Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple card playing Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Along the watch for some Supreme Court rulings here today we did get one. The US Supreme Court up held a twenty seventeen tax on American owned business foreign profits. June Grosso, Bloomberg Legal analyst that joins us here in our studio.
Not one of the world.
Sexy ones, but not even on the most watch lists, maybe on Bloomberg's most watch These are taxes right. Berties care, but the average American citizen who's looking for the hot button issues doesn't care about this. I mean, if they had not ruled this way, it would have sent the Internal Revenue Service into a frenzy trying to, you know, restore taxes that were paid and also some of the
you know, the rules that they have. So this basically was a two people who owned a minority stake in an Indian company in India, and they said that they shouldn't have to pay the taxes that were allocated to them because they hadn't gotten any profits from the company. And you know, this is the sixteenth Amendment, which I can't read. I think law school was the last time I ever heard about the sixteenth Amendment. And so you know, the justice it says, this is no different than any
other tax. And the fear was that this would enable a wealth tax, if a wealth tax ever comes. And that was the only fear really from this case. So it's seven to two. That tells you that there wasn't much problem.
And what else are we waiting for?
What are those hot wepon issues over my gosh, we're waiting Well, first of all, we're waiting for the abortion case from Idaho about state law that basically, you know, makes it only possible to have an abortion if the
life of the mother there's in jeopardy. We're waiting for a gun rights case, which is based on the Second Amendment, which is whether there's a there's a law, a federal law that people who have domestic violence abuse charges against them or who have this the man in this case had a domestic violence temporary restraining order can't have a gun. That's another one. There's there the Texas and Florida social
media cases. You know, whether or not social media companies are allowed to look at what they have and pick from what they have and knock things off their platform. There's also there's a case that will make people's eyes sort of glaze over, but it's really really important. It involves something called Chevron defference. And this involves every agency agencies, whether or not you're going to give deference to an agency's interpretation of a law that's ambiguous, or whether the
court should be the one to interpret it. And so if and the several of the Conservative justice have been trying to get rid of Chevron deference for years and the question is whether or not. And it's something that conservatives have been trying to do because they don't like agency authority isn't a.
Part because of the EPA, right, because the PLA has like large light. I know, it goes all across it's.
The EPA, it's banking, social security, you name it. Would anything involving an agency this would affect. And I think the Labor Department is the department that has already started not relying on Chevron deference in proposing rules because they're afraid of what the Supreme Court may do here. I have to look up, but I think it is a labor department.
June Grosso, Bloomberg Legal Analyst.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty.
You also want to get to some of that economic data that broke earlier Today, new home construction in the US slumped and made to the slowest pace in four years, as higher for longer interest rates sapped the housing industry's momentum.
From earlier this year. Drew reading, we pay.
Him to do this stuff. He's a home builder analyst at Bloomberg Intelligence. Drew what's happening in the home building business?
Construction?
Yeah, so a pretty big myths on the headline today on the housing starts number, not all that surprising. You have to remember rates went up to seven and a half percent last month and they're still hovering at around
seven percent. We also had some week data on the home builder confidence side, you know, but these numbers are also being impacted by you want to parse out what's happening in this single family side versus the multifamily side, and the way we tend to look at it is non seasonally ad just on a year of a year basis. So we had total starts down twenty percent, which is a pretty big number, but single family starts were actually up three percent and multi family is down fifty seven percent.
So that's a lot of.
The story right there. And if you look here to date, starts are down about four percent, single families up nineteen, multi families down forty. So that dynamic is one thing at play. The other thing that we've talked about in the past is the relative advantage of the big, well capitalized,
publicly traded home builders. And we just had some data from Lenar who just reported results which lines up nicely with what we got just got on housing starts, and if you look at over the last six months, their starts are up about twenty percent year every year. So you know a couple of stories. It's the single family side and then it's the big public builders.
Well, what do we learned from KB home on that front, because that usually caters to sort of the entry level buyer. Lenar are more high end.
Yeah, KB had great results pretty much across the board. You know, their results told us that demands remained strong, that buyers are still responding to the use of incentives. It also tells us that incentives probably aren't going away
in the near term. You know, when we came into the first quarter, there was an expectation that, hey, look, rates came down to you know, six and three quarters, maybe builders are going to be able to pull back on their use of incentives a little bit and that would help margins in the back half of the year. But it looks like with rates back at seven they're going to remain elevated, which will put a little bit
of pressure on margin. So it's it's a demand versus margin story, and buyers are still responding to incentives.
True kind of where are we in this country in terms of supply of housing? I know for a while the story had been we're at a deficit, there's not enough housing.
Is that still the case?
Yeah, that's a great question. And you know, one of the main speaking points for the builders was there's nothing for sale on the existing home side. People don't want to list their homes because they don't want to trade in their rate. We're starting to see a little bit of a shift there. If you look across the country, inventories are up about thirteen percent in the last month. That being said, if you take a step back, they're
still down about thirty percent from pre pandemic levels. But what's interesting is kind of what's happening across the US and if you look at certain markets, you're starting to see, you know, some warning signs and you know, some of the ones that come to mind our Texas and Florida. You know, in Florida you've got inventories in some cases rising over fifty percent wow, and are actually above twenty nineteen levels by you know, fifty to seventy five percent.
A lot of that's concentrated in some of the West and Southwest markets. But it's something certainly to keep an eye on because you know, as that inventory increases, the advantage builders have had diminishes.
Huh, that's interesting. What are some of the other sort of hot spot areas. We had a great piece out talking about was it Tennessee? Was a Tennessee that is attracting all the people from the west and east coast and it's sort of pricing out all the people that actually live there. Like, how do big waves like this like we saw in Texas, like we did see in Florida, how does that wind up affecting the housing market.
Yeah, there has been a lot of movement out of some of those high cost markets, you know, from coastal California and maybe Inland and then it's like Las Vegas and Phoenix. But we're seeing from a demand perspective is kind of interesting. At the national level, demand in the new home market has been relatively strong across the board, but we have seen markets kind of move in cycles.
So if you look at the hardest hit markets back in you know, the second half of twenty twenty two when rates really shot up, you had you know, California, Washington, all the markets across the southwest. Those have actually come back pretty strong. And it's now some of the markets that were leading. You think about the Texas is and the Florida's, which are the two largest markets, are now starting to soften a little bit from both a pricing
and a sales perspective as inventories start to rise. So you know, those markets big picture are still benefiting from out migration into some of the lower cost markets. That's why you've seen the Southeast and Florida do so well. But at the same time we are starting to see a little bit of slow down there.
You know, a friend of mine just put her house on the market yesterday and I told her, I don't eve think you can get to your open house on Saturday. I think you can have like a Jillian Offers come in and you're gonna get So we'll see.
I'll check in.
But just one of the things, you just don't see existing inventory coming off to the market that much. When it does, particularly in a you know, a pretty middle of the road price range.
I got to think it's just going to be snapped.
Up, like versus six percent. Interest rate doesn't matter as much anymore as what you're.
Saying, Yeah, yeah, yeah, I don't know. We'll have to see.
So, Drew, is there a sense that rates have to come down for existing homes to really move well?
I think you want to see rates get into that six and a half percent at least to see things start to loosen up a little bit. But what's just what's interesting, and Alex you mentioned it six verse seven. There's not a whole heck of a lot of difference there. And you have to remember the people coming too the market now are coming with that higher rate mindset versus you know what they were a couple of years ago.
So people have certainly started to adjust. And at the same time, you know, we're still transacting at these higher interest rate levels, So that mortgage rate lock and effect that we've talked about previously, you know, it starts to gradually loose in a little bit because you've had more buyers purchasing at higher rates.
All right, really great stuff drew you the best. We appreciate you, Adurenni. He covers home building for a Bloomberg Intelligence.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple card Playing and Broud Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Alex Delpaul swinging' live here on our Bloomberg Interactor Brokers Studio.
I'm gonna story here. Denlt Technology shares rose Thursday.
After chiefing the second officer, Michael Dell said the company is building a Dell AI factory for Elon Mus's startup XAI alongside Nvidio Corp. A lot of big names. In the first opening sentence there stick in with Woojin Hoo. He covers all the tech stuff for Bloomberg Intelligence, Which what's going on here with Michael Dell.
Yeah, so Michael actually posted a Twitter post on some of his AI server racks that's going to go over to XA, which is Elon musk AI startup. Uh. Elon Mus actually followed up is saying, hey, yeah, this is happening, but we're only gonna split. We're gonna split the deal with both Dell and super Micro, and you're seeing super Micro rise as well.
Can you just walk me through like what this all looks like? Like when I hear that headline and they're gonna plot provide servers for AI x tech whatever Twitter Musk thing?
What is that?
Yeah?
So, so essentially you need specialized servers to help build or help support large language models. If you think about the AI build out over at Meta or at Google, uh, you need you know, hundreds, well thousands of GPUs to help support it. And each of these server racks are going from roughly one hundred thousand per rack for a traditional server rack, and what I calculate it is gonna go to about a million dollars per rack all closer together.
So you know, you know, we've published that this one deal could be upwards of billion dollars split two ways between Dell and super Micro.
All right, I'm going to ask the out steal question.
As I'm looking at this photograph that was part of the Twitter spot for mister Dell. I see a big factory, lights, air conditioning, all that kind of stuff. I mean, how are they going to power all this stuff? Did they ever have to talk about that?
I love you asked this question.
Yeah, well, look, Elon Musk, I've actually seen some of the layouts or where this AI factory may be going to, and they've actually allocated the power for that. Now. Near term, I think the power needs should be fulfilled. You don't do the planning without the power. But longer term, I do think there might be some issues in terms of getting the land necessary, the data center land necessary to build out these AI data centers because of the amount
of power that they're going to suck up. Some solutions may be nuclear, small nuclear power plants or set aside to these data centers. But there's some regulatory issues along with that.
I thought I was reading that potentially something might be sent to President Biden today that would make it easier for nuclear and I wonder if that's all sort of playing into the energy transition, but also the big data centers. So you said it could be worth as a three billion, So they enter into this agreement, when does like Adell and super Micro book that revenue, Like, does that show up on its order book?
Well, I wouldn't be surprised. That's already in the backlog numbers. Okay, in their backlog numbers today. One of the things, the metric that I'll share with you is that they did one point Dell did one point five billion dollars in AI server sales in calendar twenty twenty three. I have them going in around seven point six billion dollars in calendar twenty twenty four. Super Micro they're probably on pace too,
about eighteen billion dollars in calendar twenty twenty four. What this is telling me is that not only are you getting more AI or larger AI server deals, but you're getting more AI server deals going forward.
So Dell, super Micro those are two ways to play. What else in your space kind of fits into that AI theme here?
Well, I mean, you know, my colleague Countries Obiani, he covers the chip space Nvidia. Everyone knows Broadcom, which has rallied over the last few days. They are a leading AI chip player on the networking space of riskent Networks is one of the vendors. To know that. There are some other guys such as Cisco and Hpe, but there'll be more enterprise focused at least for the time being, and won't have as a sizeable impact from AI on their numbers, at least in the near term.
So when I'm talking in panels and stuff and I hear people like, Okay, this is definitely a bubble. It will definitely burst. We don't know when and how and why. We definitely want to buy puts, Like, we're definitely in a bubble. We just don't know what that looks like. What do you who are coming through the numbers think?
Yeah, So we publish our valuation though for super Micro today, and I'll tell you that, you know, much of the stock rise of the last couple of days or the last year or so has been more earning, straighter than anything else. And it goes back to the fact that a lot of these AI systems have this humongous aspos boost.
I mentioned one hundred thousand dollars a rack. The latest generation of Nvidia's servers, they're going to be about three million dollars per rack, and that's going to support their twenty five billion dollars in fiscal twenty twenty five expectations. And I think that if you think about a housing boom, we are going through an AI housing boom right now. And this is going to last for the next couple
of years. Now, when does this housing boom bust? Still too early to tell, because first it's going to be the cloud. The enterprise is going to start following. I don't know how big that enterprise opportunity is just yet.
Sense there would how much are this incremental AI spending is in fact incremental to overall tech spending or is it just taking it from other buckets?
Yeah, you know, you know, that's a good question. And if we look at the companies or the sectors from a sector basis, within hardware, we've seen some of the traditional hardware lag in terms of spending. I do blame some of the declines in hard traditional hardware spending to a mix shift to AI. But the other thesis that's going around right now in the investment circles is that, well, it could also mean that they're going to spend less
on software as well. Right, So from from a larger from a from from a larger perspective, there might be spending that's being pulled away from software to build out the infrastructure. Over time, as more software becomes AI enabled, the investments are going to fall back to software.
So the whole I think with Nvidia like trying to talk about software and not hardware as much.
What is that?
Oh?
Yeah, so there actually is a more. Nvidia is also a software name, right, you actually need to build a code to drive the GPU chips very efficiently.
Right.
And the bigger the developer user base. Right. Think about it as a programmer for Microsoft or programmer for Oracle. Right, You're trying to build this big developer user base so you can have your your AI programmers to write to the Nvidia chipset. Right. There's two benefits to this one.
The AI chip sets try to leverage the software to optimize the energy consumption, So there is an energy benefit to this and also two, you're trying to lock up more developers to write to the g Nvidia GPU so you can gain or grow your market share in the GPU space.
All Right, we're seeing more and more ways to play AI. I mean, there's the chips, there's the hardware of the software.
Don't know how he keeps it. I don't know how would you keep it all straight?
I gotta be honest. Helps, thanks so much for joining us. Wi Jinho.
He's a senior technology analyst the Bloomberg Intelligency's down in our Princeton, New Jersey office here giving us some more views on how various companies within the tech stack is the tech geeks say this case Dell Computer, super micro stocks moving today on more servers being installed for the folks that can be running these big models.
I guess and just go and it just goes again. And then you pair that with those that just watch momentum bubbles and they get increasingly worried. So it's it's really hard to square those two. At the end of the day.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays ten am Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa playing Bloomberg eleven thirty.
Alex Deel, Paul Swing you live here in our Bloomberg Interactive Broker studio or streaming live on YouTube.
So you can head over YouTube.
Dot com and search Bloomber podcast and that's what you'll find. This all right, here's story getting a lot of readership today by McDonald's. McDonald's US chief says the company is ready for a fight, and in order to win, the burger chain is pulling out one of the most potent weapons in its arsenal, the value meal. So they're gonna be putting some chicken and you get fries, you get a coke, all for five bucks.
That's pretty darn solid. What does it mean for the restaurant company? So let's chick in with Mike Halen.
Michael Halen, he covers the restaurant industry for Bloomberg Intelligence. Mike, I guess you know the big guns here for McDonald's.
Here the value meal.
What's going on in the fast food business these days?
Yeah, listen, they have scale.
They have scale that allows them to offer prices that some of their competitors can't match, right, And so you know what we're seeing now is, you know, consistent traffic declines. Same store sales have been pretty weak now for about a year in the restaurant industry.
A lot of that is due to low income consumers. Darden on their earnings call.
Today said, it's you know, seventy five households with seventy five thousand or less in income, and the customers that are really struggling our fifty thousand dollars make fifty thousand dollars a year or less. So you know, we're still seeing this case shaped recovery. And so you know, about a third of McDonald's business is that low income consumer. You know, the traffic declines can be mostly attributable to
those customers visiting less frequently. There's been a lot of bad press about McDonald's and some of these other fast
food trains and how much they charge. You know, they went they went viral because one of their stores, we're charging eight teen dollars for a big back meal, right, and they want to kind of level set people's expectations about what they're going to pay inside the McDonald's and kind of get people focused back on the fact that, you know, you can still get a lot of value on that McDonald's menu.
Do they still have a dollar man, Yeah, it's.
The one two three dollar menu.
There's not many items for a dollar, if any. I think everything's at least a dollar in change right now.
But you know, the timing, you know, the timing makes sense.
You know, last month, casual dining chains actually outperformed quick service team star sales for the first time since last January. And I think a lot of that has been this bad press about how much quick service chains are charging, and chains like you know, Chili's have been kind of playing into this. You know, they're saying, you know, look, we have a ten ninety nine three for medial. You get a lot more food, you get a better burger,
and it's cheaper than a big mac meal. So McDonald's is trying to turn the tide again here.
You know, I'm looking at the the FA function for McDonald's. I mean, they got gross profit margins, you know, the kind of mid to high fifties.
That seems pretty darn good.
That seems like, if they wanted to, they really could go into a significant kind of pricing war here. Is that something that McDonald's thinks about or they just don't even want to get into that game.
Well, listen, I mean, you know, McDonald's is heavily franchised, and so they're going to have stronger gross and operating margins than some of their competitors. You know, So what we'll look at more as is the restaurant level margin. And their's is good.
It's not.
Like leaps and bounds better than the competition. You know, that's more like a shake Shack or a Chipotle. You know, the fast casual chains tend to have that have stronger margins and on that end, But you know McDonald's they do do almost three million store and so they have wider restaurant margins, wider margins for their franchisees than a Wendy's, a Jack in the Box and Sonic and you know, they they leaned heavily into discounting and during the Great
Recession and it enabled them to take share. They massively out performed their smaller competitors. So yeah, they're they're they're this is they're they're moving towards this, right, they want to establish that that dominance uh in the industry, but they're.
They have to weigh.
The franchise e earnings with that, right, because if they suggest a five dollars meal deal and the franchise e say, I can't make money off this, I'm not going to run it well, and then it's not going to happen.
Right, So does that put like Barking in like a better spot since they have less franchisees? Am I making that up?
No?
Burger King is also most of the quick service chains are very heavily franchised. It's pretty easy operations, it's easy to train new employees, and so they're they're they're typically very heavily franchised.
Burger King's in a.
Better position this year just because they're lapping a few years of very weak results.
So that's where I think Burger Kings advantage comes in.
It's just it's just weaker year over year comparisons, and and management has has injected you know, billions of dollars into that franchise system, right, and so they're renovating stores, remodeling stores, they're marketing a lot heavier and so that those are all benefits for Burger King. And it could be you know, hurting McDonald's a little bit here, but
you know, McDonald's is the eight hundred pound gorilla. They have top notch marketing program right, Like I said, at the top they can offer prices that even Burger King can't match. And so so that's why we're seeing kind of what we're seeing. Right, it's a it's a week and in our environment, and McDonald's wants so much to keep and grow their share.
If a consumer's not going to fast food restaurants, what is the consumer eating? Are they just staying home and cooking at home?
I think on the low end, that's what we're seeing.
Yeah, you know, it is a case shape recovery hiring.
High income people are doing better.
You know, we're seeing stock markets, US stock markets at all time highs, Bitcoin near an all time high.
Home prices remain elevated.
Right, and so high income consumers are still doing pretty good. But even them are showing some even that cohort is showing some some weakness. Uh, and they're kind of trading down into the QSR cheaper occasions, and we're seeing low income consumers fall out. But you know, so we're seeing guest check averages rise, but we're where traffic is definitely down. You know, like I mentioned, it's low income consumers are
about a third of traffic. So chains kind of have to try to balance it, right, Like they want to have value you for their low income consumers. They want to offer higher priced items to kind of attract some higher income consumers. And what we've seen is the chains like McDonald's and Jack in the Box that have been able.
To draw in the high income consumers.
Chipotle's another one, have outperformed their peers since the start, since the start of the pandemic.
And I should point out to just take a look at Kroger's results, right, Like com sales rose just half a percent last quarter, so yes, at topped analysts what they expected, but growth has really stalled. I mean, you had business normalizing and you got really high inflation, and it's a cloudy picture. So even the solution of just buying and cooking at home can be pretty rough. Hey, Michael,
thanks a lot. Michael Hale and Bloomberg Intelligence senior restaurant and food service analysts, who I think is deep teas here everyone back with us on Monday in studio.
In studio, he finally found his train ticket, which he had lost for several years.
I mean, it's hard to find to be sure back to and it's going to be about the back half for restaurants and quick service guys. Who's winning and who's not. How all that's going to want wind up playing out?
Ah, you're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business Act. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
All right.
Joining us now is a very special guest. It's Thomas Eely, founder and CEO of highly On Now. Hilyon is quite interesting because I covered this company a few years ago when it was a long haul EV trucking company. They had a power train that they were calling the hyper truck eRx and it was going to be an EV trucker and it seemed like it had a lot of legs, it had a lot of interest, and then the company pivoted instead to become basically a power generation company. And
it's a really interesting pivot. Yes, there's some similarities, but a really interesting pivot nonetheless, and Thomas joins us, Now, what's happened in the last few years, tell me about your business shift.
Well, Alex, you outlined it perfectly, so you know, the last handful of years, there's been so much momentum behind EV specifically in the trucking space, but the reality is, over the last twelve eighteen months, we've seen a continued decline to the point of many of the companies in the space are facing bankruptcy or have already filed for bankruptcy. They can't raise additional cash, and so we were in a unique position where we still had a strong balance sheet.
We had about three hundred million of cash on our balance sheets starting at the beginning of this year, and we had a unique technology in house as well, that is a generator basically a mini power plant that can be deployed outside of commercial buildings, data centers, EV charging sites, and so we saw that it was best to pivot the company to focus on that and actually move out of that EV semi truck space.
All right, so you have this Carno platform. Tell us about that.
Yeah, So think of it as, you know, a power plant that's the size of like the bed of a pickup truck. Almost it can produce two hundred kilowats of power and it's designed to be able to be stacked together. So if you think of an EV charging site, you're maybe going to need a couple of megawatts of power, so maybe you know ten carnogenerators, or if you think of a data center, you maybe need forty megawats of power.
But if you then go to the other end of the extreme, you think of like a commercial like store like a Walmart or place like that, you're in need about that two hundred kiloots of power size. So our thought is, as you come in and you actually make this generator your primary power source, so you remove your dependency from the grid, you can actually make electricity cheaper with this gen set than most electricity costs out there.
And now you kind of have this model where you now make power outside your building and you use the grid as your backup power supply.
So what the two things kind of relate together is that what was wrong with the EV trucking part. Was it that it was too expensive to build at scale or was the and not there.
Yeah, so five years ago fleets were saying they're going to buy EV trucks in mass volume, and that you know, by this time, you know, all most trucks being sold, we're going to be evs. The reality is is EV adoption has gone extremely slow, and fleets are saying, you know, we're going to buy onesie tuoesie trying for a little while,
maybe we'll buy more. But what's really happened is people are waiting until the government mandates that evs need to be adopted, and we're seeing those dates continue to get pushed out to the right. And in addition to what you mentioned of the costs of EV trucks have continued
to go up as well. So we're really just seeing this this situation where adoption isn't happening anywhere near the rate that was initially expected, and so being in the public markets, you know, the you know, companies needing to raise more cash and stock prices continue to decline, we just thought it was best to get out of that space and focus on an area where there's actually a lot of momentum.
Right.
You know, we talked about AI that needs a lot of power generation, So how.
Does the so what can you take from the EV trucking to the power world, Like how were some things transferable.
Yeah, so this generator, the Carno was actually something we acquired out of GE and it had been a project that we're working on with General Electric for a few years where we were actually going to put it as the generator inside the truck to charge the batteries while you were driving, And so we acquired it out of GE a couple of years ago. And we always saw it as a solution initially for trucks, but we could could go into the power generation space. But as you know,
we've kind of seen the market shift. We saw that just going after power generation and stationary power first made a lot of sense. And then you know, it's still a technology that we see could be viable for the EV trucking space down the road.
Talk to us about again on this new energy platform that you have. Where are you in terms of in your timeline of deploying these making sales, who do you target to sell to that type of thing?
Where are unit development there?
Yeah, so we're at a point where later this year we'll actually be getting units out into customers hands. So you know, it's been a north of five year development program both when it was in GE and now at highly on and so we're right on the cusp of just about to start getting units out there to customers. A few key markets we're going after. One is that
EV charging space. Another is actually using waste gas. So if you think about like oil and gas sites, they flare a lot of gas right now, the carnogenerator can actually be a great way to take that gas and make electricity out of it. We're going after commercial applications like data centers, commercial warehouses, you know, hotels, hospitals, those type of applications. And then another one which is kind of unique, is actually the marine space, so powering ships
and vessels off of this gen set as well. One of the unique things with it that we haven't talked about is it's a fuel agnostics so it can run on futuristic fuels like hydrogen like ammonia, but can also run today on fuels like natural gas and diesel and propane. And so for customers, you're kind of getting this like future proof solution.
That's interesting. So it is transferable. What is the demand like.
Yeah, so our generation demand is very strong right now. I mean, just to share an example with you, Like we obviously knew the EV trucking space. Well, when people would go talk to their utilities about getting a grid interconnect, trying to get electricity for their chargers, they're being told it's like two to three years just to even get access to the power, to get connected to the grid.
And then in some instances, some parts of the country, there's being told there just isn't enough power available at all. So we see a few things happening where you've got ev charging, you've got AI for data centers, You've also got industrial applications moving over to electric, so the demand on the grid continues to increase. But we're all also in a position where new power plants aren't being made and infrastructure isn't being upgraded at the rate that it
needs to be. So that's where we're seeing the market really shift to these kind of distributed power generation models where you make your own electricity locally to power your facility as opposed to being reliant on the grid. And so we see a massive shift happening to that sort of market over the next few years here, and it's already started, which is great to see.
So I mean, I guess I mean you called out one of the big headwinds I guess facing the EV business today, at least here in the US, and that is whether the US electrical grid can even support the transition to EVS. You're down in Texas. You guys have your own grid, but how about just a big.
Picture, Can the US grid support the transition to EVS.
I think it's going to be a tough one without this distributed power generation model. Just this morning in Texas, we had a power blip at this facility. I was on a call this morning with a colleague in Michigan. Her power was out. I mean, power is. The reliability of the grid is a real problem right now. And one crazy stat is if you plugged in ten semi trucks into the grid, that would consume as much electricity
as the entire Super Bowl stadium during game time. So wow, it's a crazy amount of power that these trucks will draw. And I don't think the grid's able to handle it today, at least not universally across the country. And if you do want to support that type of demand, you need not only the power plants, but then you need to go build transmission lines, you need to set up the
local infrastructure. So it's kind of this ripple effect versus you could just put this generator down and start making your own electricity locally.
It's really interesting stuff. I wish you luck on this one. Let's check back in and see how it's going. I know that this is all a huge transition pretty much for everybody and companies included Thomas Healey joining US, founder and CEO of highly On joining us. But it is so interesting, right because it's I just think his transition is so interesting because.
It's too hard.
Evs are too hard if the demand's not there, how do you stay in business?
I don't know how you do it as a public company.
I know stock's been been down and they've been drawing down on their cash that they got from their IP. I'm not sure if there was a spacronaut back in the day, but that's kind of an interesting test case to see how a company, as a public traded company can completely pivot the business.
And I remember too like Tesla, Yes, it makes cars, but it's also a storage play. It's also a battery storage company, and in which case you wonder, like where the value of EV's actually is.
This is the Bloomberg Intelligence podcast, available on Apples Spotify, and anywhere else you get your podcasts. Listen live each weekday, ten am to noon Eastern on Bloomberg dot Com, the iHeart Radio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal