Gang.

Hi everyone. Happy Tuesday. Welcome back here to Textron Gang.

Well, I hope your Monday went well. It was the start of yet another week here in the summer. You know, uh, a as we get deeper into August and South Florida, we all, all of us down here start looking more and more towards sort of the Cape Verde Islands off Africa and so forth watching, you know, storms spin up.

And of course, we have a one spinning up. Aaron is, isn't your wife's name Aaron? Jp?

That's right. Yeah. Yeah.

No, good for you. You got a hurricane named after her. Yeah, she's Been watching that one.

She's very proud Of it. I'm sure well tell It's a healthy one. It's a healthy one.

Anyway, if you're not in Hurricane Ally, it makes no difference to you. But that, that's kinda what we do down here in Florida in August, September, October. Um, but we've got so much more than hurricanes to talk about and some great people to talk about it with our gang for today.

I've already mentioned JP Morganthal, who's a fellow Floridian with me, one and only Stephen Foskett and the Dean Mike Ard. What a great panel. Welcome guys.

Happy Tuesday. Let's dive right into things, Mike. Yeah, everyone's been beating up Apple that they're late to the AI wagon.

You know, I have my own views on this, but what's going on? Well, there's a report out of Bloomberg that says that next year Apple will get more serious with the AI capabilities built into Siri. And then that will be followed up by a robot, also driven by Siri.

That will arrive in 2027 sometime. I'm not sure Apple confirmed any of this. I always get suspicious when I see these stories because, you know, somebody's beaten up Apple about not being AI savvy, and their stock price gets beat up and suddenly this gets leaked.

So I'm always suspicious about the motivation for these things. But jp, what's your sense of what's going on here with Apple and AI and what's real and what's not? Well, I Mean, the reports of the hardware coming out are 2027, so we're definitely looking forward, looking here with regard to this information.

None of it is actually created or on the blocks or working prototypes as far as we know. I did listen to the Bloomberg report, uh, to hear what they were pulling out, you know, the strategy itself. I, I think, you know, befits, uh, apple Strengths, which has been hardware, you know, they are, uh, I think that's been their claim to fame is the, you know, know creation of devices and, uh, bringing devices to market in a way that interacts with you in a way that's personal and, and makes sense.

Uh, I gotta say, some of these reports though, about the utility of the devices that they're working on, uh, I question, like you said, it's not so much a robot as it is a, uh, like an iPad like device on an arm that can track around the house and, you know, be able to, uh, follow and, and advise and provide information. As an assistant. I, I don't know how much room this market has for more assistant, but, you know, uh, apple always has somewhat of a fanboy base.

Uh, people who will be beholden to Apple devices and get the latest, uh, apple device. Their PR headset, I don't think is doing well, uh, as or as well as they had hoped or expected is a very expensive piece of equipment. Uh, and it really doesn't answer the question on the AI side.

It doesn't really talk to utilizing ai, uh, and, you know, getting the enhancements and the value out of Apple products, um, but also using Apple products in an, in an AI centered universe. So, uh, you know, as you said, a lot of people will call if it's IN'S head. Uh, they don't, you know, they don't, they think that Apple's behind with regard to ai.

I, I think the expectation though is that, you know, fang, uh, apple needs to keep up with Meta and Google and Microsoft with regard to, uh, producing and being part of that, you know, gold Rush. And I don't know that Apple does. I really don't.

I mean, uh, they are included in that FANG grouping, but I don't believe that they need to keep up in the same way they're not an infrastructure player. Right. And a lot of the interest areas really around AI infrastructure, so, you know, the expectation that Apple should be right there in the center with everybody producing models and generating, you know, uh, inference engines that everybody can, well, that's not Apple's thing.

And that, and that's not where Apple plays. So to expect them to compete on that level and compete in that space, but those players, I think is a, is a misnomer. Yeah, that's not really Apple's thing, you know, I mean, they, they never have been a leading edge company in terms or bleeding edge company.

They just don't do that. Um, historically I think people forget because Apple has had such incredible, uh, success with things like the iPhone and the AirPods and so on. I think people forget that a lot of these, uh, products are built on existing technologies, and Apple often waits, uh, for the market to mature before diving in.

I think that's what they're doing with ai. I think you're, you're spot on there. JP Apple just isn't like the rest of those companies.

And I think that time will show that they were smart not to pour billions of dollars into developing Frontier AI large language models, that ultimately there was no business justification for, um, to the news here. I think that it's really cool that a, uh, you know, that, that the idea of what they're talking about, um, apple fanboys probably remember the iMac G four from 2002, which was, uh, sometimes, uh, nicknamed the, uh, you know, the lamp iMac, which has kind of a rounded base with an arm and a and a screen. They actually had advertisements where those moved around and danced.

I think that's exactly what, uh, Bloomberg is suggesting that Apple is developing essentially a, uh, like a, like a little home thingy with like a little arm and it kind of moves around and follow, you know, it doesn't literally follow you around the house. It just sort of is there in the room with you reacting to you, um, in a, in sort of a friendly way. I think that'd be a cool product.

I think Apple could probably pull that off. I'm not sure it would be transformative or useful. Uh, you know, I I I think that it would be a lot of work for a product that would have, uh, you know, limited appeal.

But I think that it shows what Apple could do with AI technology once it's a little bit more mature and a little bit less burn down the rainforest with, you know, mega models. You know, I mean, I think that Apple could run all of the AI needed to have a, uh, articulated, uh, friendly Siri bot, um, run it on, on device with, uh, you know, moderate power consumption. And that could be a, a pretty good move for Apple.

And actually it would be a pretty nice differentiator for the company in the market when everybody else seems to be running off with these, you know, Stargate billion, you know, nuclear powered data center projects. Well, I, I don't know. I Don't know, Alan, what's your take here?

'cause I look at this thing, especially this thing that as JP described it, I'm like, you know, I'm married happily, I got four children. I'm blessed. I don't need another thing following me around the house telling me what to do.

Reminds me of an old Star Trek episode with Hard Court Fenton Mud, and, uh, and he had the, uh, Android of his ex-wife Stella, or whatever her name was. But anyway, if You could rename it that they could call it Stella instead of Siri. Yeah, that would work.

Car caught Entin mud. Have you been drinking again? Is that alcohol?

I spell on your breath. But anyway, um, you know, is Apple too late to the AI there? Does anybody remember cell phones before there was an iPhone?

Sure, Sure. There was a decade of them, you know. Yeah.

But yet there was the iPhone sort of start tack, you know, Blackberry. Blackberry, Yeah. Yeah, yeah.

But you Work the, the month before the introduction to the iPhone and you look the, the month after the introduction to the iPhone and everything changed. I still think there's that a moment like that that might be out there for ai. I don't think it's a monitor with arms that may or may not be on wheels following when you were around.

I think that's pure smoke that their feet, they must have went back from that Bloomberg briefing and rolled on the floor, that these guys ate that up. Because a part of it Was also, they were going after the, uh, home security market. So Yes, the home, the home security's a real market, but you wanna know what, so you know who you left out of their competition for these things.

Amazon, Amazon has a great between ring and what's the other one? Bling. Not bling.

Bling something ring and something. They, they've got the, the cameras and the home security stuff nailed down pretty good. Google, of course is in there.

Look, I in my house, all you have to do is say her name and the little and the woman from, uh, Amazon. I don't want to say it. 'cause there's I would to be one in here.

I call it The dot. Yeah, it be, if you Use, I mean, in my house, it's not just the dots. I've got monitor, I have the 15 inch screen of it.

It's built into all my soundbars. It's built into e like my bath, ev the whole house is done up in it, so it's never, you need to follow me. I know name theory And another friend whose wife is named Alexa.

Yeah. Can you imagine those houses? Oh, it must be terrible.

But, you know, so it, it's already there. I would a as I, you know, Steven and I remember you, I know you were on the show that day. We talked about the first day the os 26 baders came out.

I remember you hated the, the, uh, glass interface still. I don't know if it's been growing on you. I like it.

But, but here's, here's the thing. They are subtly building intelligence into their product line, and I think that's really where they're gonna make their thing. I, I'll tell you something else though.

Did Johnny, ive signing the deal with Open ai steal their, their, their secret plans for world conquest and domination. I think that hurt. Yeah, I think that Definitely Hurt.

I think it Was almost like, you know, the rats leaving the jump in the Ship. Right? Right.

I I mean I bet you they thought they had that in the bag, right? Johnny Ivers was gonna come up with something Apple ish that would just, you know, do it. So Alan self-admitted Apple fanboy.

Correct. Open AI starts showing up with gear next year. Are you not first in line?

Absolutely. 'cause I'm, I'm just not an Apple fan. Fanboy.

I'm a gadget boy. It makes no difference to me. If there's some new tech gadget, I, you know, I'm there.

And does anybody think Samsung's gonna have something to say about all this soon? Well, you know, it's, it's funny, I'm an Apple fan boy, but we recently bought the Samsung Frame TV and the Samsung, um, uh, speakers, I don't remember what they're called, but they're, they, they, they're like, they look like a, like a picture frame. In fact, they have a picture in them.

No, I have a Frame TV in my bedroom. It's, it's really nice. It's really nice.

And the integration with their, um, whatever the heck they call it, symphony something or other sound, it's really good. And, uh, so we're actually pretty happy. The funny thing is, we don't use any of the intelligence of the frame.

It's a dumb TV with an Apple TV behind it, because the Apple TV experience is so much better. Um, but the, that combination really works well. And, you know, Samsung has some good capabilities.

Yeah, No, they absolutely do. I mean, you know, to me, and I don't take this the wrong way, it was, it used to be the, the, the argument between let's say a European sedan versus a, a Japanese sedan. The Japanese made fine sedans and they had all the bells and whistles.

As a matter of fact, they had more bells and whistles than the Europeans. The Europeans were more expensive. They had that kind of Tony look, right?

Do you wanna drive a Mercedes, a Beamer, an Audi, or, you know, a Jaguar versus maybe a Lexus, Infiniti Toyota, Honda. Right? And, um, I, I think it, you, you get that sort of between Samsung and Apple, right?

They, I think Samsung has great bells and whistles. They make good products. I, I have, well, I had a bad experience with one of their AK TVs, but we could talk about that another time I went to Sony.

But, um, anyway, I, I, I'm, I use the, my tablet is a Samsung tablet. My phone is Flip is the Flip Z, so, oh, you are Samsung. I, I just find that the products are good price, good quality, Their refrigerators reliable, have a bad wrap.

Mm-hmm. I'm sorry, they're refrigerators. Oh, I've, I've had Samsung a long time.

But the, but the digital equipment, yeah, you know, the, the common integration, you know, what you use on a daily basis, your tablet, your phone, I think they do a fine job with. And they're re you know, you reasonable, reasonably priced, and, uh, and they're well integrated. Yes, they are.

They are. But you know, back to Apple, as I said, I it's early, early in this game. We're not even at the end of the beginning.

So there's, there's time for them. I, they, you know, I wouldn't, I wouldn't be selling on my Apple stock just yet. Is this a move for, to bolster the stock price?

Or is they, are they trying to actually freeze the market Stock? The stock price is doing well? Uh, I don't think that they needed to make this announcement.

They've been rising steadily over the past month, a month and a half. Um, they were under two, two months ago. They're, I think they're two 30.

I last saw 'em. So, I mean, I, I think they're doing fine. What they need is another good iPhone release.

And that's where I think that they, they know Apple is getting, uh, stymied, right? It's like, what do you got? What do you got?

It's gonna be worth the I i Apple iPhone 17. You know, O on that point though, I mean, what has anybody got? I mean, the iPhone is one of the most important products of the century.

Maybe one of the most important consumer electronics products of all time. Uh, to say that Apple's gonna come out with another iPhone, man. Oh, man.

Uh, that, that's a, that's a challenge for anybody. That's true. So what year was that when the iPhone first came out?

Was that, I forgot, But iPhone first came out around 2004 or five. Okay. And then that was followed up by maybe what the next cool thing was the iPad, right?

The iPhone was released on, uh, June, June 29th, 2007. Was it seven already? Later than I thought.

I'm sorry. And then, so then the iPad followed a few years later. And since then, what?

Steve Jobs died, Right? Well, Oh, well, let's not get down that route. I know that people like to say that, but, um, the, the Air Pods alone are one of the biggest consumer electronic No, but the, But the Air Air Pods were Steve Jobs that was under development when jobs was there.

Well, you might as well say everything was under development when jobs. I mean, I'm sure that Jobs knew about the transition to, uh, arm as well. You know what I mean?

I, I, Well, he didn't want to be behold. Intel Gotta get, give him some credit sometimes. No, I Look, Tim Cook has done a heck of a job of steering the ship, but Bold, bold and Tim Cook don't go together, honestly.

And I'm a fanboy. I love their stuff. I have it all.

There's very few other, I didn't buy the glasses, the, the VR things that, that was a bridge too far for Lee. But I mean, the AirPods came out over five years after the death of Steve Jobs. Okay.

Are you really gonna say that? They're Steve Jobs creation? I, I, I think it came out under Yeah, I think so.

I'm sorry, but hey. Alright, well, I hope you know, well, let just tell you about this. Back to this story.

So this, uh, magical, uh, Siri robot thing that they're talking about. When Steve Jobs introduced the, uh, iMac G four in 2002, he said that in the future, all consumer devices are gonna look like this device, which would be a base with an articulated arm with a screen on it. So when this product comes out in 2028 or 2029, it was a Steve Jobs.

It's a Steve Jobs give him credit, no credit for Tim Cook. The man was a visionary. Visionary, Okay.

So the, so the next product launch will, will be, which is really Early, Will be a digital avatar of Steve Jobs doing the whole Present. You know, you wanna really get me going? Give me a holographic series that just pops up.

Oh yeah. Like The emperor movies, right? Something, you know, you want that, Yeah.

That, you know, that would, that I would say Steve Jobs never thought of and go Tim Cook. But let's take a break and come back to our next subject. You're watching Techron gag, Discover Techron Group, the epicenter of tech innovation.

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Hey folks, we're back and we're gonna dive into something that some folks might consider arcane and other folks are screaming about. But, uh, Microsoft apparently is changing its licensing plans for its SaaS products, for the volume discounts that it provides. And some people are complaining already that this is amounts to a 10% price hike.

Others are saying Microsoft's trying to take more of those customers direct so they can sell them more professional services. And there's always been some contention about the way SaaS apps are priced anyway. Everybody kind of starts out with a 50% discount and tries to negotiate downwards from there.

And, well, frankly, it's a little crazy to begin with. But Alan, what is your take on what's going on here with a Microsoft and B is the whole pricing model around SaaS app's just kind of broken. Yeah, so there, there's a, there's, there's, there's circles within circles here, right?

Spirals within spirals. First of all, they're only talking about vo, they're volume discount plan, which is probably one of five different discount plans they have over there. Um, this one though, and I think why it got attention is it affects the channel.

And, you know, the Microsoft channel, like the Cisco channel and some of these other big providers, you got, you got players who will kill themselves over 20 basis points, 10 basis points, because that's the difference there. And so every little discount helps. But, you know, the bigger issue is, Mike, as you said, the whole SaaS pricing model for some, especially with these bigger companies that have three tier distributions, is full of crap.

You never know. You know, I, I always find, just keep going higher up the tree and, and you'll get better discounts, right? Not good enough.

Let me speak to your manager. Let me go direct and, and you keep getting better discounts. And maybe it's, it's the New York boy in me, but you know that that's the way I always did business with them.

And, and it's not just Microsoft. It's all of the bigger players like this. There's the, you know, there seems to always be another discount plan that you didn't know about if this one, so this one dries up.

Let's see what the next one is. I'm all for transparency and pricing, and I think that that's the key. I I'm not gonna hit down on Microsoft, but let me tell you something.

I got a bill from Google YouTube last week for my NFL Sunday ticket for $522. I was livid. Livid because I'm watching and I thought my MLB season passed Was expensive.

No. Well, the NFL is a world unto itself. I mean, they're a marketing money machine, but I'm watching Google commercials on the tv four payments of 39 95 or whatever comes out, $280 is what it comes down to it.

Half the price. I reach out to Google to say, where's my volume discount here? You know, where's my discount?

Of course, I'm still waiting because they don't get a live person at Google and it could take two weeks for them to get back to you. But the whole SaaS model's rotten guys, right? And look, we could sit here and talk about is AI gonna break SaaS?

Hey, what's his name from Microsoft? Satya himself says, SAS has died, right? Couldn't come soon enough for me.

The son of a guns charge him $522 to watch football this year. But, you know, in terms of this, I don't think any Microsoft End users are sitting here truly saying, oh, I'm gonna pay 10% more. 'cause they're gonna say, I wanna speak to a manager and they're gonna get their, they're gonna get their discount back.

The only people who may lose out on this are the channel partners. And, and don't they always, but Microsoft has a way of making good to their channel partners too. So I'm sure there'll be a yet another discount we don't know about thrown into the program to make them hold too.

So crocodile tears for me guys. Well, I don't wanna get excited about pricing and licensing discussions, But 520, there's an an is crazy. But yeah, go ahead.

But There's an angle here, according to the article, this was partly driven by the EU requirements for transparent pricing. Could it be that the European Union could help all of us by forcing some of these companies to have less obscure? Because you are absolutely right.

Pricing, especially in major SaaS contracts is entirely fictitious. Yes, there's a price, but essentially if you're a bigger customer or a very big customer, what you pay is going to be what you negotiate rather than what the price is. And could it be that the EU might end up cracking down on some of those shenanigans?

And could that maybe Help us? There's a, there's a whole pattern here, uh, from the big players with regard to adhering to eu. Remember years ago it was like, all right, I'll ha I'll follow the EU rules, but in the US I'm doing the, my, the, this, whatever my way they, I, I have seen now three or four different occasions where EU rules are just becoming the rules that they play by internationally.

Right? One of them actually, uh, had to do with, um, how miners need to be, uh, confirmed their age in order to watch certain content that was initiated by the European Union, and they took it to the us. So the US now, you know, Google's now implemented this worldwide, and if you're a of a certain age, you need to prove who you are and what age you are, the same way they do in, in the, the, the, in the uk.

Um, and so I think there's a whole pattern here that's kind of going on where the, the, the specialty, you know, by region is starting to, they're realizing it's expensive to maintain all these different types of systems with different rules. And, and it's like, you know what, if they want it that way, it's not that big a deal. We're gonna push it on everybody.

It does seem to me that a lot of effort goes into these negotiations, and I'm not sure that they're meaningful. I mean, did I really get a better deal of the next person? Or did we just all, you know, waste about a month of a year of talking to each other about pricing, when at the end of the day, I might be half a point difference than the next guy, jp?

I mean, how silly is this? I look every dollar matters in business, right? Especially when you're a large corporation, uh, and you know, they, you know, the, your, your enterprise licenses based on the size of your organization or how much revenue you're generating.

Uh, it can be substantial, right? Uh, you know, somebody like a j and j or General Motors is, is, is gonna have see substantial upside with based on that discount if, if they're going by revenue in the size of the organization. So it's not a small change for some of these businesses.

Well, others, it's nominal, right? You, you're a $40 million business. It's, it's gonna be nominal.

Well, you know what they say though, if you watch your pennies, the dollars take care of themselves. Thanks, granny. Just, just some wise words of wisdom, right?

I'm going to throw out there. But, but seriously, it's true, right? You, you gotta watch your these things and a half a point here and a half a point there and it starts adding up.

Um, a as I said, especially, you know, when you're in the channel game, those 50 basis points is a big, big difference in your margin. It, it's the difference between profitability and not sometimes, right? You got overhead cost of good sold salespeople and stuff, right?

You in the Cisco channel, the Microsoft Channel, you know, these traditional channels, especially in the three tier distribution model where you go from manufacturer to distributor to, to jobber, if you will, it's, it's a big difference, man. They, that's, they live on those margins. I will tell you the one thing that does drive me crazy about it, it's makes it almost impossible to do any meaningful apples to apples comparison across any of these guys.

'cause no one knows what the actual price is. But I think they like it that way. The Microsoft, oh, they sure do.

Yeah. Of the world. They want it that way.

That's right. They'll kill this discount, this volume discount deal, but they're not gonna tell you about some other discount programs that they have in their back pocket. If they need to close the deal, it's the business.

Well, I'm gonna go get on the phone down cve, get a bigger discount online Microsoft stuff. But we're watching Textron gang, we'll be back. Are we in a data center crisis?

Oh, this sounds so manufactured. You're watching. com is the leading resource for news analysis and education on challenges facing the cybersecurity industry.

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And we're talking about, well, just how much capacity is there available in these data centers? 3%. And we also know that the cloud service providers are complaining or are not complaining, but at least cautioning people and advising people to be more efficient with their infrastructure because they too are running outta space.

And then, or at least according to JLL, some folks are booking data center capacity now 12 to 18 months ahead of time because they just can't get to the stuff and they're just hoping that they have applications or assuming they're gonna have applications to go there. But it's pretty far in advance. And when the app is actually ready, Steven, is this the new reality that we're in?

Because it looks like it's a lot more complicated, at least here in the us. Yeah. I wonder how much of this booking is speculative in nature.

Um, you know, we certainly, uh, the numbers tell us that we're in something of a data center vacancy crisis. In other words, there's not much vacant data center space available. But we've been building so much data center space, and, and I say we, um, I guess the, the, I don't mean me, but the, the industry has been building so much data center space.

It, it's actually, uh, uh, kind of, I don't want to say the wrong word here, but inconceivable that there isn't enough data center space already that, that, that this vacancy. So I wonder how much of this space is actually standing empty in anticipation of use, you know, anticipation of, uh, you know, I, i, could this be another bubble, another and maybe even an AI adjacent bubble where people are leasing data center space preemptively in hopes that they'll be able to fill it with, you know, GPUs and so on. Um, one of the stories, Mike, that you, uh, shot over to me, which was really interesting, was this, uh, Reno, Tahoe Industrial Center where they're building get this, um, this industrial park is larger than the city of Detroit.

They are building that much data center space in the Reno, Tahoe area. And it's basically everyone you've heard of Google Switch, you know, Nuova, all these companies are, you know, Microsoft, Google are there, it's all these companies. And they're building in Reno, Tahoe.

Is this a good place for a data center? Uh, probably not. 'cause the Syrian Nevada mountains are right there and they cast a rain shadow.

So there's really no, no water there. Uh, the, uh, pyramid, mid Lake Ute tribe is saying there will be soon, they will soon have to call themselves. Well, I studied urban planning and there's an urban planning joke that I'm gonna let you all in on.

You always name a new development after what used to be there but isn't anymore because you built your development. So like, you know, happy Deer Park, uh, you know, uh, you know, uh, Fox Meadows, you know, uh, Indian Trail, you all these things. Fox Meadows are neither Fox nor Meadows, right?

Yep. They're all gone because we, we paved it and we built houses and golf courses there. So the Paiute Indian, uh, pyramid Lake Paiute Indian tribe are gonna have to, uh, be the artist formerly known as the Pyramid Lake, because there ain't gonna be no Pyramid Lake anymore.

It's all gonna get drained for these data centers. It it's wild, um, that we're building that much, and yet we still have a vacancy crisis. What, what do you guys think?

I mean, is this, is this real or is this Speculative? I, I got, I have some, first of all, look, this is all tied into the AI data center two thing too, where we've got a trillion and a half dollars, you know, pledged for whatever that means for new data, AI data center space. But, you know, this brings me back to the dotcom days, right?

In the dotcom days, there was a little town outside of Boulder, Colorado called Interlochen. I don't know if you guys have ever been out to Interlocked. I was Just there.

That's right. You were on vacation in Boulder. So, you know, so, so I'm working, I'm starting a company at the Mobius data center, uh, Mobius Accelerator Incubator, Mobius Venture Capital, and that's in Lewisville between Boulder and Interlochen.

And I used have to go into interlock and lock for business meetings. There were a lot of storage companies, storage tech and mixed storage and all that stuff. But then you had level three there.

You had, um, whatever the, the Bell West from Denver was called at that time. Was there, might have been sent, I don't think it was sent yet. Anyway, there were a whole bunch of, of fiber people there, right?

And, and we had the same discussions. There was the same drive in the market. We have a bandwidth crisis.

We have a bandwidth crisis. We're not gonna be able to deliver all these resources and all this great stuff's coming online. And we don't have, we don't have the bandwidth to deliver it.

We're gonna have to deliver it over copper wire and coaxial cable and last mile and we'll forget the last mile. We don't have the first mile. And we sunk so much money into building fiber that the, the term dark fiber became, everyone knows what that means, right?

We, when the bubble burst, there were a lot of people holding a lot of fiber that we had overbuilt and there was a data center aspect to that fiber as well. Um, I, I think we're looking at the same thing here. Speculative.

Steven, I'm gonna tell you something for, according to this article, right? Like 75% of all the data center space that's under construction right now is already pre spoken for how many of those people board it on speculation and figure they'll arbitrage it when the time comes, if they haven't quite grown where they need it. Look, data center space is premium.

We, we could sell it at a profit, sublease it, whatever. I think there's a lot of that going on. Uh, I, you know, this is, to me, this is gonna be a musical chairs game and just pity the poor fool who's standing when the music stops.

I think that when the one piece overlooked about all this is, you know, this is North American. Last time I checked there was this internet thing that allowed you to put apps anywhere you want it. So not, not with digital sovereignty.

I think sovereignty makes a difference here. People are gonna want to shorten their supply chains and all of that good stuff. I'm, I'm, I'm thinking the data center up in the I'll pick Norway for the EU market is gonna be cheaper 'cause it's cooler than maybe one in, uh, I'll pick on Columbus, Ohio.

'cause I know where fu Well, but, but, but just, well, Steven has a particular fondness for data centers in his backyard, but mm-hmm. The, the thing is, and I forgot if it was in this one links or not, is clearly the data center industry is, is rallying around nuclear. And if you believe, you know, you could put up a little container size nuclear plant to run your data center, you could do that anywhere, even under the sea.

Yeah. Equinix is talking about that as they're gonna go build out some nuclear reactors. But is that gonna happen before the end of the decade, Steven?

Uh, no. Um, not at all. Uh, but it could happen at the end of the decade.

And, and that would, and that would be interesting. I mean, one of the things that, that would be interesting about nuclear and solar and other sources of cheap electricity, um, you know, one of the reasons that data centers use so much power is because it's much more efficient to use evaporative cooling than, uh, heat transfer, heat pump cooling. Theoretically, if we had sufficient power, we could use more heat pump cooling and reduce the use of water.

Um, especially if it was incredibly reliable like nuclear. So I don't wanna sound like a too positive on this overbuilding trend because I definitely think there's overbuilding and speculation going on here. But, uh, could we perhaps, uh, solve the water problem at least with more electricity?

It is possible. Now, there are some good things happening here. Some companies are looking all of this and saying, yeah, maybe we'll just go back to building our own data centers.

And they are taking over old mills in places like Pittsburgh to kind of refurbish them to become their local data center service. So that could be good for those communities. I don't know how good Ly good.

Remember we talked last Week? We did, we had this that doesn't make jobs this Automotive factory. Yep.

No. And not making jobs, but it does provide access to power and that is enough to drive your AI up. So people are starting to get concerned about whether or not they're gonna have enough capacity to run these AI apps in facts.

Some of the AI crowd is screaming about how, you know, we're gonna lose this thing to China because they have more power than they know what to do with, Oh my God, the red menace. The red menace. You know, whenever we need a boogieman, do we got it right there?

There is a peak power issue when it comes to these data centers. We are, we are seeing that it is becoming more expensive to deliver power to these data centers. And at the end of the day, the capacity, uh, for the entire system as a whole, right, is going to be delegated to availability within, you know, uh, uh, to support and infrastructure to support these things.

So it, it is, We, We, I i, I liked one of the stories was that there's a group that can do small nuclear power based on reuse, reuse of thistle material. Um, which as long as it's safe, great, right? And it's not becoming toxic waste somewhere.

Uh, and, and it can generate, you know, that additional power. I I do think that they, we are looking at, we get, even if there's vacancy, right? Even if it's not filled, um, there's still a capacity issue to the entire industry as a whole.

But you know, the des the desire of what the consumption is, level of consumption right now is at an all time high. And I don't think we can easily satisfy it. I mean, we open, AI has a lot of outages, right?

I hear of outages all the time. Uh, anthropic, I see outages in using their services. They, you know, they are having a tough time keeping up and that's gonna have a drive, uh, that a, a consumption of that vacancy space very, very quickly.

And this will become the argument for why we need to loosen the regulations in this whole space. Because we have to keep up with the pace of demand and we're gonna lose the race to, To the Chinese X number Of countries, right? Oh, yes.

Gotta keep Up with that cap. We gotta keep the world safe for democracy. Hey, I wanna love Canal Who has democracy?

Now I, You know, I don't, I just, I just repeat, you know, the slogans. Mm-hmm. I'm a good, I'm a good party member.

What can I say? Yeah. Well We Shall see.

Love canal coming to Ohio. So wait, so what, what region? So you talked about Nevada, we've also seen Arizona's Phoenix, that, that water wonderland, Phoenix, Arizona.

Great place for data centers. Texas. Texas, uh, people Are looking, yeah.

Another bird in paradise. I guess Northern Wisconsin is now a spot because they have a, well they have lakes nuclear. Yeah.

They also have a nuclear energy mill place up there, apparent. And They better not mess with them Cows though. No, don't mess with the cheese.

Not the cheese heads will be after you. Is that the thing? Yeah, I'll be after you.

No. Is it Ohio, Steven? No.

All kidding aside, is it Ohio? Like data center central or something? Mm-hmm.

Uh, yeah. Well Northern Virginia I think is where the most data centers, centers are. I Virginia.

Yeah. But there's certainly a lot being built in Ohio, Indiana, you know, Tennessee, sort of the the middle us because, because there's more water here. Um, but uh, there again, how long will that last?

Um, you know, I mean these things are, are, are just absolute water hos. And I wonder too if there's gonna be climate or perhaps, uh, weather, uh, microclimate related issues. If you Are evaporating humans don't contribute to that Tons of water.

No, No. Yeah. I don't know the earth.

The, it changes the earth. It, our climate's been changing forever is not a human issue. Dinosaurs, they went extinct because they built out too much AI data Center space.

That's exactly what it was. At, at one point though, do AI companies or hyperscalers or wherever show up in a local community and say, we recognize that these are all issues and a we will start paying your electric bill and we'll offset the cost of all these things. 'cause they're making money hand over fist.

This is determine when pigs fly. Oh, that would be interesting though. Yeah, I could, I could see that happening.

That's a real good idea, Mike. I could see somebody like a Microsoft come into a, a community and say, you know what? We're gonna build this data center, but in exchange everybody gets half price electricity from now on.

Another Volume discount. Boy, that would change the talk. Alright, there we go.

Oh my God. What a tangled web. Anyway, guys, I think that's gonna call a wrap on this excellent edition of the gang, jp Steven.

Mike, thanks so much for joining. Thank you for watching. As always, we have tech drunk TV playing.

Uh, there's some good black hat video still playing on tech drunk tv, so check those out. Uh, but until tomorrow enjoy your, uh, Tuesday and we'll see you uh, Wednesday for another great Textron gang. We're out.