Best Of Forbes 2023: Innovation, Science & Technology

generative AI is in a sense the second wave of transformative AI that we've experienced over the past few decades and that first wave was really around ranking systems and so you're thinking here about Google search Facebook YouTube's recommendations Tik Tok all of this is around choosing sort of the ranking of information that was already created by people and this seems like a small thing it's just ranking a set of items but when you're ranking everything that Humanity has created that actually affects the incentives of politicians of entertainers of journalists you're now restructuring Society just by that simple Act of ranking because you're ranking for billions of people every day all the time the second wave is where we go beyond ranking to actually generating that content this second wave of transformative artificial intelligence we don't know fully what those implications are going to be the whole way in which we make information and the basis of communication across Society like that is all going to be [Music] rewired at its simplest generative AI refers to an AI tool that is generating or creating content that could be text audio or video you're taking a really large data set and you're inputting a prompt and then you're outputting something completely new that is learning from all that info and creating something to answer the prompt we've covered AI for some time at Forbes but on November 30th when open AI launched chat GPT it's tool that allows you to you know ask for a recipe or a sonnet in the form of Shakespeare or a script in the form of you know Alex as movie star which my boss did he also asked it to write an annual performance review for me which I did not appreciate when we saw everyone playing with these tools we thought okay AI is really breaking into the mainstream here it's not just something that the tech bubble cares about and it's time to ask questions about who's really going to make money here how real is this hype and what will be the business impact open AI is a really interesting company it actually started as a nonprofit it was backed by Sam Alman who used to run my combinator as well as the billionaires Elon Musk and Peter teal and it was formed with the idea of creating an artificial general intelligence this is a real kind of sci-fi AI one that is conscious self-learning that could theoretically rethink capitalism as Sam Alin has said or could potentially outstrip human Control building that AGI was something that open AI could not do as a nonprofit it couldn't raise enough money to do this so it needed to create a for-profit entity openi does that in 2019 and that's when Sam Alman becomes CEO full-time and not long after we've seen the the company become a key Ali to Microsoft which has reportedly invested $10 billion recently at a $29 billion valuation this current wave that we're seeing this generative AI wave has been kind of building up for the last couple months now really hitting an inflection point probably summer of 2022 we were slowly seeing these different companies starting to tease out you know new releases like open AI launch ing Dolly 2 in beta and then stability AI announced stable diffusion this text to image uh generation model I think really it was the culmination of all these different models that reached a viral moment you know really got to the masses I would characterize the consensus as cautiously optimistic you know I think there's not so much pessimism around like AI as a technology anymore I think more than like optimism it's kind of gotten to a point where people are accepting that this is an inevitability now what do we do with this inevitability you know different folks have different levels of bullishness on where this technology can take us or what the potential harms and risks of it are but uh for the most part people seem to be optimistic that we still have time it's still kind of in our hands to kind of control the destiny that this new AI Paradigm Shift brings I think the way to look at this is if Steve Job said that you know the Fone was a bicycle for the mind this technology is really a rocket ship for the mind the most exciting application I think of this generative AI is with what we're building allowing humans to communicate visually so you can take what's in your mind and create it almost instantly whereas before it would have taken days or months even for skilled individuals to do that be it art or PowerPoint or whatever else I think we've also seen the impact of this also emerge in other sectors such as education where students are now using it to help with their homework structuring or writing and I think we'll see it across everything whereby again anything you can imagine you'll be able to create now at stability are differential is that we are open source so we release our models so there's an amazing Community that's built around it if you look at popularity on the code base it's outstrip things like Bitcoin and ethereum in a few months what took them 10 years the types of applications that we're seeing are largely around basic creativity at the moment but now they are extending into combining these things to create video game assets to create artwork of various types to create new textures and things like that to extend the capabilities of creators and to make more people creators I think where it goes from here I think we'll see more and more business workflow use cases definitely expect to see these big tech companies like Microsoft and Google that are building some of these models and kind of working with companies like open AI on these models to start integrating them more deeply into some of the existing software we know so for example we could expect to see generative AI use cases in Microsoft Word or Microsoft Outlook Google Docs stuff like that I think one of the open questions remains are we going to see like an entirely new wave of uh AI native applications kind of become whole new generation of software tools that people use or will it be kind of the existing options that are able to integrate this AI faster and stay ahead of the curve for example Adobe putting this AI into Photoshop versus entirely new like AI powered photo editor coming about speaking to Bill Gates about AI I was honestly a little surprised just how excited he was I asked him how does this compare to previous technological Cycles like the the rise of the PC or the PC with you know Graphics interfaces that allow us to play games and do a lot more you know graphically inclined things on computers or even the internet itself and Bill said that he thinks this is one of the four big technological changes of his lifetime and he said that he thinks AI will deservedly be the hottest topic of this year overall I would say Bill Gates was optimistic about the impact that these AI tools could have particularly in the developing world where he spends a lot of his thoughts with his foundation he was thinking about how in Africa some people may not have access to human doctors you can do a lot as a foundation to try to get doctors to that place or train new doctors but an AI tool that could answer some basic medical questions could fill a need without challenging doctors professions similarly he was thinking in you know lower income neighborhoods here at home in the US there might be some math tutoring or basic homework support or teaching support that a tool like this could use for students who don't have access to human Tutors or don't have a lot of time with a teacher so Wei you can do existing use cases better than before right so you can improve search for example you can improve moderation in social networks you can improve communication by adding uh virtual backgrounds for example to to this video you can also create completely new use cases that were just not possible before right you can generate image from text you can generate 3D from text you can like recognize voice and translate that uh you can create better convers stal AI so it really opens up a new range of possibilities the same way the previous generation of technology created the ability for machines to calculate better or to retrieve information better with search engine there's a whole range of new use cases that weren't possible before are now made possible by Machine learning the hype that we're seeing now is just a catch up on the previous wave of of usage this is very different for example than crypto where you had a lot of pipe but very little usage I think it's quite sustainable uh and as we see more use cases uh more usage more companies investing on the topic in 2023 uh hopefully it's going going to become more and more of a mainstream topic and more and more Central topic what we want is uh for everyone to understand yeah understand what it can do what it can't do some of the challenges associated with it for example biases are a big challenge for AI systems today we want everyone to you know understand that so that they can you know help us uh mitigate some of the risk uh and and make sure it it doesn't create more challenges so there are number of issues that fall into different Cate categories that still need to be resolved with this AI as uh flashy and exciting as some of this new technology is it's still prone to errors and mistakes AI practitioners call it like hallucination where you might ask open AI CH gbt a basic math problem and it will very confidently give you an answer but it turns out the answer is completely wrong that could you know in a business capacity hurt a business if they're kind of using inaccurate information taking it at face Val value beyond that there are kind of more deeper ethical concerns that have not been addressed one of them being the copyright and IP around this new AI the way that this generative AI is possible is these companies have trained their AI models on just massive massive quantities of data and a lot of that data is pulled from the internet you know so take an example like stable diffusion which is trained on millions and millions and millions of images around the internet stability AI which is one of the companies that we write about in in our coverage and is behind stable diffusion they've been sued recently by Getty Images which is alleging that they used millions of Gettys photos to allegedly train the models without paying Getty a dime for their work there's also a lawsuit going on against openi Microsoft and GitHub which is owned by Microsoft from programmers who believe that the code that you can get which is usable it's not perfect but can actually save time for some programmers today that that code comes from programmers who similarly were not compensated for their [Music] work [Music] the rate of change that I expect that we're going to be seeing over the next few years makes me concerned that we are not going to be ready for what's coming next and yes we're better at the issues from 10 years ago we still haven't even solved the problems that have been caused by the the old transformation where ranking systems sort of reshaped our society right now there's two main sort of camps within the tech World in terms of how we're going to govern this technology and one is we're just going to give everyone the power as an individual to do whatever they want with it and the other is that the tech companies themselves will decide what you can do and both of those don't seem really great like yes it's nice for us to have individual power but if everyone has the power to mess with democracy everyone has the power to harass others to extort others to generate scams quickly on demand like that maybe isn't really good for the world there's a question of what else is there right and that that is what democracy tries to do it's it's can we take that question of how this technology should impact society and bring it to a process where those decisions are being really considered in terms of their impacts but the challenge is that our current democratic systems are frankly too slow and the AI advances are both incredibly quick and they're Global one of the most terrifying and in in many ways exciting applications of generative AI is to copy your voices that's in incredibly useful for translating across languages so you can have you just speaking in any language and it really sounds like you but the downside there is someone can use that same technology to just copy your voice saying anything they want we had companies in the space that were really responsible as well as one could be and they they had a lot of safeguards to make it so that you really it was really hard to copy someone's voice about their consent but that all changed very recently when a number of companies just came out without doing that it's sort of like you're lowering the bar for responsibility because these new entrance are coming in because it's cheaper to not build in that exra and it makes easier to use and so we can't live in a world where people keep undercutting those responsibility practices there is real risk that we are moving toward a world where people just don't have any sense of what is real and they just sort of give up on that and we've already seen that obviously in many parts of the world the sort of what I've been calling reality apathy that is not the ingredient that we need if we want to have functional Society functional democracy like Society is built on trust economics is built on trust politics is built on trust and we get into a really dark place when we don't know what we can believe I think there it's very difficult to see where this AI will not impact anywhere that a human and a computer interface from better chat Bots to the whole of the media industry changing to create faster better output and even areas like education and Healthcare augmenting human potential in these areas it's hard keeping up to date with what Jones fi look likees next week let alar one year or 5 years but I think in the next few years we're going to see video we're going to see audio 3D the ability to really create any world you can imagine and I think that will be amazing I think we'll see it in areas like education and Healthcare and others really helping and enhancing our ability to Aid people and I think that's going to be great to see because it can integrate into existing systems unlike other things like maybe a metaverse or web3 that always created their own systems and there was never really immediate value for a couple things that have shocked me about AI as I've gotten to know this space one is that I feel like we're not all as unique as we think we are these tools are pretty good at predicting what an email to reject a PR pitch looks like or right back at me you know the kind of way to send a PR pitch to someone like Alex the reporter that kind of communication is actually pretty well predicted and so I think that going to see these AI tools you know being useful there much earlier than I would have guessed Sam wman declined to be photographed for our forb story we did photograph Greg Brockman and a couple other leading entrepreneurs in this space but for Sam we thought it would be really fitting to use his own tools to generate an image of himself so we put into a prompt in open ai's image generating tool called dolly that said Sam Alman on the cover of fores we got some weird ones back including uding a cover of sort of a blurry faed uncanny valley Sam Alman like person holding a cover of a magazine like Forbes with the same image of blurry Sam Alman we've already seen some media companies starting to explore how to use these AI tools themselves some elegantly some actually getting in trouble for publishing stories written by an AI tool and not disclosing it right away I think this is a debate that's going to happen across the media landscape for someone like me I'm actually not concerned I do believe that just like using an iPhone or a transcription tool or other pieces of technology in my job I'll be using AI to do my work better if the AI can replace my work then I don't think I'm doing a good job I think a sense talking to these Founders these investors is that uh a lot of the coolest applications that are going to come out of this you know AI wave haven't even been invented yet maybe haven't even been imagined yet that said it seems like for the most part starting out where this AI is going to be applied is in some of the more boring places some of the more busy workplaces how do we integrate this AI into our basic business workflow so I think you're starting to see kind of consumer behaviors change students for example are already kind of using chat GPT to generate essays for them some artists are using models like stable diffusion Journey or opening eyes doi to help them create works of art I think because machine learning is such a different Paradigm as uh typical software there's going to be like a flock like a wave of AI ml native startups that are going to do things build products 100 times better than the incumbents who have not been able to build machine learning the the same way so this is is very exciting because I think we really have the opportunity to change the Paradigm completely uh and make a merge of the whole group of newcomers uh and and new companies that are going to be able to do things differently what we can do is you can use sort of new forms of democratic processes and this is what what I've been calling sort of platform democracy or AI democracy to ask a sort of representative selection of the global population like how should this technology be used how should it be deployed it sounds crazy to to say this but there already are pilots of of this sort of global process and the reason why you need it to be Global is because this technology affects everyone it creates legitimacy it makes it really really hard for companies to then be like oh we're democratizing this technology when really what they mean is we're giving everyone the ability to just like mess with anything everything that isn't what a democratic process that isn't what considered deliberation would have led to if you had the people who are being impacted by that technology in the room we need our AI systems to not just be optimizing for engagement as we've seen with things like Facebook and Tik Tok and YouTube but for the sort of the human values that actually support society and support democracy and and a big part of that is sort of not optimizing for division which is what comes naturally out of those algorithms in many cases and so a lot of my work recently has been around how can we instead optimize for bridging divides making conflict productive as opposed to destructive so that I think that is absolute core to BAC in from the beginning because we've seen what happens to society when systems that billions of people are using every day are really optimizing for a division and it isn't pretty in my opinion Ai and machine learning is becoming the new paradigm to build all technology in my opinion Ai and machine learning is becoming the new paradigm to build all technology if you think about the the psychology of a person who decides to be a truck driver there's something about the the freedom of driving a truck around the country right so that person is already wired to be kind of like an entrepreneur some some who loves and and craves this Freedom Cloud trucks which is based in San Francisco helps truckers especially smaller owner operators to manage their operations before a cloud truck started a truck driver would go on something called a Load Board they would find a job that they want to take and then they would call a broker manually right to actually call this broker and negotiate with this broker to figure out uh what the right price is that that they should book this load for uh and you you can imagine that in this negotiation the driver is at a disadvantage they're on the road they are uh not in front of a computer so they don't really have the data to know what's going on in the market in real time with Cloud trucks not only are they searching multiple sources at once so you don't need to go you know search by search by search and these different platforms you have one platform where you're doing this search but we also tell you hey in this current time here's what we we believe is a fair market price for this load so you're negotiating with [Music] confidence we started Cloud TRS in 2019 um prior to Cloud trucks I had worked with toena at Scotty and um that was my first exposure to the trucking industry and learning some of these problems that truck drivers face and uh we had spoken with local carriers and learned some of the pain points that uh they face and to us we knew that there were these were really tangible problems that we could use technology to solve so one piece of it is the search side of it making sure that uh all of this is uh integrated and aggregated uh and another piece of it is something we call the schedule Optimizer where we're recommending these jobs that they should take to maximize their revenue we do similar things as well with other parts of the problem so with cash flow for example we've built something called a CT cash where we're able to pay these drivers instantly after they complete a job uh as opposed to having them wait for 30 days or 45 days to get paid and recently we launched a C Credit where we're actually providing a credit card uh to the truck drivers that work with us as well TOA grew up in Nigeria where his parents had a soap Factory after he moved to the US he worked at Zenit an open door then he found it self-driving car startup Scotty labs in 2019 he sold Scotty to Door Dash I come from a family in Nigeria that's entrepreneurial and uh my my parents own a manufacturing business back there and I worked there for a year actually before I moved out to the the states for college uh 15 years ago or so I've always been interested and attracted to very traditional Industries and Manufacturing and trucking are very closely tied uh but before I started Cloud trucks I started a company called Scotty Labs where we were building autonomous driving technology for the trucking industry so I was spending a lot of time talking to truck drivers understanding their pain points and over over the time running that company I ran it for about 3 years uh before it was acquired I came to learned that a lot of truck drivers wanted to be entrepreneurs I think what we learned is that um a lot of a lot of uh truck drivers the company drivers want to be owner operators because they want to determine where they get to go when they get to go there when they're on the road when they're at home with their families right and a lot of the entrepreneurs just need more help to be able to manage their business more profitably so the the impact that we're seeing is if if if we do our jobs right and we continue to build out the very best software to make it very easy to operate a trucking business the uh owner operators that exist today who are primarily the people that we work with will be more and more successful we have bi products that allow drivers to really have uh Data Insights on how their their business is performing to get a picture of what's going well how can they improve and uh how are they tracking against their financial goals uh and then along with this we have our schedule Optimizer which just makes it easy uh which makes it easy for drivers to plan out Revenue maximizing schedules over periods of time so instead of searching for uh independent jobs or searching uh day in day out they can put in their preferences and we will generate a revenue maximizing schedule for them with 142 million in Venture funding Cloud trucks hopes to tap into the nation's network of 3.4 million truck drivers there are large Trucking communities on Facebook there are large large Trucking communities in every single state that you go to and just going out and talking to people and really hearing from them it's pretty obvious that they want to be uh entrepreneurs because they want to ear their time right they want to determine when they're going cross country and when they're spending time at home I'm not saying that every single truck driver wants to be an entrepreneur but certainly it's something that's um that's a key part of of the trucking industry so we're we're constantly listening to feedback to really understand the pain points our drivers are facing and this is feedback across multiple channels so our social media channels as well as um feedback we hear from a conversation with our sales team um and feedback they submit directly from the app and uh for example um a recent piece of feedback that was acted on was actually drivers preferred to submit preferences in terms of regions as opposed to having to like specifically submit spe specific like states or cities and that was like what we had thought of as an engineering team um and so um we kind of quickly acted on this feedback and built uh kind of region based search and region based preferences and were're able to kind of ship this and so this is this really uh embodies a spirit of customer feedback of customer focus and continuing continuing to iterate and build uh towards solving the problems our drivers are facing fintech startups are really exciting because they're innovating in the finance space which is typically a little bit slower moving so they're bringing things like new features like early wage access that plus like an easier user experience was just really exciting for people so what caused fintech to get so much attention and excitement initially is there's a lot of potential you know when you think about meeting customers where they are delivering banking services more cheaply and efficiently there's really a lot of opportunities to to give better services to people and for much cheaper and so that combined with covid a surge and online transactions people not wanting to go to a bank in person uh really created a lot of Tailwinds behind fintech and and a ton of interest in in investing there are a bunch of companies getting attention during the past few years stripe is a is a big one they're a payments giant who makes who make payments a lot easier and they um were valued at 95 billion in 2021 chime is a digital bank that was valued at $25 billion byy now pay later was a really big category so um companies like airm and Clara got a ton of attention really high valuations during Co especially there was a view that this was going to change banking completely and they spent a ton of money on marketing to bring in a lot of users but the valuations that they were getting end up not being justifiable when you look at the revenue they're bringing in and so real Innovation here really valuable service but the business models haven't been as productive and bringing in enough Revenue to support the valuations that they really received so jefff and I started out with a really long list that we pulled from CBN sites and pitchbook of companies that hadn't raised in a long time I think our bench mark was about 18 months and then as we were researching those companies we kind of learned about a lot of other ones through interviews with experts and analysts and speaking with people at the companies a really common theme we saw among the companies was that they raised money and then they expanded really quickly so they hired a lot of people they opened new offices and then as kind of macro conditions changed they weren't able to upkeep that burn rate and so they had to let people go they had to close down offices or products Neo banks are digital first banks that don't have any branch locations uh they deliver all their services through online channels apps websites and they're new you know um Neo banks are essentially in the UK and and in Europe they call them Challenger Banks but they're newer Banks who are trying to disrupt this traditional brick-and mortar Bank model now for digital Banks one of the challenges is the business model they don't have banking Charters which is what allows you to lend to companies and to do it very profitably historically lending has been really banking's best business model it's how they make the most money and if you don't have a banking Charter it makes it a lot harder to do it profitably another big issue is Banks actually serve customers fairly well when you especially when you think about more affluent customers and especially in the US and people don't have a ton of complaints we more affluent and use traditional Banks and so where Neo Banks really thrived was middle and lower income customers and they did a great job of of and have done a great job of serving serving these customers well lower fees easier access to Services the challenge is with lower and medical income customers they don't have as much money they don't you can't make as much money off of them unfortunately and so it becomes harder for these Neo Banks to actually make a lot of money off them they're harder to lend to varro is one of the companies that stands out for having Financial issues right now they had an interesting model where they went out and spent a hundred million dollars on a bank Charter and it took them years the challenge they're having is they haven't been able to attract enough deposits to really lend profitably and so you know they have a base of 5 million customers 5 million accounts that they've reported only $275 million in deposits so only $52 per account and so it's really hard for them to make money on lending I think Venture Capital people are still very excited about fintech but it's more just about seeing what the public public markets do and kind of where that bottom is before they start putting more money in the industry is going to be fine basically what happened here is kind of classic Tech bubble just like we saw in the com bubble the boom and bust what happened was you had a lot of innovation long-term opportunities that people were pursuing and then a lot of investment flooded in and too many investors were bidding on the same companies at the same time and so companies that didn't had Half Baked business models got funded pretty easily and there was too much money chasing too few really good companies and so what you had was just a big bubble and now what's happening essentially is kind of the aftermath and the downside of the bubble where you have a lot of companies that need to do layoffs a lot of companies that need to really lower their cost so they can get closer to profitability and what we will see is you know a number of companies as we talked about in our article shutting down a number of companies um getting Acquired and but the industry will be fine and the and the strongest companies will ride this out and and they'll some of them maybe even able to gain market share during this tough kind of bare market for fintech pickup trucks are the biggest product segment in the United States by far Ford's FS Series has been the top selling vehicle line forever it was again last year Americans love of pickup trucks and so this is one segment that Tesla does not play in and uh Elon Musk has been promising Tesla would come into the pickup segment for a very long time a few years ago the company unveiled the Cyber truck and the expectation is this is a a new type of pickup truck that'll address an enormous Market it's going to be different than any other kind of pickup we've seen before I would think that the the truck will be core to their business I mean if as we've seen with the domestic automakers it is their bread and butter and I think there could be significant profits for Tesla with a truck on the EV startup side rivan clearly is a competitor because they were out there first and they've got a pickup truck and an SUV and then Ford with the electric lightning and they've got a lot of production capacity that they're ramping up and they were out there first as a real Mass marketer and then of course you know GM will have both the Chevy Silverado and the GMC Sierra that will be competition as well Elon said the vehicle would be priced from about $40,000 I would say objectively that's a highly unlikely price point for this vehicle and in fact as it turns out over the long history of Tesla there actually is no Tesla product that's ever sold at the base price that Elon has promised so most people who are watching the space assume that cyber truck is going to kick off at a base sale price of around 70 to 80,000 again it's it's still sort of unclear what we do know is it's going to be heavy a few years ago Tesla Engineers were um communicating with California's Department of Motor Vehicles and they revealed that the likely weight of the vehicle at a minimum would be about 8,500 lbs and to put that in perspective that's a couple thousand pounds more than a a standard Ford F-150 cybertruck is likely to be an extremely um energy intense vehicle to produce and and and manufacture and that's for a number of reasons it's using this all sort of Steel and aluminum body so there's a lot of metal going into this vehicle the batteries themselves are are large and very resource intensive so lots of nickel lots of cobalt lots of lithium coming from all over the place if you look at estimates by uh something like argon National Laboratory which tries to calculate the carbon intensity of vehicles including how they're made every EV sort of starts overweight in terms of carbon emissions relative to say a gasoline car it takes more energy to build an EV because you have to gather all these materials and the manufacturing process is a little different another kind of mild concern or not maybe not so mild concern is automotive tires vehicle tires wear down over time and create dust there's a chemical treatment on tires that's designed to keep them from from wearing out so fast but it turns out that that particular chemical gets into waterways rivers and the Sea and is very toxic for certain types of salmon and maybe some other fish heavier vehicles produce more of this dust so there is an argument that if you're putting an 8,500 lb uh electric truck on the vehicle that actually is going to be producing more of this tire dust pollution than say a conventional gasoline or diesel pickup truck which may not be as heavy analysts investors as well as customers have been eagerly awaiting the release of the cyber truck production of which has been delayed on a number of occasions to date I think at this point analysts are expecting that the Cyber truck will be released at some point in the first half of 2024 and they see that as part of what will need to happen for musk to achieve his very ambitious growth targets which you know some view as probably unachievable but you know certainly uh important to making some Headway towards those so I think you know further delays or you know hiccups as it relates to that release probably you know wouldn't be good for the stock there are a couple ways to look at it there may be a group of buyers that never would have considered a pickup truck but because it's an EV because it's a Tesla or a new one of the new eved startups they will consider it I think the other big question is will the core um truck buyers that have you know driven F-150s and Silverado forever will they uh ship to EVS I'm less certain about that and then of course that that leads to the question of what are the volumes going to be and that's really hard to know because we don't know exactly who will be the buyers and and how many of them there will be it's been a bumpy ride for Tesla stock for sure to say the least over the last year or so you know dating back to Mid April of last year when Elon first announced his Twitter acquisition through the end of the year the stock crashed by nearly 70% um before rebounding recently the distraction of the Twitter acquisition to Elon and all the stock that he had to sell to finance it played a big role in a significant decline in Tesla's stock you know most of elon's net worth is derived from his shares of Tesla and his options to buy shares in Tesla largely by driven by the Twitter acquisition the decline in uh Tesla stock over the last year or so has taken Elon who a year ago was the richest person in the world by nearly $50 billion seen him replaced by Bernard Arno of lvmh as the world's richest person the company when it introduced itself to the world in 2006 set this really aggressive agenda that we're going to change Transportation with sustainable Vehicles powered primarily by solar power so they really wanted to be associated with clean energy clean transportation from the very beginning but he also said something important which was the first vehicle was going to be an expensive one the Roadster but each subsequent vehicle would cost less and less and less um as the company scaled up and got better at making EVS well we're pretty deep into things now it's about 17 years in fact since uh the first roadsters were built those cost about $100,000 the average Tesla today retails for about $65,000 I would argue that objectively the way Tesla products are now positioned it's harder and harder to make the argument that this is purely uh an environmentally oriented purchase from the very beginning the company knew what it had to do to get people to buy these things to take EV seriously they had to be nice to look at and fun to drive and they had to have features that were as good as or Superior to those in a gasoline engine car and they did a terrific job with that what they didn't do was then keep working to make them more affordable and and actually more environmentally friendly for more people why this business why did you want to get into nuclear five years ago I set out to solve a problem carbon had been increasing access to clean energy is becoming difficult across parts of the world and now we even see the problems with energy security as well and so I founded the energy Impact Center first just a research institute to take a first principles look at our climate and energy problems across the globe our investigation our interviewing subject matter experts across the country across Academia across industry across policy makers led us to understanding that nuclear was the solution and it had just become stagnant for unobvious reasons and so we set out for even more research and more interviews and more investigation to figure out why that was [Music] I'm here today with Brett coulas the founder and CEO of last energy and we are here in um what's called a a mechanical prototype of your first small nuclear reactor this is very exciting um this building is what's the size of the building that we're in now it's a cube that's 30 ft by 30 ft by 30 ft okay and within this cube is housed uh last Energy's new nuclear reactor so uh this is kind of amazing but we've reached the point in the world where we're really starting to think about the future of new nuclear advanced to reactors and so um last energy is working to commercialize this this future but you're doing it in a very different way so what I'd like to get into is is the story of last energy and what you're doing that's so different from some of the other companies like you know GE Hitachi and and Toshiba and Westinghouse that are trying to build enormous new power plants tell me what you're working on so we've taken is the standard pressurized water reactor technology it's the Workhorse of the industry 300 power plants around the world 10% of humankind's electricity is produced from this power source and we have productized it miniaturized it and modularized it in order to make it a manufacturable product in order to bring the cost down and increase the scalability of nuclear energy production across the world okay so um in recent months we've seen some big breakthroughs um announced in in Fusion technology so nuclear Fusion had had a big day um in in late 2022 um this was new fangled new stuff that no one had ever accomplished before tell me what's new about your Technique yeah we're Innovative in the way that we are not actually introducing any new physics any new chemistry any new Material Science it's a very different approach towards energy Technology Innovation we spent years trying to study what makes new Energy Systems Works what makes new technology work and what we found over and over again is if you change too many variables all at the same time back to that physics or the chemistry or Material Science if you deviate from The Standard supply chain you find yourself in a position where every component is 10 times as expensive and you don't actually make any Headway on cost reduction our Core Design principle is use standardized equipment off the shelf one might say in order to benefit from the experience of so many other Industries before us so all of the skill set is already here these these guys are accustomed to building huge equipment for the oil and gas industry and yeah that that fits your your needs perfectly exactly so we don't even have to invest in our own facilities to get started we don't have that huge upfront Capital cost rather we get to benefit from already existing facilities and use a contract manufacturing process in order to get off the ground years ahead of schedule the kind of vessels that they're manufacturing here these are very common for the oil and gas industry um how is it that you can use the same types of equipment for uh for nuclear yeah one of the benefits that we uh brought about in designing our system initially was to base everything off of the existing oil and gas supply chain so the oil and gas industry is already used to dealing with high pressure systems high flow rates of water pressure vessels play IND pip you name it and so by utilizing not only existing supply chain but also their existing facilities in the labor force and the expertus were able to hit the ground running without having to reiz the wheels Fusion even if they've made breakthroughs it could take another 10 or 20 years to test out all the new parts and get to the point where it's economically viable right your plan was to not have anything new to to use the oldest possible technology that's been been proven and so you're I mean why why should people care about last energy because you're what you're putting it together in in some new way it's a Technology Innovation from a systems integration perspective we productized nuclear the challenge with new physics Innovations it's not just the 10 years to get past the physics part and then another 10 years to get past the engineering part the problem is if your materials if your supply chain deviate from what's common and scaled across many other Industries you might never be economic okay so so um have you sold any of these yet so we've probably had more Commercial Success than every other new nuclear startup combined just this last year really we've uh ended up signing contracts throughout Eastern Europe in Poland Romania and now also in the UK at some of our early Target markets we have over two dozen projects under Development Across era and you've accomplished this just as as a startup I mean I was led to believe that that nuclear new nuclear was going to be still years and years away and that you would need only the the biggest companies would be able to make it happen if you're trying to do too much if you're trying to reinvent components or technology almost all of the nuclear startups start off with a perspective that there's something wrong with the reactor okay well that takes thousands of people to solve the reactor problem but if you just use the existing reactor technology like you can see behind me here then with just a 40 person company you can make this type of commercial Headway my understanding is that you know you don't have a PhD in nuclear science or anything um you're you're an entrepreneur your previous company involved um using drones to study rooftops for insurance companies how in the world did you go from that to to this yeah so I have a educational background in mechanical engineering and then entrepreneurial experience in a hard tech company in Frontier Tech and building drone technology uh but after selling that company in 2017 and wanting to focus on global scale challenges such as energy and climate I took my time studying the industry Met meeting with hundreds of experts first in climate and then when realizing that nuclear was just totally misunderstood totally underleveraged ended up taking thousands more subject matter expert interviews just in the nuclear sector and so the right problem was shrinking the enormous nuclear power plants that we have around the world into a more manageable size that was our solution the problem that we discovered was construction complexity okay so just the time it takes the interest acrude on your financing charges over that construction period this ended up we realized historically leading to most of the cost of nuclear energy and so that became the problem to solve constructibility not reactor physics okay problems have led people to think that nuclear is just not going to be affordable what you found is that it can be very affordable if you shrink it all and and use use only these off the-shelf Parts go small go repeatable and then build your way up to scale economies of many instead of the economies of size that's our approach I think people's perception of nuclear has definitely changed dramatically over the last few years really understanding as we start to scale up these renewable systems some of their shortcomings the land consumption material consumption they themselves have a carbon Footprints and then when you layer all the environmental benefits of nuclear on top of the energy sec Security benefits that we're seeing ever more present throughout Europe in today's day and age nuclear is becoming the obvious choice and I think both people and governments are coming around I mean we know they are because they came to us looking for solutions they came to you in particular these Eastern European countries in part because after Russia's invasion of Ukraine and the shut off of of gas to to Europe they realize we need other Solutions we can't just dig more coal to make ends meet always knew that there was an energy security threat and we've been talking to many of these Eastern European countries Romania and Poland for many years it was just with the war it became real to everybody how serious a concern energy security was so they were able to put their political support behind the projects that they always wanted to anyway because energy security became a threat to the public that the public was aware of as well and so yes within a month of the war breaking out in Ukraine we got a call from the prime minister of Romania himself came out and he cleared room for two of our projects at the mioveni research reactor site now when we look at some of the biggest obstacles to nuclear we've got what regulatory issues financing issues um how are you going to pay for things what's this going to cost anyway yeah so each one of these units costs us under $100 million to build and it produces es billions of dollars worth of electricity over its lifetime the way that we have architected our business model is using what's common in the Renewables industry known as a power purchase agreement so what we do is we get our customer usually a factory of some sort whether it be aluminum or glass or cement we get them to sign us up as their utility they write us a contract saying here's the price of power over this period of time we then take that contract to the financial markets to private equity infr structure funds they fund the capex of the facility and then we both benefit from the electricity sales and the profits of it over time you said that that's the way that that renewable um energy has has grown um indeed a a factory is not going to own its own solar panels or wind turbines right they they contract through that long-term power purchase agreement how many years are we talking 20 years 30 years the contracts that we have in Poland right now are for 24e period period so this this is the mockup of course but the plant would be operating for 24 years is that the average lifespan the plant's lifetime is 42 years however uh with these power purchase agreements it's much more common for them to be five 10 or 20 year power purchase agreements it sounds to me like that would incentivize you in a different way than utility companies perhaps because you know if I'm if I'm a big utility company building a nuclear power plant I know that if I have cost overruns I can just charge my rate payers that money um I don't have to eat it myself but if you're going to continue to own the plant I mean that must incentivize you to really keep the costs contained us having ownership from concept through operation through decommissioning is a perfect alignment of incentives it means that from the design itself we're designing for affordable electricity we're designing with decommissioning in mind we're designing the throughout the entire plant's we've designed the system from the gecko to consider the entire plant's lifetime at the end of the lifetime of this plant you're going to have a lot of uh nuclear waste I imagine that that's that's a big concern of of a lot of people they're still skeptical skeptical about the safety of of nuclear um how do you deal with that issue most of the safety concerns are perception based rather than resulting from the physical phenomenon of the plant yes it's Radioactive but it's not that radioactive after you shut it down the heat dissipates very quickly the radioactivity also that's the magic of radioactivity it magically disappears all on its own and So within just uh a few months iodine 131 which is the rad nuclei that has a hazard human health all gone okay so all of a sudden you've eliminated the health hazard within just a few months of waiting within 10 years most of the heat is gone and so we've designed our system this exact same modular frame with decommissioning in mind to be able to take it apart just as easily as you put it together and bring it to whatever waste storage facility or recycling center you want to bring it to we've designed our reactor vessel itself to be like a battery cartridge and we've designed the facility this nuclear island with extra battery slots so every six years we come in with a new battery cartridge a fully fueled reactor vessel drop it in a place plug it in and run it for another six years we do that same thing seven times start at the lifetime in the facility and then we let it cool down and then the whole facility can be packaged up so you don't have to remove the the spent fuel rods they just stay they stay here the whole time that is one of the key differences in the operational Paradigm between us and the standard technology with the standard pwr technology you open up the reactor vessel you Shuffle the fuel you add new fuel for us we don't we simply drop in a new battery cartridge fully fueled what would be the biggest obstacles that you still have to over overcome in order to get the first one of these operating yeah so we've checked off most of the boxes from everything from government approval to technology development manufacturability is what we're testing right here but there are still steps along the way this mechanical prototype will advance we're going to test out the disassembly next the transportability and continue to make these design enhancements all serving our greater mission of scalable easy to construct reducing complexity to deliver the most affordable clean power that you could imagine okay so each one of these units will will produce how much electricity 20 megawatt it's about the size of a data center or a Pulp and Paper Factory or an automotive manufactur but but a big old old school nuclear those are how many megawatts a thousand G yeah thousand megawatts so about the size of a million person City whereas our ours would serve a town about the size of 20,000 people but if I want more of them I can build you can build them in in parallel and that's the other change in the operational Paradigm another area that we're Innovative is borrowing lessons learned from other Industries when you build a solar farm you don't build one giant solar panel you build the same solar panel over and over again you stack them next to each other the exact same with our micronuclear facilities if you need 200 megaw we're going to install 10 identical 20 megawatt units right next to each other so like you were saying it's it's counterintuitive you might give up a little bit of efficiency because because your units are smaller but you're making that up in the ease of manufacturing and and and installation exactly since there's nothing really new here what's your what's last Energy's intellectual property well there's still quite a bit of technical complexity um the systems integration the modularization the manufacturability these are all incredible technical challenges to overcome but the rule that we s for ourselves is no component level innovation no new physics no new chemistry no new material science that those are the sexy and the fun problems that people gravitate towards instead we chose the still technical problems but the boring ones okay so you're intellectual property isn't how to put it all together and and transport it to the other side of the world and how much electricity we get from nuclear my understanding is there's something like 300 or 400 nuclear power plants around the world world and they put out roughly 400 or 500 gaw of power does that sound right this is what is just so incredible about nuclear technology it's that for so little input you get so much out of it okay and so those 400 400 buildings around the world provide 10% of world electricity 4% of all of our energy consumption as a global civilization that's incredible from 400 buildings the fact is that any any society that has experienced a rapid decarbonization whether you look at France or Sweden or South Korea or Ontario they anyone that's done a total decarbonization of their energy infrastructure in under a decade's time it's always been nuclear they still rely on coal especially in Poland and Romania they're I think they get the majority of their electricity from from coal still so your initial customer base are people companies that no longer want to rely on on dirty Coal Power our the factories that we serve in Poland specifically have two problems the first is that yes their energy that they get is very expensive and very dirty and the other is actually capacity because it's not so easy to just string up new transmission lines and so they want to grow their economy they want to grow their industry and they literally cannot get enough power to the factory so what do we do we ship over a bunch of shipping container size modules modes put it right next to the factory and we become their utility nuclear has yet again another very unique advantage and it's called distributed Basel load the fact that you can perfectly match your power supply with your power demand both in location and in time if a city needs 400 megaw of power they can buy 20 of our 20 megawatt units and collocate that with the city so you don't even need transmission cabling at all if they grow in terms of size they can just add on another unit so it's always perfectly matched and and you don't you don't think those the citizens of that town should worry about having all those reactors right in the fields right next door I think part of the reason that some communities have grown skeptical or scared of nuclear is actually lack of exposure to it and so by building these beautiful buildings and setting them up outside of town and inviting the community to come visit it we're going to be changing the perception of nuclear as well I hope that's I hope that's true once you've built a dozen of these in Eastern Europe do you think the NRC might just want to you know rubber stamp it and say you know this is good for the us too I think after we've built a few of these in Eastern Europe we're going to and Western Europe as well okay we're going to see interest from around the entire world and it's going to be a race to see who can get their hands on as many of these as soon as possible that'll be a good problem for you to have okay how many of these do you think you could build over the next decade our goal is to completely decarbonize Earth's energy production period we want to make energy abundant and affordable because of the effects that it has for every other industry I mean if you think of data centers or if you think of material production if you think of all of the modern wonders of Life they all have energy as a root input to them and so by us making energy cheaper we're going to help fulfill the visions of every other industry as well there's certainly some institutional inertia that has slowed down from a bureaucratic perspective the development of new nuclear installations in this country it applies less to us because we're focused on Europe and in Europe we've had a lot of success working with the NRC equivalent Regulators so the onr out in the UK chenon in Romania and the paa in Poland have been great Partners in helping us regulate and Implement our nuclear technology abroad when you're talking tens of thousands of reactors that that seems like an awful lot of material a lot of uranium and everything else um is that going to be a limiting factor at all one of the Beauties about a system is simple as ours us not moving towards these radical new physics innovations that require new materials is that our plant is essentially steel copper water and uranium okay all of some of the most abundant and available materials especially in terms of the power production that they end up creating there's more than enough from a material perspective for us to not only satisfy Global energy demand but for us to 10x it for wind turbines and and solar panels they need a lot of exotic materials rare earth metals and stuff like that um you don't need any of those there is a challenge in these systems that require you know big magnets with some of these um more exotic materials but they also require steel and cement and other things too that are material concerns the key is with nuclear you get so much more for so much less input okay and so for us to produce that exact same megawatt hour of energy as a renewable system we'd be using between 100 and a thousand times less material input for the same amount of electricity for the same amount of electricity prod you're looking at a facility right now that can supply energy for 20,000 homes if you were to think of the all the solar panels you'd need you'd have a great visual representation of just how much more material and land Renewables require you have some competitors out there um other companies have spent hundreds of millions of dollars and many more years uh to try to get through the regulatory process and they they don't really seem to be any further along than you this guy who only got into the field four or five years ago um what are what are they missing what do you attribute your success to so far I mean for sure you haven't built this yet but you've made some great progress one of our core thesis is to always make sure that you're solving the right problem not the fun one and so we went around and we interviewed both people from industry government scientists and former startups in the nuclear in the nuclear sector itself and one thing that we realized was everyone was just so focused on redesigning the reactor and come on it's fun especially if you're a nuclear physicist that's what you're trained to do redesign the reactor what do you mean like new kinds of fuel or new configurations new fuel Fusion everyone loves that so fundamentally new physics as well Forbes of course we cover the world of billionaires when it comes to Fusion I'm amazed at how many billionaires want to have a piece of one Fusion development or another it's like it's their pet rock right now um do you have any billionaire backers yet um I don't know if I should be speaking to the uh personal finances of our backers but we've got an amazing cohort of investors and board members all of our investors were former entrepreneurs and operators themselves and yes they've done extremely well over the years so what's 2023 going to hold for last energy what are your Milestones to reach this year Well 2022 was incredible you know between getting head of state endorsements and selling dozens of units abroad it was just like a whirlwind year so now it's time to get the brass tax ramp up our manufacturing capabilities and start actually serving these Energy Systems and your manufacturing is going to initially be done where right here in Texas right here in Texas thanks a lot for being with us today yeah thank you so much bolt is a retailing company just like uber you can book a taxi through them now you can also rent electric scooter or have your groceries or your takeout order delivered you can even book a rental car through them and bolt is mainly competing with Uber in Africa and in Europe there are a couple things that stood out to me about bolt and Marcus villig when I started reporting on this story Marcus was unusually Young when he started this company he was only 19 years old so what I saw in Marcus villig and bolt was something of David and GL story you have a much smaller startup and a young founder going head-to-head against a much larger a much better resourced American rival in the form of uber Uber also play very very tough we're seeing Marcus and bold at times winning despite the odds being stacked against them starting any business is hard but it's especially hard if uh you're starting as a 19-year-old kid in a small country like Estonia uh with very limited experience and funding so the first months were brutal I was coding the app myself uh during the summer I was going on the streets of talin signing up taxi drivers one by one 90% of them immediately said get out of my car uh you're just a young kid what are you going to offer me it makes no sense uh so it was very very tough and it was just persistence and very hard work that got us to where we are today so B has grown very quickly in recent years and to dat is raised $1.8 billion for venture capitalist at his last rounds last year that valued the company at $8.3 billion but when we look at corporate filings for 2021 we can see that they generated around $570 million in Revenue how does that compar to lft or Uber on a revenue basis that means that bolt is around five times smaller than LT were around 50 times smaller than Uber Marcus vill grew up in talin the capital of Estonia it's a small European country on the Baltic Sea in northeastern Europe he founded this business right out of high school so he had a few entrepreneurial Ventures beforehand he was web designing and he started a small sort of edtech app kind of quickly realized it' be very difficult to scale that and sort of started looking around for sort of new ideas New Opportunities and I think a big inspiration was Skype Skype was estonia's kind of pioneering unicorn startup that created a prese zoom online video and online call-in software that ended up being acquired by Microsoft several of his early investors came through Skype and his older brother martin who helped co-found the business had also worked at Skype as well Estonia actually has an interesting background where due to the Russian occupation for 50 years all entrepreneurship was outlawed so nobody could start the business and that that was the environment I was first growing up in but also of course as soon as the occupation ended and theonia again its independence everybody wanted to start something new so actually starting a company seemed like a very popular new trendy thing to do and what also happened was there was no other big companies to join because the economy was so new so it wasn't like you could go and join a large corporation what many young people exactly wanted to do was start their own business so it was actually a pretty natural environment for me to grow up wanting to be like that as well Marcus talked about having been in to see many of the kind of leading Venture capitalists across Europe and Beyond and was met with the same answer no thank you investors were intrigued by him and what he builds but when they were looking at the opportunity of this very young founder from this very small country to build a product that could compete with Uber which already raised over a billion dollars investors were not optimistic about his prospects as a result of that Marcus had to learn to do things his own way on a very small budget this meant that Marcus and bols had to find new ways to grow and had to find Smart solutions to do that and to beat Uber some of these examples would be looking at Africa where B was very quick to offer cash payments this meant that you could book a taxi through the bolt app and instead of making a payment via Apple pay or with a car you would hand your driver cash and the driver would settle up with bolt at the end of the day or at the end of the week this may sound like a small thing but around 25% of people in South Africa don't have access to a bank account or credit cards and that's even higher in other parts of Africa where B operates I'd say the hardest part of our journey so far were the first 5 years because we were barely able to raise any funding at all we managed raise about 1 million EUR and and we built a company uh into more than 10 countries with that limited amount of funding while our competitors were raising more money than any company in the history of technology so we were completely completely outspent by all these other players uh and the only way we could succeed was by being smarter so we were really focused on making sure that the team is very focused on frugality and we count really the impact of every Euro that we spend it's a common playbook for startups in Europe that as soon as you start to build some traction you should go to the US which is the largest possible Market however Marcus was relying on his own data there he started looking at the stats and saw that the greatest possible potential was actually in Africa specifically in South Africa rather than the US he also knew that he would face less competition there than he would do where he had to go head-to-head with Uber or lift in the US market you need to expand only to the cities where you can actually offer something better than the incumbents do uh otherwise you're just generating no value there uh so we realized very early on that Central and Eastern Europe was underserved uh other platforms didn't really understand the local customer as well as we did and that translated into many things for example local payment methods they didn't work with all the drivers in these markets they didn't necessarily focus on safety and some other aspects that were important here of the years of running bolt on a very tight budget Marcus was able in the pandemic to raise some really large sums of money for investors that supercharged the growth of bolts and helped it expand into new areas like scooters like food delivery like groceries and even offering rental cars that's been really expensive these scoters are a tough business though investors around the world have invested around5 billion into startups like bird but many of them still don't turn profit and aggressively burning money most companies can barely build one product that reaches millions of customers and even less companies are able to actually build multiple products that they work really well so we were always very conscious that we don't want to expand into products that are not centered around our core Mission but with electric scooters we realized very early on that there's many synergies that we can benefit from by having the leading ride Hing service in a city and by also having the leading scooter sharing service in a city because it's largely the same customers anyway so we don't need to spend nearly as much money on marketing to acquire those customers but we can take that money that other companies spend on on marketing and actually invest that into having a better product and cheaper prices Paul's Mission from day one has been that we want to build better cities and we believe the best way to do that is to replace private cars so it's it's never been that we only want to be a riling company I don't even have a driver's license so for me it was always how do we expand the the product set so we can truly replace the private car and the electric scoters were the next obvious place for us to expand into because most of the trips in cities are short and electric scarter is one of the best ways to replace those trips right handland is a tough business it's hard to make money here with very tight margins Bolton has got a lot bigger but the business also burnt through $600 million in 2021 and investors will be watching Marcus's and B numbers very closely but also Uber and lift which have still yet to turn our annual profit our mission is to make cities better by replacing private cars and we think that we're truly at just the very early stages of that we already have more than 100 million customers across Europe and Africa but when you look at the potential then we think there's more than a billion people that we can address over these two continents over the next 10 years to come on November 27th 2020 zapo founder Tony Shay died from injuries he sustained in a house fire at the age of 46 at the time David jeans and Angel Aang LED coverage for Forbes on the tech Moguls mysterious passing they uncovered a tragic story of a downward spiral fueled by drugs mental health issues and a never-ending search for happiness an exclusive exerpt of their new book Wonder Boy Tony sheay [Music] focuses on a very small window of Tony's life in 2020 when he was in Park City and this particular episode focused on the friends and people who surrounded himself with which included family members it included longtime friends and it also included people who had just entered his life and what we were trying to document in this particular chapter was how some of those people had entered business agreements with Tony at a time when he was spiraling with drug use essentially he had spent years living in downtown Vegas and when covid-19 hit he decided to move to Park City for various reasons we heard a lot of different stories about what he was trying to do in Park City he was trying to build World Peace he was trying to solve the covid-19 crisis but in many ways it seemed like him going to park city was just a way for him to run away from the efforts from friends and family to try to get him the help that he needed at that time in the moments Shay did spend with his family he left them struggling to connect with him during one moment with his mother Judy he said he would be open with her if she would act like his friend if she acted like a family member then he would hide information from her after Judy told him he needed to see a therapist he said he would but only if for every minute he was in therapy she would sit in an ice bath when she pressed the therapy Point once more mentioning his issues with attention Tony left the house in a rage he bought Mansions a ranch multiple houses and essentially told his friends that if you move to Park City I'll double your most recent W2 he started to send the word out far and wide come and join me here and the offer was too good to pass up and often the Mandate was just come here and create build do something that like gives you purpose and helps you find your meaning in life at first some people who were old friends of his may have arrived in the city just because they were curious and he was their friend and they were trying to see what it was all about once they got there some people turned around and walked away and left other people stayed and continued to draw salary from him and take money from him and into business deals with him often people Justified remaining in Park City by saying they were there to help their friend which some sometimes came into conflict with the payments they were receiving from him at the same time and at the end of the day it felt like money really muddied that situation I think that some of Tony's friends who chose to move to Park City did move because the offer was too great and you have to remember that this was during the first year of the pandemic and a lot of people didn't have 9 to5 office jobs they were nervous about job security and Tony Shay was a essentially offering them a Lifeline during a period of huge uncertainty so to have somebody like that offer to double your best W2 I can see a scenario where people would choose to drop everything and move to Park City because of that sheay had become focused on the study of biohacking to increase his personal output he became convinced that inhaling nitrous oxide was a way to heighten his blood oxygen levels and eliminate the need for sleep in between cigarettes sheay was inhaling from Whip It canisters like he was drinking water from a bottle by one estimate he was using more than 50 a day his spiral with nitrous oxide came at a time when people were finding new ways to spend his money and sheay seemed all too willing to spend himself broke thanks to a nonsensical incentive scheme he had devised called 10x so 10x actually started as a noble idea which was Park city was reeling from the covid-19 pandemic and it was an initiative that he and some of his friends tried to launch to help restaurants in Park City reopen and the idea was that he would run an open bartab on Main Street in Park City and then people in town could spend $10 buying like a band that would get you free food and drink at all these really nice restaurants in Park City and it went well for a very short period of time but the state of Utah quickly realized what Tony was doing and shut the program down because you can't legally just run an open bar Tap on an entire Street in Park City and so when that business plan fell apart 10x mored into something else that Tony started to implement with some of his friends and assistant and Associates it became an incentive scheme in which Tony would say if you spend you know $1,000 of my money you'll get 10% of it on top of that so if you were able to recruit someone and they get $100,000 salary then you would get $10,000 if you take your people out to a restaurant you spend $11,000 you'll get $100 back the nature of 10x program obviously uh stoked a lot of infighting amongst people who were carrying out Tony's business finances and carrying out Tony's wishes there was one contract in particular that Mimi fam who had been Tony's assistant and Confidant for over a decade minimum had fought over with Tony's Brother Andy Shay Tony had this idea to bring Paula Abdul who he knew from a friendship level to Park City and basically have her play shows for people to essentially encourage folks to come back to Park City during the pandemic and the size of the contract would have been 9 million and whoever buttoned up that contract would have gotten that 10% commission which meant that $900,000 was on the line in total through an LLC she controlled fam sent invoices for what amounted to more than $20 million in one case she quote managed a contractor who is being paid $833 33.33 a month for quote assistance and management of various projects earning her $833 3 every time he was paid as time went on it became very clear who was profiting from it and who was sort of taking advantage of him and also who was trying to help and as we saw his brother Andy arrived in Park City and Andy initially would tell a lot of friends that he was there to keep an eye on his brother and also you know he figured that he wanted some Financial due diligence being done and that meant that he brought in an old friend of the Shays whose name was Tony Lee and he was a renowned financial advisor and when Tony Lee came in he started looking at the books and realized pretty quickly that there was a lot of nonsensical transaction occurring despite Andy setting up like a safety net and trying to do right by him Andy did end up taking a $1 million salary from his brother he also ended up spending and trying to spend more of his money and setting aside millions and millions of dollars which was disrupted by other people who were living with Tony at the time unfortunately the people that I remember the most in reporting the story out are folks who spoke spoke to me anonymously and I'm so grateful to them for trusting me with their story and trusting that I will never break that trust but in terms of the people who spoke to me on the record I think one person that really jumps out at me is a woman named Michelle detillo she was a woman who met Tony years and years before and actually dated him and ended up working with him and working for him and she just had a really unique perspective of Tony and she understood Tony in a way that most people didn't Michelle was present for a lot of the events that happened in 2020 and there was one anecdote that she shared where she and Tony were having a conversation on the front steps of one of the properties in Park City and Tony Shay basically told Michelle I'm thinking about stepping down as CEO of whether he was getting pressure from zapo Executives or if he just didn't want to do the job anymore and she told me how she looked at him in the eyes and saw how thin he was and saw how gaunt he was and just how tired he looked how tired what if her longest friends looked she said to him at that moment you've done so much for other people you just need to take care of yourself now he always felt from a very young age that he never quite fit in whether was racially socially economically you know he was a genius level intellect and he was always trying to make sure that he wasn't seen as the genius he wanted to be seen as the the normal person and he was always just trying to strive for the normal person and who we all are Tony was somebody who was singularly obsessed with finding happiness for himself and in many ways for Tony that seemed to mean adding things to his life whether that meant building a community for his friends in the form of putting 350 million into revitalizing downtown project or building businesses it was always about adding something to his life what's so tragic about Tony's story is that if you ask his friends his colleagues his family they'll tell you that Tony was more than enough but he just didn't realize that if there was one takeaway that I would want readers to take from it is to just take stock of what you have and like understands that it's not about adding more to your life it's just realizing what is and being okay with [Music] it I think one thing about technology is that there's this idea that sort of cult culture is separate from technology and that people are separate from technology and that these things are on two sides of a line I think that's really not only incorrect but it's often damaging technology is to further Humanity full [Music] stop I started kind adventures in 2014 as a solo capitalist and one of the First Investments that I made from that was coinbase I had come from consumer software and the consumer internet and I learned a ton about how to build these much more heavyweight Industries like marketplaces and Logistics moving forward I started Angel Investing more and more I had not only invested in 30 or 40 startups by that time but I had also learned so much about how to help startups how to help Founders as another founder as a the fellow founder and I really enjoyed that zero to one stage that going from like one or two people and coming up with a concept that they were very excited about and then being able to help them not only as a angel investor with some Capital but also as someone who can empathize with their experience at this time period this is when there was sort of a shift in thinking about Founders and operators being investors might be a good and that seems sort of obvious today but back then it was unclear San Francisco and Silicon Valley and California this Progressive mentality that it it Harbors has been a great driver this is why people from around the world come here because they know that they're in a place that Embraces them we can't lose that in California and we certainly can't lose that in San Francisco our company's called Humane we are about 220 people now based in San Francisco and we've been building since 2019 on the belief that AI will be the base of the next generation of compute and we knew back then that we felt that there needed to be an entirely new device and an entirely new platform to allow for the mass consumer to really be able to experience it and become superpowered by AI I think the thing that really attracted us to Steve was his approach to building companies is similar to the way we build product we have a philosophy that really starts with what the experience of the product should actually be and we work our way back from that he gives very direct and open and honest feedback and guidance and advice and sometimes in the moment I I'll like walk away thinking I wonder why he's thinking that and then later realize that you know he he has the Long View he's thinking what does this mean for Humane 10 years out 20 years out it's hard for a lot of people to articulate what exactly they're looking for but it's up to Founders to build that it's just been a pleasure to back teams like that and we we want every investment to feel like they're not just following what the future may hold but actually helping create and shape what that future might look like a friend of mine had moved from Canada to San Francisco and his name was Garrett camp and he had an idea about a black car with a driver being able to pick you up based upon you requesting it on your phone and this app idea was a side project and he asked me one day to help him work on it and so I helped him start the company as an adviser so it was called Uber Cav in the very beginning those early days was so so important to later on how I sort of built a framework for myself on how startups can come from many different origin points I feel grateful to be have been a very small part of that journey in the beginning and to be able to stay close to the company but I'm mainly in awe of the startup journey and that it can result in a company like this it's still a pleasure to see the company grow as a global Service under the new management and I think Dar and and team here have uh done an amazing job of continuing the [Music] growth one of the things that I really loved about moving to San Francisco was the art the music the food culture all of that and it wasn't just for wealthy people it was for people entrepreneurs and creative folks that wanted to do something differently and wanted to be the best at what they were doing and so one of the things that I've tried to do is support the Arts here I think it's really important I've backed restaurants local Street artists music venues I think part of what we do in Venture is to pay it for to new Founders to help them build out their Vision I also think we should be doing that with our [Music] community Kusa is a place for to convene people we brought uh the CEO of Gucci and the caring group management team here to talk about web 3 technology and they loved it and that's a very San Francisco thing to take a craft take that attention to detail take inspiration from everyone else out there and and from their own lives wherever they came from so it just got into my head that hey we enjoy all these things they're entrepreneurs too we are investing in each other so that we can improve our community's life San Francisco is going through its problems as any big city is today but you know I think what the best thing that we have for each other is a smaller tight-knit Community we can invest in each other who they can [Music] thin one of my old startups a long time ago I used to go to this restaurant next door and people would frequently come by and tap me on the shoulder on their way out and say you know really love the food tonight thank you so much I was kind of confused and and the manager told me that hey the I think it's because the chef looks like you the chef to Cuisine the CDC and I laughed I said you got to introduce me to him his name is Brandon Jew he's born and raised in San Francisco Chinese American and you know an amazing fine dining chef but really wanted to break out on his own and start his own restaurant and at that time you know there was not much happening in Chinatown so he was really the first and he helped Revitalize it by creating Mr Jews which is both a restaurant a lounge a banquet hall for the community and a bakery shop and a cafe all in [Music] one where we are right now is the very first Blue Bottle Cafe it's really just a garage and a cart and it's it's the very first one I think it opened in 2004 and um I lived up the street it really like opened my eyes up to the idea of third wave coffee this new sort of more thoughtful in terms of where the beans were roasted and how the beans were roasted and where the the beans were sourced and and things of that nature so was able to invest early with them and that's been a great experience as an investment in not only you know what they provide to the city and our community it's somewhere that I can go to in Tokyo now in soou and London and New York and la and that's been an amazing journey to watch I ended up being able to help them enter and expand into Japan and Korea which was really exciting and fun my my family is originally from Korea with also some roots in Japan and so it was really fun to help them launch in Tokyo and soul and enjoy that I think it's putting putting our industry to task to say Don't just complain don't just give us your wish list but support creators entrepreneurs artists Builders real Builders like Atomic Builders right designers restaurants chefs be able to support them in the community that you choose to be [Music] in [Music] Steve does this for love in fact I bet Steve would would pay to do this that's how much he loves it and and when I say it I mean just working with Founders he loves rolling up his sleeves and getting into the getting into the muck and and really trying to help early teams figure stuff out and and so as a result his passion and his enthusiasm is pretty authentic and it's very organic and that really resonates with me because we can sustain ourselves through hard times when you're doing it for love and and then the second I guess is he's been doing this a long time and so he is I always refer to him as like a Marco Polo of startups he's tried every spice and so as a result he can bring some real wisdom to bear on behalf of startups across different areas of Technology every conversation that we have with Steve is always so inspired energized and always so helpful in these early days when we actually start to build a company when it was just a small crew even now he's been a big part of our series C as well he's just got such a really precise vision of how to execute alongside Founders it's there's there's really just no other way to describe it we're grateful to be involved when they're ultimately successful and we're also grateful to them if they're not successful and they have to shut their company down because we've also learned so much along the way we're just fired up to be able to have that relationship for the Long Haul from starting the company all the way to you know hopefully after IPO but even if not IPO if they're the company doesn't work out and they start a new company we want to again be their Ally and help them on that Journey so this is a lifelong commitment that we're making to our Founders it's a true partnership and this is really why you know it's we named the fund Kindred Ventures how do we understand the psychology of our Founders so that we're not sort of one siiz fits all in our approach how do we understand the type of product or technology they're working with how do we play the right role right and have that great investor and founder fit that we're looking for so these are the things that we can control these are the things that matter to us the rest is up to the [Music] founder [Music] vant is a company that basically automates other companies security and compliance processes so the security part is like making sure a company is managing and storing customer data in a way that's like [Music] safe so a lot of the software we use right has all this customer data knows so much about us and we sort of found that when you know that there's a data breach or there's a security hack right in that data is everywhere it has like real consequences for people I think about like Equifax or Target or these big breaches and so there's just so much scrutiny on whether companies are kind of doing the right thing and securing the customer data they have um and there right there's going to greatly a lot of scrutiny on that a notable thing about V's investment strategy was Christina the founder and CEO like worked in Venture as her first like institutional drop out of college basically and from that there are two I guess lessons that she likes to talk about one is that companies are the best at like raising money when they don't need it and the other is that it's like easy to confuse fundraising success with like company product success and I think she's been really conscious about trying like not to fall into those traps Christina actually waited until vant reached 10 million in annual recurring Revenue which is like the way V to measures Revenue because it's a subscription based company um to raise its first like big institutional funding round at series a um most companies usually tried to raise a series a when it's like 1 million at that metric so vanta waited until much later so that was in May of 2021 they raised 50 million in sua led by sequa and then a year later they announced the series B in June of 2022 it was an 110 million round led by Craft Ventures and that round valued the company at $1.6 billion so when vanta launched in 2018 uh we launched this category of automated compliance so helping companies get compliant and secure quickly um since then we've grown with our customers and now offer a broader trust management platform but still staying core to helping technology companies secure the customer data they have and then go demonstrate and prove that they're you know have reasonable security to their customers so they can go grow their business when I was a a product manager at Dropbox trying to take a new product to Market and we were really excited about giving the product to you know big companies Enterprise customers and and then you know the legal team kind of correctly told us we we couldn't do that we couldn't show that the product was Secure and compliant you know we thought we had reasonable practices but we couldn't demonstrate them in the way these Enterprises expected um and I didn't know anything about this space But as more and more I learned the process itself or the the goal made sense right it's like of course we should show we're trustworthy to Big customers um and do the right thing what that scrutiny ends up meaning is these companies have to one have reasonable practices and two then go through these pretty onerous processes to prove they have good security practices right and they're actually securing the data and historically that was like spreadsheets and manual Audits and like everything was one off um which both Took a ton of time and effort and also was like pretty inefficient because we're like talking about software and we're taking it into you know pieces of paper almost literally but companies would still go through it because it was so important to them to show that they were good stewards of customer data and their customers wanted that you know almost before they'd make the purchase right so it's like such an important thing to prove and felt you know kind of a like a large problem and an important one to solve because as someone who who build software um I actually do believe still believe in the transformative power of software but you know we can't do that if we don't trust [Music] it I think in the beginning you know because we created the category because we created the product we didn't have software competition uh we truly were the only thing and so the the trick and the the kind of sales or go to market processes was convincing someone they could rely on software for something they had a bunch of manual processes before as uh like kind of 2020 and 2021 went on and just more startups got funded there were more entrance into the space people copied what we did took it to Market and I think that just you know breeds some amount of resilience it it it deeply shows that in software you're sort of only as good as your your last release in a lot of ways and you may have created the category and brought this new product market and done this Innovation but if that happened 2 years ago right it's it's much more about well what's you know what are you doing this quarter next quarter how are you continuing to show that you're useful to customers and not sort of resting on The Laurels of a prior success I think waiting to waiting until we were 10 million in ARR to raise our series a instilled a lot of discipline in the company it forced us to think about are we doing the right thing do we have a good business not um does some VC think we have a good business right it's kind of made it more insol in a helpful way there I also think it forced some discipline around practices like we charge customers annually up front and these like cash flow things that actually helped us not need funding for longer um and in those ways it you know those sort of smaller decisions helped us build a stronger more resilient business um and I think finally the answer was like we didn't need the cash and again some of it was things like charging annually up front but um we you know we certainly had problems to solve but they weren't problems where it felt like it was you know more money would solve them it felt like more money actually might make it more complicated or raise the stakes or do other things and so you know why don't we solve those problems first and then when we get to the problems where it seems like money can solve them you know go go pursue investment two things came across really clearly when I was talking to Christina and like her former and current business partners and investors um one is that she's like super Scrappy and really prioritizes like product over ego like when I was asking her oh like what was Fanta the category Creator she was like visibly uncomfortable like I don't want to like claim credit for this kind of thing um and that's definitely something that carries into like how she runs a business the other thing is that she's like clearly someone who like will learn anything for the sake of learning it so prior to vanta I worked at an early stage investment firm VC firm in New York Union sare Ventures I think working at the early stage VC firm and interacting with like seed stage Founders I very much wanted to be one of them and start a company I didn't quite know in what yet I got into beanie babies when I was like in fourth grade cuz my my mom's family lived in Chicago and they found out about them a little earlier than everyone else and um collected Beanie Babies had still have hundreds of them in my mom's basement much to her Su grin and then um got to like buying and selling them on eBay like early eBay um and putting them together in different like groupings and trying to sell them that way and riding my bike to Kroger like local grocery store to get money orders cuz this was before there were many credit cards in the internet and I definitely didn't have a credit card at this stage um so would like go to Kroger and like slide quarters across the counter and get a money order basically to go pay for them I think one thing from when I was a kid to now is is kind of a a deep curiosity and I really do like to learn things for the sake of learning things sometimes to a fault um as a college student and meant I changed my major like 12 times I like couldn't really settle on something um so there there's definitely too much but I think in this role it's been really helpful because for the first couple years of of a quickly growing company you're sort of doing all of the different roles in a company until you can sort of do them well enough to convince someone who is much more experienc and much better than you to come in and do it better than than you were and going into each of the those new roles and being like well you know I don't I didn't know what customer success is but I'm going to go talk to the people and do the things and and learn about it um and figuring out how to have joy in that versus just feeling like it's another Hill decline um I think I think that Curiosity piece has been helpful so Imad mustak is the founder and CEO of the AI startup stability AI he launched the company back in 2019 and he went through a couple different business ideas for it none of them really ended up generating much revenue uh if any and eventually imod just kept going kept searching for a business that would work it was summer 2022 that stability really broke out had a its big sort of almost overnight viral moment and this came with the launch of the generative AI text to image generator called stable diffusion this is a model which allows you to type in a phrase anything from your imagination and can generate a almost instantly an AI generated image I interviewed him three times once in San Francisco last October when stability had its public launch party and then again in January in San Francisco and then in London I think I picked up pretty early on that uh he's a very charming and charismatic guy and he talks a uh very large game I think compared to most uh silon Valley Founders um he has high Ambitions and is very uh very open about sharing them um and I think that's really inspired a lot of people both investors and collaborators but also you know his own employees and just the general public that has gravitated towards AI so he's developed a bit of a cult following I think in a sense through that during the factchecking process uh we found that a lot of things that he said were just very difficult to fact check so I think this was kind of the uh the first maybe not red flag but yellow flag that set things off and made us start to have some skepticism and want to look further into the claims that he was making as we dug in further started talking to investors who had met with stability started talking to former employees uh we started to piece together more of the facts we started to gather some documents emad has at least since 2017 been claiming that uh he holds a master's degree from Oxford University in math and computer science he had this on his LinkedIn at the time that stot raised their $100 million last summer that LinkedIn has since been deleted but we found uh further traces of that dating back to you know his past companies going back to 2017 uh where he claimed this Oxford degree but in reality we contacted Oxford and Oxford told us that he does not hold a master's degree uh he only holds a bachelor's [Music] degree [Music] I think one of the big unlocks was we got a uh fundraising pitch deck from Summer 2022 that had a list of I think about like 50 employees on there um in one of the slides of the document and what I found was that there were many people that were listed on that slide that did not have stability on their LinkedIn did not have any like publicly searchable connection to stability but they were on this document and one of the people uh was this person named Eric halahan who went on the record uh and talked to us about his experiences at the company Eric had been an intern at the company he spoke through the chaos of the company a bit he had been slated to work 300 hours um with the company uh over last summer and ultimately 181 of the hours uh he sent an invoice to stability in August and 8 months later he had not heard back he had not been paid for [Music] it I contacted um stability collaborators that uh on stable diffusion their image generator and I ended up getting in touch with the professor at uh the German university called ludwood Maximillian University of Munich and turns out that this guy this professor had overseen the initial research to create the AI model that served as the basis for stable diffusion he had a lot of gripes about the way that stability had marketed itself and positioned itself as being uh they had said in public marketing materials the company behind stable diffusion as this professor uh told me you know stability would sometimes take an outsized amount of credit for you know being the company behind this work and then sometimes it was only after he had reached out to the company that the company dialed it back or you know gave the university some credit one thing that was really memorable to me that he had said during the call was that uh if you have a large enough press Department then you can Rebrand history in your interests and got the impression that uh that's exactly how he felt about what stability had done so we also got our hands on uh fundraising uh pitch decks so these are like PowerPoint presentations essentially that the company presents to investors that they hope to put money into the company it claimed that it had Partnerships with organizations including the United Nations the World Bank the World Health Organization they claimed a partnership with Amazon web services that in these slide decks they described as a quote unquote strategic partnership uh they claimed that Amazon had supplied a vast amount of AI chips at a 80% discount to the market value when I talked to Imad in January uh he told me that Amazon had cut stability a very attractive deal uh that he said came with quote unquote certain personal guarantees when I asked him for more information about about this I was sitting in the room with him as well as his wife Zara kesi who was the company's uh head of PR at the time she shot my question down and they just would not go further on that conversation point until we changed the topic we spoke to a vice president at Amazon who said stability is in fact like any other Amazon customer when it comes to uh cloud computing um and he shot down the notion that there was a strategic partnership it was unclear like what exactly the arrangement was and until we finally found a couple sources who were able to independently verify uh it turns out that stability actually was millions of dollars in debt to Amazon and that the Strategic partnership that Imad had claimed was not really a special deal for stability uh to investors he had said that stab had as much as a 80% discount on uh AI chips from Amazon through this partnership but after reaching out to stability for comment uh they told us that this 80% discount is actually a standard discount that Amazon offers to anybody who uh wants to be its customer with a story like this you always want to reach out to the company to give them a chance to respond to everything that you plan to say about them in the story so we reached out to them in early may they responded to a lot of our questions but pushed back on certain things but I think more unusually um a key element of our story is not just Imad the founder but that his wife Zara keshi who uh was the head of PR she also had claimed on business cards that she was the chief operating officer and we found that uh she was sitting on the company's board of directors after they uh obtained their $100 million of VC funding Imad took to Twitter and he also wrote a blog post addressing some of the claims that we had made in the story I think stability has had some kind of a skepticism from a certain portion of the AI Community I think even prior to us uh publishing the story some of the feedback we've gotten afterwards is just a um people being glad that this story is out there uh with concrete facts rather than you know being limited to hearsay and back Channel I think it really speaks to what's going on in AI right now because of how popular generative AI has been investors out here are just flocking to to uh fund companies uh at very lofty valuations throwing around tens of millions or hundreds of millions of dollars historically you know Silicon Valley investors have spent weeks if not months you know uh doing due diligence and researching a company and researching the founder and ensuring that there are no red flags and they're comfortable to invest I think the big question will be um with AI being as hypy as it is now um how mindful will investors be of Performing due diligence of taking a bit more time to check for potential red flags at a company um before going in on an [Music] [Music] investment as corporate s move more of their apps and data to the cloud amid an AI boom creating a market expected to reach $1 trillion the need to properly secure those assets is only becoming more important and challenging this is where Cloud security startup whiz comes in whiz connects to storage providers like Amazon web services and Microsoft Azure to scan everything a business is exposing to the outside world flagging and prioritizing security risks picture the doors and windows in an office hundreds of doors and thousands of windows are they all properly locked whiz's security graph would tell the company the four or five at highest risk say the windows facing a fire escape and give tips on how to fix the vulnerabilities one of our Forbes Cloud 100 list biggest movers this year soaring 67 spots to number 15 whiz is arguably Tech's highest flying unicorn at least the highest flying not directly in the AI model race it was the fastest software company ever to reach 100 million in annual recurring revenue and then doubled that in just 9 months and it reached a 10 billion valuation in just 3 years making its Founders new billionaires but critics say whiz runs a hyper aggressive strategy of raising and hiring big and spending even bigger with the sharp elow sales tactics to match that recalls the propagate Tech spending of a bubble that's long since burst so as it helped some of the world's big corporations like lvmh and Morgan Stanley catch this crazy Cloud wave all eyes are on Whiz and it's CEO of soft rport first tell me how long have you been working on Whiz where was it founded what's the origin story so actually we started March 2020 and if you remember March 2020 was like when covid hits like they basically when we understood that Co is like a true pandemic H it didn't feel like the right timing to start a startup not in security not at all H but probably that was the perfect timing for a cyber security company doing Cloud security and when someone who doesn't know anything about technology security is thinking about the different areas that could be under attack that that need security what kind of um information or work is going into the cloud that would need to be protected everything think about it think about organization almost everything new that they're doing they would build it already already in the in the cloud in the new technology stack even look at at AI like AI is definitely you know going to be revolutionary but it's also a cloud revolutionary in a way if you if you think about it and everything new is building there so definitely if you look at the cloud today it's it's probably 10% that's kind of what we're estimating is is is the penetration of the cloud but it's still like this is the most advanced and the new stuff that are going like all the applications everything that basically we're doing today has a cloud attachment in a way and so you split time between New York and Tel Aviv and that's that's kind of similar to the company has hubs in different places right I'm based in New York York but we have a large R&D Center in Tel Aviv that's where we started the company we have offices nowadays in also in Washington in Denver in Austin and we're growing we're trying to grow also outside of the US to to Ema and APAC yeah we're we're in one way we're still a toddler in a way and still growing okay and this is not your first startup could you tell me a little bit about what you did before and I believe it was with the the same crew of co-founders give or take uh as this one so we actually met in the 8200 unit the 00 unit is kind of the Israeli NSA so in Israel we have a mandatory service that's where we you know we're the probably one of the people that can say hey we didn't choose to work for cyber security cyber security chose us in a way so we draft we got drafted to to that and that's how we met and and since then we're working together so we've been together in at200 that's where we learned everything about cyber security after that we founded together adalum which was a player in the casby market which is more more of like Cloud application security it was a short run very fun one uh two and a half years got acquired by Microsoft came to Microsoft spent there five years more than expected in a way we we found out that Microsoft is a great place also for entrepreneurs like to to to study and to learn how to scale that's where we led the basically the cloud Security Group so everything that is cloud security for Microsoft ER we had the opportunity to to lead this business in a way from almost zero to to billions of in in in ARR which was truly amazing it's kind of the golden era of Microsoft and we learned a ton and then March 20120 sounded back then it sounded like hey great timing you know to leave to leave the mothership and to start a new company did this feel like a big acquisition and a big win at the time when you sold the business definitely it was again it was personally a big win but also kind of for for our ecosystem and going back to to to Israel one of the things that Microsoft did with the acquisition they acquire like something like seven startups in Israel doing cyber security and that's the way Microsoft kind of Leap Frog to to to the amazing business that they have today in cyber security so I I think it's a great case study about how company get into a new market doing some acquisition and and and becoming a leader of that market times have changed right and what seemed big back then would not seem big necessarily at least to you today right so how how does how does the size that we're talking about with the adalon acquisition compared to now the approach and what you're building with whz unlike first timer you you're like you know what's what's what's the journey going to look like in a way you know it's it's not like hey as you see in the movies I'm going to be a startup or or stuff like that you know it's going to be like a bumpy road and a very stressful one so going back a second time it's it's truly was a decision that we needed to make like are we going to do that again but definitely when we made the decision we knew we're were going to do something different we don't want to do like hey let's do another quick round and a get acquired by amazing companies that are there are out there we thought hey this time we want to take it all the way like to build to build Microsoft in a way to build like to what we learned from Microsoft they all about the scale what we knew from adalum a lot about like the the startup way and how to how to to be nimble and agile to put this together and that's kind of for us this is whiz so you get bought by Microsoft you you talk to SAA Nadella what does he tell you and sort of what what do you learn from him one of the things that that that SAA did that tell me in in the first meeting was I'm here to set the rule and you're here to break the rules and this is super inspirational in a way think about it a CEO that is truly a lot about management and manage you know one of the largest organization in the world and he like how much confidence he has like in in companies in the acquired companies he said like I'm here to you know not to teach you what Microsoft should do but I'm here to learn what adum can teach us in Microsoft that's kind of you know the learn it all mentality I was I was amazed like that gave me truly energy for for for the next you know to the next round so with whiz you what was the the first step was it to bring together your co-founders who work with for a long time and say hey let's start something new or how does it start when we started the company H we weren't named whiz our name was beyond networks we were thinking about doing network security in the cloud something that is very very Advanced but definitely we started with with the people we talk to we were customer obsessed we talked to so many customers and first of all we understood that hey this is a great idea like what we've thinking about Like Doing Network Security in the cloud but it's too too futuristic actually what we we're actually I would say was surprised to to found out that the problem that we thought is already solved organization are struggling are not even able to operationalize what they try to build they have so many Tools in in in their Cloud doing Cloud security but they're not getting any results from that and that's kind of wowed us and we're like okay we understand we trly understand the pro problem let's jump into in into that this business has grown pretty fast right can you give us any sense of sort of how how fast from your perspective and was this something that you anticipated or plann for I think nobody planned like you know one of one of the things that we we got to $100 million after 18 months we then crossed another two the $200 million and still growing super super fast so nobody's planning like hey I'm going to do that I'm going to so it's not it wasn't our mindset having said that we had the agility like to hey when we see things are working we're building more and we're scaling we had the right funds we had the right investors by the way as well to support us and also I I must admit that being a second timer helps in a way that because you know how to navigate you know some of the things that you're you're you're going to struggle with so you it gives you some of the experience and enable you to be I would say more more bold in your decision versus a first Tim but that's maybe only me but that's kind of what helped us to navigate and and and take the the tailwind and and run with that what would you say your reputation is today at a 10 billion valuation obviously super fast growing revenue is whiz still a challenger is it now big enough that people are chasing you H how does it feel I I never feel like big enough like in a way I still feel like hey lots of things ahead of us I I I I think that in a way we're startup that is only 3 years old in many many aspect but also business-wise grew like a 10 years old or even sometimes 15 years old so it's kind of I kind of like this ambiguity in a way that your still startup still even super small to even to the revenues that we have but at the same time you know you're facing the the biggest problems of the world and and tackling the the you know and beating the big the biggest giant Giants in the CL in the security space you think you can grow so fast without uh having sharp elbows and kind of up setting some people because talking to third parties um some people think that whis has a reputation for being a little Cutthroat a little aggressive in sales um not not so nice which again it's business so you could argue that's totally fine but I am curious if if that's something that you think about or you think even matters in in kind of that pursuit of market share of course it matters and I'll tell you I'm sure that we've done so many mistakes in in in the way so so definitely you know maybe we sometimes mistreated someone one and stuff like that so I'm I'm apologizing for that and this is an opportunity for us to learn so definitely this is part part of that but as a company I don't think this is the culture it's very very very different than what you describe in visiting uh your offices in Tel Aviv and talking to people around you um one thing that seems to stand out about whiz is that you have um taken a stance on social issues and sort of um wanted to have an impact outside of whiz while still building the company you know sometimes we see Business Leaders do that more after their business bus but not necessarily at the same time can you talk a little bit about where that comes from and sort of what your focuses are I think that what we're seeing more in the US that like the involvement of companies H this this wasn't exist in Israel and I think that bringing that kind of that hey companies can take a stand and companies sees themelves as part of the society that they actually part of this is important and I think that eventually you know it's it's it's not about me it's not about even the company it's about the people that are in the company that they they care it's their friends it's their family it's where they live that's why it's so important it's not something I can say hey forget about work on what you're doing forget about your friends foret forget about your family or your neighborhood it's here and now so that's why you know you need to be part of that and you cannot disconnect and that's kind of the The View that we have one of the privilege I I had like as as the first timer was like Hey to move to San Francisco for the first time leaving there I remember you know go going to the pride parade in in in SF and I was shocked I saw all these companies like parading like you know from United to Salesforce to to every company that you can Bas the big Banks the insur the insurance company I'm like none of that happened in Israel ever when you going to when you went back then to the Israeli parade it would be sorry for that it would be condom companies it would be you know clo clothing companies and beers that's kind of that's that's the sponsors for the parade and seeing that you know one of the first thing that I when when I started in Microsoft one of the first things that we've done we did a float of Microsoft with all these companies that I just described and Microsoft as part part of that and that started to change and by the way like last parade in in in Israel you're seeing Tik Tok and eBay and you're seeing you're seeing part part of the change and that's I think that's super important you've also caused a little bit of controversy or at least made waves already with whiz right um there there was something you did a few months ago I think with your in that at least was big news in Israel could you share that with our audience as well it's never boring in Israel so so so so one one one of the things that we're facing today is more about what's what's the future of Israel is democracy the judiciaries is it going to be independent so lots of lots of things like that one of the things that we was very important for us and by the way also for our investors to to to be to be fair is making sure that we're we're keeping our our company safe and it's a much more risk being in Israel nowadays and one of the things that we made we decided not to bring like the new funds that we raised and to keep it outside of Israel until we are getting more certainty about where where Israel is is facing you know it's super sad for Israeli to to say hey we're going to hold and we're going to look what's go what's going to happen but truly this this is one of the biggest risk in in my mind at least on the Israeli Tax Scene on the Cyber nation in a way that that that that we've built like if we're not be able to keep our judiciary independent and continue being a democracy when you think about whiz in the future what what gets you you know excited to go to work I think when you look at the cloud security market and the potential of that it's one of the biggest markets going to be in in in in security and the race is still open in a way unlike endpoint security when there might be a clear leader a network security there might be a clear leader CL Cloud security going to be probably bigger than than those two and the opportunity is still open so definitely that's that's excite me you know when you think about about racing and making sure that we are becoming kind of the undisputable market leader of the cloud security opportunity that's that's huge the opportunity to build a hundred billion dollar company from cloud security that's what's on on stake today for for all of us and I think that you know when you look at whiz you know when look at at the people at the team that that that we've built at the investors that we have at the customers that we W their trust I think we had like kind of the best hand in the table maybe to win this challenge so what what is winning for you when you declare victory yeah so building a a big company I think that's that's what we're trying to it's already a big company right uh we can be big year but but you know IPO is is part of the of that every entrepreneur like has has the dream one one day to go public but we need to remember this is like a milestone this is cannot be the goal this is another funding event a different funding event that what what we're used to we're g we're going to have that but the journey is much bigger than heyy going to IPO never put like you know a milestone as your as your end goal lingen agricultural equipment company is tough It's Capital intensive and cash strapped Farmers tend to be a conservative lot the California based Monarch which is raised $16 million in equity from investors and reached a valuation of $271 million in November 2021 at its latest Equity funding seems to have hit a Tipping Point last year it booked 22 million in Revenue up from just 5 million in 2021 this year co-founder and CEO prid penmetsa expects Revenue to increase 3 to fivefold as it expands he expects that more of its Revenue will come from software subscriptions which cost up to 8,376 per tractor per year the software gives Farmers real-time alerts about things like sick plants and safety risks and it gathers and crunches a ton of data to improve crop yields those numbers helped Monarch make the cut for this year's Forbes next billion doll startups list our annual Showcase of the 25 companies we think most likely to reach A1 billion valuation every farmer around the world is under tremendous pressure because of lack of Labor with this labor shortage they're also being asked to do more because a transition to sustainable regenerative Farm practce practices requires Farmers to do more operations in the field instead of spraying once with dangerous chemicals they have to do more mechanical operations like mowing or weeding that is going to cost them more in diesel more in labor which is what is holding that transition back so that's the second big challenge that farmers are facing the third big one is people asking for data from the farm whether it's Regulatory Agencies certifying agencies that are looking to certify organic sustainable practices or even consumers like you and me wanting to know more about how this fruit or vegetable that I bought was farmed all of this means that now the farmer has to go and collect data on the farm at a time when there's no labor and collecting data is going to result in more emissions from diesel equipment Monarch targets Vineyards and Fruit and Vegetable Farms for its tractors these require smaller machines than the giant ones used by those who raise corn or soy beans we are the only all El electric smart driver optional tractor in the world that farmers can buy today and the fact that it's all electric uh really helps the farmers out in reducing their fuel cost it also helps uh Us in reducing emissions that comes from farming the way we view the system is kind of three main elements so there's a fully electrified and by-wire platform in some sense it's actually the lower half of the tractor is fully electric and fully by wire controlled so that means that we have electronic control over everything that the tractor does we are enabled to learn what a human operator a skilled human tractor driver is doing because we see all the inputs that they are putting into the system when they are doing a specific operation out on on the farm and that knowledge then we can feed up into the autonomy system to say this is how your skilled human operator ran a mowing operation around and a sprain operation and that information now we can encode and start to learn from so the some of the artificial intelligence is really learning what the human operators are doing and then applying that to allow the system to recreate those same operations but in a fully autonomous fashion so the base platform is electrified and fully by wire controlled and then that connects to the roof or kind of the top half of the tractor and in the roof we have all of our computation and community communication and sensors the understanding of what the system is doing and all of the heavy computation to decide what to do with the tractor where to go how to stay centered in a row turning around at the end of a row all of that detail how to get from point A to point B how to do an operation correctly all of that is is encoded in the roof and in the software that's running at the edge in the route the third layer in the system is the digital elements of the system or the cloud-based elements of the system that data from one tractor in a fleet is reported up to the cloud lessons that we learn from one tractor from watching One driver we can learn that lesson transmit it up to the cloud and then reapply that lesson across the entirety of our Fleet the big I think like huge opportunity is this autonomy feature we as Farmers every single day uh during the growing season when there's fungal pressure which there is in every Farm region around the the world we have to put on hazmat suits and to spray chemicals to deal with fungal pathogens and even with Organic contact sprays right you still have to wear a mask and all this just with a safe day by day everything going smoothly you're exposing yourself a lot then there's also the dangers of terrain and things that could happen so by being able to automate farming we're removing the operator from the most dangerous place in the farm and we're elevating them into a much happier healthier cleaner safer lifestyle so data is is is massively important there's a great McKenzie and Company study that has come out and said said that by 2050 Farms will be 70% more productive because of data so it's reactionary it's the ability to implement changes like if you have disease pressure in a part of your Vineyard or part of your farm your orchard you can catch that earlier and hopefully mitigate a plant from potentially having to be replaced to actually just having to make a couple cuts and you're fine that plant Will Will Survive the greater data that we can get the more productive we can be as Farmers the farm owner now is seeing the big picture view and they are seeing okay I've Offset you know this many kilograms of CO2 I have these five issues in my field that have been automatically identified you know I'm seeing the beginning of a pest or or of a fungus or something I'm starting to see the beginning of that because that data is starting to be reported back so kind of at all three of those levels at the operator at the kind of farm manager and at the farm owner the insights that the system is providing are enabling all three of those people to do their jobs better and to basically spend less time to get more work done what we are seeing with our uh Farm customers is for the first time in agriculture as well a lot of them have purchased multiple tractors some of them have bought 10 17 tractors at a time in their first year that tells us two things the fact that they're willing to buy a number of tractors in the first year of production tells us that their challenges are real and huge where number two they're also looking at a tractor as a solution for some of these challenges and the fact that we can actually address these challenges for them I think is the game Cher so we're essentially creating new revenue streams for the farmer in this new world of sustainable farming and carbon credits for agriculture we are saving them Opex in terms of diesel savings and also in terms of Labor efficiencies I come from a world when you know uh phones used to cost $ 20 $30 now all of us are comfortable paying more than $1,000 sometimes for a phone the same thing has happened with smart devices when we think about thermostats or in know security doorbells Smart Ones our security cameras once we digitally transform a machine the value provided to the end user is a lot higher so we actually feel that our tractor is Affordable in terms of fruits and vegetables Farm being able to access the tech and get the savings but long term there's nothing on this tractor that prevents us from continuing to drive the cost of the device down to where every Farmer in the world can eventually buy a tractor powered with Monarch technology or a monarch like tractor hydrogen is the universe's most abundant element it's everywhere it's in anything it's number one on the periodic table but actually getting it and using it as a form of clean energy has been very tough for the last 30 years a lot of big companies around the world have been trying to figure out how to make hydrogen attainable use it as a power source for a fuel cell as a stationary energy source a way to power buildings it hasn't really worked out up to this point but the last few years things are beginning to change excitement is building up specifically around green [Music] hydrogen this is a way of making hydrogen that uses zero carbon inputs and produces no emissions other than oxygen in the US nearly all of the hydrogen used in oil refining food processing and other industrial processes is considered gray this means it is extracted from natural gas using processes that generate carbon dioxide if green hydrogen can be used at large scale instead of gray hydrogen this would make it a powerful tool against climate change an unlimited source of energy and a very lucrative business internationally and we're in Rochester New York at Plug Power which wants to be one of the leaders in this new emerging technology manufacturing both fuel cells which can power a vehicle or generate electricity on a stationary system and also making electrolyzers devices that take water and electricity and make hydrogen to power those fuel cells and we're speaking with Dan oconnell here at the gigafactory that pluged runs and tell me a little bit about what we're looking at here this is a an electrolyzer uh and what does the electrolyzer do exactly how does this work this is an electrolyzer and this is a one megawatt unit and what this means is we can put a megawatt of power into it and make 420 kg of hydrogen what we do is we put elect it in we put purified water in the Catalyst inside splits apart the hydrogen and oxygen in water and we capture that hydrogen and use it to fuel vehicles depending upon the capacity of the hydrogen on board storage inside the vehicle but they usually use around 20 kg so you could probably fill about 20 Vehicles off of one megawatt electrolyzer or you can think of it as like 400 standard sedan Vehicles next to you we have uh the fuel cell the fuel cell stack what is this doing yeah you can think about the electrolyzer splitting the water into hydrogen and oxygen what and requiring power here we want to take that hydrogen and turn it back into water by combining with oxygen and thereby generate electricity and use that electricity to do some work for us plug poers technology supplies hydrogen for a number of applications including as a fuel for stationary energy generation and fuel for trucks but the company's primary Market is Material Handling in the form of hydrogen powered forklifts plug Powers has about 65,000 forklifts are being powered by their hydrogen at large companies such as Amazon Walmart and Home Depot so a forklift driver will drive up to a pump just like you do today make a couple of connections and once those connections are made you'll be able to put a kilogram of hydrogen on board the forklift and be able to run for 8 hours and the hydrogen's coming out in what form is is it is it liquid is it is it gas no it comes out as gas at 350 bar or 5,000 PSI we take the water off and when we get all the data off every time it refuels we monitor everything going on with that stack inside of that fuel cell unit to be able to determine what's going on we can predict life we can predict component failures so it's really a a wealth of data that we get every single time it refills when did the transition really happen where you started to see uh fuel cell hydrogen fuel cell powered uh forklifts replace other types of of of Technologies yeah about eight or nine years ago we started a small Fleet at Amazon and we had half of them with batteries and half of them with fuel cells the forklift drivers love the fuel cell ones because of what we talked about the power the range and the recharge time so the fuel cell started to win out we've seen probably around a 10% efficiency Improvement at those warehouses where we've converted over to fuel cell another big player in the green hydrogen race is a company most people would probably not expect cumins the world's largest diesel engine maker its clean tech division is known as accelera and we had the chance to visit its Canadian operations in Miss aaga Ontario at this facility we actually have a number of buildings the building that we're in right now is a building we kind of refer to as the fuel cell building or the fuel cell Technology Building in this particular building we do have a small uh manufacturing cell that makes fuel cells uh for General use in in various industry as well as we develop the next generation of fuel cells we have a large R&D component to the folks that work here about 30 years of History we tried to capture in this small Museum and what you're seeing here Alan across the shelving is a progression of fuel cell technology development that started off way back in in the mid 1990s uh when we became first of all a test station company that was building test stations which people who were developing fuel cells would need and then then we started to test people's fuel cells until we finally ourselves decided to go into the fuel cell business with special focus on commercial vehicles so we were not a fuel cell for passenger car company we were a fuel cell for commercial vehicle company as hydrogenics and in the shelving units here you see a number of years the 2000s the early 2000s in these days we were making fuel cells that when they lasted an hour or a day we'd pop champagne bottles if you will so here at this facility um you're developing uh high-powered fuel cell Power Systems and electrolyzers but on the fuel cell stack the fuel cell motor or engine I guess if you want to call it um you're you're developing something that would be very powerful powerful enough to actually operate a Class 8 semi um tell us a little bit about what we're looking at right here what is this unit exactly yeah this is this is a powerful when paired with its brother another one just like this so it's twin I will say this is our fourth generation fuel cell which really shows the commitment that Comm and accelera have had to continuing to develop this technology over time we started with our first generation of fuel cells in second and third in the 30 the 40 the 45 kilowatt spaces those were low pressure technology as we Advanced the technology what we found was that we needed to move to a variable pressure which allows for more power density this is a 150 kilowatt stack and as I mentioned it will be PID with another we're taking a modular platform approach um to have 300 Kow of power to commercialize um the the system for uh heavy duty vehicles class8 in North America obviously you know Cummins is is a giant in the trucking industry it's the world's largest uh diesel engine manufacturer is it is a little curious that it's also pivoting into something like hydrogen fuel cell which would seem to be a competing technology eventually with its diesel tech we actually see the diesel technology as an enabler to get to more Advanced Technologies because we're leveraging the innovation of commin which is a company that's over 100 years old we have significant experience in terms of understanding applications and Duty Cycles and how the products work in the real market and then we take that and the system integration uh skills we apply to the hydrogen to the hydrogen fuel cell so we actually think that the core technology is a huge enabler as to why we're able to be successful in the long term with our destination zero strategy to see some of excel's hydrogen trucks being worked on and driven on public roads we toured its facility in West Sacramento California here at the West Sacramento facility we do powertrain integration and we focus on fuel cell powertrains so we install fuel cells we install batteries Motors everything to make the trucks run as a fuel cell vehicle uh and then we do testing out of this facility and we do support for service and validation so the range we're hoping to get it varies by uh application but when we look at Long Haul Trucking for example um we're targeting at least 500 Miles preferably even 600 or 700 miles in the long run maybe after 2030 but in the near term we know we can get 450 mi in in a trucking application a class8 truck that's really exciting because there are battery Vehicles Class 8 trucks that can get around 300 to 400 miles but when you put the the full weight and the full drive cycle that these trucks are going to be put into uh they they don't get 450 Mi contrary to what some battery electric vehicles might say and so for those really intense applications 450 Mi is a really big deal for a zero emission powertrain in addition to long-distance Trucking acceler is also involved with hydrogen powered trains it already has a number of clean trains running in Europe in a partnership with Stam and recently it helped power the first Hydrogen train in North America this is what we call an FCC a fuel cell composition this fuel cell composition also goes in pairs there are two that are mounted to the roof of passenger trains okay and accelera is actually powering the world's first Hydrogen fueled commercial passenger train in operation in Germany we've already delivered already uh over 40 trains we have another 10 that are being delivered later this year and then several next year as well so our European Fleet will actually be very substantial in size right just this summer here in Canada up in Quebec we ran a demonstrator train for 3 months from June just until the end of September would when it uh concluded from uh Quebec up to Charo and it was the first North American passenger train powered by hydrogen fuel and the reason we wanted to do this demonstration project which is also in partnership with our key customer in Europe allam trains is to show the marketability and the capability of hydrogen prop technology across different environments and different Duty Cycles and one of the things that made that demonstrator project really unique was that it encompassed the whole endtoend hydrogen ecosystem the hydrogen that was powering that train was created by an electrolyzer purchased by another one of our partners haroa energies exceller was able to provide the electrolyzer which generated the hydrogen which then powered the the hydrogen fuel cell train the train we br to Quebec is one of the test trains that we had for the the testing campaign for the first generation because we wanted to make sure we actually demonstrate uh its operability here in North America the feedback has been great and frankly passengers but also we've had a lot of delegations international delegations coming having interest in the train governor of Massachusetts and Vermont and uh and Maine came came to actually tour the train and everyone realizes that first it's real it actually carries passengers it's smooth it's very quiet it's an enjoyable ride so we've had tremendous feedback from to get a closer look at acceler electrolyzers Alex selli the company's managing director for hydrogen Technologies walked me through an assembly area he tells me one of these machines uses about 5 megaw of input power and produces about 2 tons of hydrogen per day so there would be to put in perspective would be enough to to uh run about 60 buses like on the type of Transit application for a day okay um but then you have some customers that want sometimes three four five of these machines um the you know one uh customer that we have very keid up in uh beur uh north of Quebec has actually four these machines and um you know they're basically using it for for industrial gas production but that's that plant has been running for almost 3 years now it's actually the largest pen plant operating in the world today who are your primary customers who who who is buying these in the short term a lot of the you know the industrial gas companies the merchant gas companies you know folks like a ke Lindy Air Products um but we also have uh you know also done a few projects with uh you know folks on the power generation space so the first five units that we produced out of here they're in the process of being commission at Florida Power and Light okay and they're going to basically be producing green hydrogen to decarbonize power production so they're going to blend some of this hydrogen in a combined cycle turbine that today uses natural gas they'll start blending hydrogen uh to decarbonize you know electricity production we also have sold quite a few of these uh some of these semiconductor plants they are being you know insured back into the US uh you know from the chips act hydrogen is one of the gases you you require to produce chips and then uh you know more recently there's a lot of interest in E fuels so if you think about sustainable aviation fuel uh ethanol ammonia all the way from you know smaller projects to very large projects you know for that type of application the the beauty of hydrogen you know if you think about it's it's very versatile molecule right CU it can be used as a fuel for Mobility but then it can also be used as an energy carrier um you know so if you want to move you know molecules from North America to Europe so to help uh with some of the energy crunch that Europe is going through you can also use hydrogen for that so with all of its potential what are the remaining obstacles for green hydrogen to be more widely used one significant factor that accelera plug power and other hydrogen companies are waiting on is a production tax credit for clean hydrogen in section 40 45v of the inflation reduction act in particular they're waiting for the US Treasury Department to clarify guidelines on what forms of hydrogen fuel will qualify as clean and low or no carbon enough to receive a tax credit the cleanest methods of hydrogen production would qualify for up to $3 per kilogram but if the guidelines are made too lenient there is a fear that less clean hydrogen production could create millions of tons of greenhouse gas emissions and undermine the cleanest hydrogen producers another factor to consider is the US Energy Department's recent designation of seven hydrogen hubs across the country that will share $7 billion in Government funding and $43 billion in commitments from companies at Plug Power I asked the company's VP of electrolyzer Technology Courtney midat for his thoughts on hydrogen's future what do you think needs to happen and what's going to happen to sort of build out the hydrogen economy and make it a more widely used energy source in in a range of applications beyond what it's going into today yeah absolutely that that's a great question and and what will happen and what it comes down to is the cost of course it's it's absolutely the the cost so so originally where you seeing the the hydrogen where plug was able to find a niche uh uh for hydrogen right from the beginning was uh for the fork lift trucks so there even electrolysis can be competitive right now because the the hydrogen has to be at high pressure and it has to be very very pure to operate in a a fuel cell so in in that smart that small Market we we can compete uh today we're getting uh as our costs come down we're getting the the next area um that that's willing to pay a little bit of a of a price premium is hydrogen as a chemical not hydrogen as a fuel but what's also coming down what uh what affects us even more than our cost is the cost of the renewable energy renewable energy as you know solar and wind those costs continue to come down and down so for instance if in some areas the cost of solar is as low as 2 cents a Kil kilowatt hour now it takes 50 kwatt hours to make 1 kg of hydrogen and 1 kg of hydrogen is about the equivalent of of a gallon of of gasoline so again you you get that that green um solar hydrogen for 2 cents a kilowatt hour and uh and you use uh 50 kilowatt hours to make a kilogram of hydrogen so you can see how quite quickly we can get under $2 uh for the the cost of a kilogram of hydrogen the department of energy has a goal for to get all the way down to $1 and and and at a dollar we uh we are competitive in so many areas uh and that's why you see the enthusiasm for hydrogen so high now certainly one of the challenges is understanding the adoption curve understanding the demand and how fast that will grow and I think the factors that are affecting that adoption are price of hydrogen and infrastructure so availability so the customers aren't going to say order a th000 trucks if they don't have a fueling station for a th000 trucks right so so infrastructure is one of the the main challenges the other is cost right now the material to make fuel cells and the other parts of the uh fuel cell electric vehicle are still a little bit expensive and so there's a there's a cost premium over a diesel and even over a battery electric but that cost is coming down and that's partly what we're trying to do is get that cost down and so when the cost comes down uh and the infrastructure is available then the TCO we call it the total cost of ownership for our customers will make sense and they'll be able to um basically replace their whole fleets with fuel sell electric trucks there are still a number of things that need to happen to make that a reality in North America on the infrastructure side production of hydrogen for example is high on the agenda uh cross US and Canada but Investments have to be made to really produce hydrogen green hydrogen is better obviously it's coming from renewable uh electricity um and then there's uh this discussions that have to happen around distribution of hydrogen uh the network and stuff like that and then uh the incentivization of that kind of initiatives against keeping kind of the old diesel trains we have in North America 27,000 diesel locomotives and the territory is pretty much not electrified 1% of the tracks are actually covered by ceries and that to be compared to 60% in Europe so there's a huge Fleet which needs to be replaced at some point and there's a very low electrification rate so in essence that could be really uh a perfect match to uh trains like that which are basically running without cenery at zero emission but there's a lot of things that need to happen and um some states are moving faster than other but definitely something that we're watching and uh we want to mature the technology and make it fit for the conditions that uh we have in North America the long distances the big freight trains for example require a specific uh design that we still maturate clearly there's still a lot more that needs to happen before green hydrogen is as present in our lives as gasoline or batteries as other large economies such as Japan and Australia set their strategies for competing in the hydrogen space the us will have to make sure it can ensure its role as a major player and the decisions it makes now particularly around how to define clean hydrogen could determine future jobs pollution levels profits and whether or not America will hit its net zero emissions targets by 2050

Channel: Forbes

Views: 727,095

Keywords: Forbes, Forbes Media, Forbes Magazine, Forbes Digital, Business, Finance, Entrepreneurship, Technology, Investing, Personal Finance, tesla's latest, generative AI, Steve Jang, Vanta, green hydrogen forbes doc, what is green hydrogen?, Tony Hsieh’s, zappos, zappos founder, green hydrogen climate change, elon musk, ai, tesla cybertruck, Tony Hsieh

Id: A9QFOZhA1b0

Length: 160min 49sec (9649 seconds)

Published: Wed Dec 20 2023