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You're listening to Bloomberg Business Week with Carol Masser and tim Stenoveek on Bloomberg Radio.
One thing we like to watch is what's going on in the green space. Green firms, by the way, in the US have found something of a lifeline in artificial intelligence after being bogged down by high interest rates, shrinking funding and more recently President trump sharp rollback of support,
and our own Bloomberg New Energy Finance team. They have recently pointed out that clean tech companies that have INK deals to support data centers have seen their stocks sore this year, outperforming the S and P five hundred, and that includes the share price of our next guest. We're talking about fuel sale provider bloom Energy. It is up seventy six percent year to date today trading at an all time high, rising another eight point six percent. Jon't ne us to talk about the impact of AI and
just the business overall. Is doctor K. R. Schreider, Founder, chairman, and chief executive officer of Blue Energy. It's a nine and a half billion dollar market cap company. By the way, he was a former advisor to NASA and so much more. He joins us from San Jose. We could go on and on about your background, but we really want to talk to you. Good to have you here, it's been a while. Talk to us about how AI is specifically impacting and driving growth at your business.
Carol, it is such a pleasure to join you.
So this is an amazing time ya, in human history where we have not seen the need for power growth anywhere close to what we're seeing today. Let me put it in perspective, the amount of power that the big hyperscalers are saying they need between now and twenty thirty is equal to all the power every single family home in the US put together would need about eighty five
million single family homes give or day. All the power that they use is going to be needed in addition to the power we have today to just power the AI data service. That's how large this opportunity is. And very clearly the old model of centralized power plants with transmission distribution simply cannot meet that demand in a timely fashion.
That is the opportunity, and Bloom was purpose built to provide on site power for the digital revolution, and we are so happy to be in the right place at the right time well.
Help us understand how the company works. And you mentioned that on site power, so what that looks like. Of course, there's been so much conversation recent months about perhaps the need to invest more in nuclear power or fortify the grid, bring more power plants online. How do you see your company as maybe not a substitution for that, but a compliment to the kind of growth and develop we're likely to see here in the power grid going forward.
I think we're going to need all forms of power in very large quantities going forward to meet our ratios, you know, like energy needs. However, in the short term, if you take five to ten years, natural gas to electricity is going to be the single largest contributor to this additionality what Bloom does. It takes natural gas without
burning it, without combustin. We extract the chemical energy in it using a fuel cell and make electricity at the highest efficiency without air pollution, without noise in our generators because they have quiet, solid state and a very high reliability. For those reasons, if you are in a neighborhood that is going to have a data center, we are your best choice because we don't pollute your air, we don't use water, and we don't make any noise as we.
Generate this reliable power, so you.
Can have the economic advantage that a data center brings to the local community. At the same time, you're not compromising on your health.
So one thing I want to ask you, actually, our Will Wade does who really covers this space, and we were talking about you coming on and he said, well, wait a minute, let's talk about these fuel seals for data centers. Can fuel cells really work for this? What evidence have you guys seen that it does really work?
So, yeah, that's a great question. And this is really smart dude.
I'm just going to put it out there. He's amazing. But anyway, go ahead.
Absolutely.
Look, the issue is we are progressing so fast in our technology at ai speed that some people that have looked at fuel sALS ten years ago and have that notion of who we are don't understand where we are today as a company. We already are powering more than half a gigawat worth of data center because our total installed capacity for data centers is more than half a gigawat. So we're not a concept, we are not a PowerPoint.
We're actually producing power for these data centers. And this year alone, we have increased our capacity to one gigaw a year, and we announced in our earnings call that by end of next year we can do two gigawards a year. That's two nuclear power plants worth of power coming out of our factory next year. And you know how long it takes to build a nuclear power plant and actually commission it. So we are no longer a concept.
We are a mature technology that is affordable and can compete with other technologies that don't have as good attributes as we do. Street.
I wonder if you could talk a bit about your business model. I know that you've announced deals with with other companies, most recently with Oracle. Of course, the company that I know is building investing a lot in its data center infrastructure.
Could you.
Carisould you just give us a sense here sort of of what those deals look like, what that deal with like in particular.
Yeah, David, So our customers, here's what happens. Once we sign a deal with the customer, they either buy the capital equipment from us, and then they also sign up for a service contract. It's one hundred percent attached rate because we run those units for them and we maintain
that and we offer them the promise guarantee of performance. Now, if they don't buy the equipment as cappex, we create a special purpose vehicle using financing and we simply sell them power just like the utility would, except this is on site and highly reliable and clean. So either way, when we create a special purpose vehicle, that financial investor in that vehicle gives us the upfront money for our capital, and we also have an annuity revenue coming out of service.
So we have two streams of revenue if you want to think about it. Installed capital equipment that gets paid to us when we ship the equipment, a continuous service anuality over the tenure of the contract. That's how we make our money, irrespective of whether the customer actually buys the capital equipment or a third party buys the capital equipment and then charges the monthly rate from the customer.
Heay, care way, I'm curious. I'm looking at one of my favorite functions on the BLOOMBERGTS and supply chain function, and I'm looking at your customers. Your biggest is I think American Electric Power Company, but I'm also looking at Alphabet Microsoft. You know, yep, sound familiar. These are some of the hyperscalers tell me how they are amping up their business, because they're the ones who are doing the massive, massive AI spend, But it looks like they're a very
small part of your business. I'm just curious about what's the conversations you're having with them. Are they ramping up to do more with you? That would be very telling.
Yes, the answer to your question is very simple.
In the past, these hyperscalers would spend all their capital equipment just on building the data centers and they could simply pick up the phone and call the utility company and they would provide the power. No longer is that a reality because the utility does not have the amounts of power that these hyperscalers need. So now electricity power, which is what ultimately the data center needs to monetize the data center, is a supply chain that comes from
the common good called the utility. So they have to own that supply chain or they are to procure from that supply chain. We are very much an integral part of that supply chain, and we are having conversations with.
All the hyperscalers today.
And you've seen the announcement aetorical expect to see similar things coming soon. Our American Electric Power contract was actually for AWS, which is another high for Scaler.
I wonder if you could situate your company and this industry in the moment that we're in. So we're coming out of an administration that was doing a lot to support or encourage the adoption of alternative energy. It's way to say this administration that's not doing that, there's much less impulse to do that going forward. Here what do you see here as the ideal role of government in
encouraging the adoption of technologies like yours? In other words, if you'd like to see fuel cell technology take off be more widely adopted, what is the role of government in making that happen if any.
I think a simple role that they can play going forward is the US government, between the various government functions, the military, and the intelligence, is the largest procurer of electricity to be able to purchase electricity from technologies that are made in America. We are made in America technology. No other country in the world has the technology that
we have. So they should embrace us, and they should give us an opportunity to serve the US government, the US military, and US intelligence and make us a really strong country.
Well there, I was also curious about. And I'm looking at your market cap it's almost about nine point six billion dollars, and it is this excitement over AI. You know, there's all the money that's being spent care on the buildout, and I get that, but I'm just curious. And then there's going to be the maintenance and we might not need as many workers. And you know, we're all trying to get our head about around whether you know, the boom the bust part of maybe AI after the build out,
what is the business for you? Is it maintenance? Is it replacement values? I'm just curious.
Oh, thank you for asking that question, Carol. The buildout is just a tip of the iceberg. Why would these large hyperscalers spend close to a trillion dollars worth of capex just this year alone. If all that they're going to do is that build out, that's the training data centers. The inference data centers will be at least an order of magnitude larger than these training data centers, which are the foundation building blocks every factory, every bank, every law firm.
They're going to have inference data centers close to the edge and these edge data centers are going to be located where you all live, where people are, where equipment is, and in those congested cities, getting the additional power needed ten to twenty megawats in every edge data center, which is an inference data center.
We are ideally suited not just for the.
Large data centers, but for these edge data centers because we are non polluting.
We're quiet, we're reliable, and.
We can provide it on site very quickly. So we're super excited about what we think is a really secular phenomenon and that's happening here that's going to last for a very long time to come. This is not just a build and bust cycle at all as far.
As we see.
So when you say a long time, are you saying decades or.
I'm just going at least a couple of decades. At least a couple of decades.
All right, Good to know. We'll stay in Touch'd love to hear because you certainly have a front row seat in terms of this spend and what is going on. Certainly all the power that's needed, it's just kind of astounding. Doctor Kerr Schweder. He is founder, chairman and chief executive officer of bloom Energy. The stock David up another nine percent in today's session, and it's really been on a tear this year, up about eighty four percent.
So so interesting to talk about these companies because we focus so much on the AI providers, So as we're making these chatbots and all the developments there, but as we were just discussing the apparatus that you need to make all of that work so huge, so sprawling, and I'm just fascinating every time I kind of learn what goes into that making all of this stuff run right.
Right, We just hear about that kind of the big hyperskeleton, and there's a lot of stuff that needs to be done.
M hmm.