Alan Cooper, ON.energy | Powering Tomorrow

Palo Alto Studio Connection Silicon Valley and Wall Street. I'm John B here with Dave Volante, my co-host. Hello, I'm John Furry, host of the Cube. Here in the Cub's NYC studio, of course, we have our PaloAlto studio connecting Silicon Valley to Wall Street. This is our powering tomorrow series. We're kicking off. We're meeting with the leaders. We're bringing the energy solutions and all the engineering around AI infrastructure to power the AI factors and the AI value proposition. Energy bounds the value and we're here to discuss it. Alan Cooper is here, the CEO of On Energy. Alan, great to see you. Thanks for coming on the cube. >> Thanks for having me, John. >> So energy is obviously the most important asset for AI. We've heard Jensen Wong at Nvidia talk about it, bounded by energy. I I've been introducing the idea of capital finances now in the equation because of the of the importance but everybody's talking about Nvidia the chips the AI factories the density but not a lot of people are talking about what happens between the data center and the grid that is kind of the biggest story because there's a lot of data that'sorked and the energy that powers these factories there's a lot going on there and it could swing the sc tip tip the scales and swing the the the balance of power literally. Yeah, that's exactly right. I think uh and that's the universe in which we live, which is exactly the place where the grid and power generation meets a data centers. Um and really that's the constraint right they're we're talking about uh data centers being energy constrained. Uh the reality is that energy largely is abundant still in this country. So the problem largely is capacity which really is a different way of saying that we're transmission constrained and even that's a different way of saying that we're transmission constrained during different times during the day specific you know largely it's like 40 or 70 hours during the entire year that we're constrained >> and that creates a real problem for connecting data centers and we're trying to create real solutions to solve that for >> every single person has an experience experience. Okay, it's a heat wave conserve power like we need more power. In fact, the requirement of power has been forecast to be greater than the entire homes populated in the United States for this AI. Where do you guys fit in the equation? Explain what you guys do. It's important to understand the context. >> Yeah. So, on Energy created a patented technology. Uh our flagship solution is called uh AIU UPS. It's an uninterruptible power supply that sits in between the data center and the load. Um, sorry, it sits in between the data center and the grid. Um, and it fully decouples them from each other. And so essentially what it does is it serves perfect power quality into the data center with full uninterruptible power supply. Um, and it it makes the data center invisible to the grid. um which is a really useful asset now as data centers are getting increasingly large uh increasingly volatile with AI training loads um and with regulations becoming increasingly stringent with how AI data centers have to perform uh and behave on grids with all of this uh changes to their data center architecture we created a unique architecture for how they connect um >> so UPS on every power supply I think of oh backup in case the electricity goes out or my PC. >> What is what's different about what you're doing? Because you're an interface of the grid. So, what's the uniqueness of it? What is it doing specifically? >> Yeah. So, our system sits completely in series to the load. So, it means all of the energy is flowing uh from the grid or from on-site primary power generation through our system and into the data center. So everything is flowing through the system into the into the data center um not in parallel to the load. So it doesn't require any switching times, doesn't require any uh specialized metering equipment and that's very unique because essentially what you can do is interconnect a single standardized asset onto the grid um that is highly predictable. It's basically a battery that's always charging. uh you can standardize across all of your uh data center fleet. The utility knows very clearly what it's getting at all times which is this a very predictable battery storage uh like asset and from a data center perspective it's getting perfectly clean power all the time. So it's not a generation problem gener generating energy, it's the stability. >> Correct. It's a it's a it's a it's a stabilization asset. It's a it's a it's a uh it's a power control system for uh the entire campus. >> And what's it like for the data center? They don't have it. They have to deal with what what's the what's the problem? What's for them? >> A million different problems, right? So a data center that doesn't have it has to uh still has to have uh a UPS to protect the compute, right? right? They're investing uh billions of dollars into compute architecture. So they're they're typically using low voltage UPS to protect the compute. Then they're likely installing uh traditional battery storage to meet the voltage ride through regulations and other grid codes that they need to pass all these interconnection requirements. They need to make all these things talk to each other. They need to have backup generations. And basically our technology smashes all these things together into >> a boatload of hassles. >> Boat load of hassles >> and potential catastrophic problems. >> Correct. And like single failures could could mean not only failure inside the data center but potentially grid failures and grid outages. Right. >> All right. So you must have a lot of people buying the system given the size of the buildout. Explain the uh before we get into the the that feature. What is the scope from your standpoint of the AI buildout? Um the demand is super high. we seeing the big hypers scales take out debt vehicles. >> How big is that demand in your mind? Scope that for people who aren't tracking it. >> I mean demand demand is uh demand is massive. Uh so far we actively building uh a 3 gawatt out of uh 5 gawatt commitment from uh our wonderful uh a key customer in Cruso. Uh Chase was on on on here a few weeks ago. Um we uh are capturing many more customers. We're seeing you know depending on who you believe between 20 and 50 gigawatts of a real load being constructed per year between now and 2030. Um that's exactly why our technology is so important because with that amount of load growth it you're topping up on real capacity constraints from the grid and grid operators are trying to come with a real solution to help the UA the US win the AI race >> and the the reality is there's enough generation on the grid to support it. there just isn't enough capacity and these types of solutions are exactly what are designed to >> what are some of the issues with the grid if you had to kind of throw the magic wand at the grid say hey fix that one two three what would it be >> I think um fundamentally like I I think uh they're doing this to some degree across the board so like you know shout out to to to all the people who spend tireless time working on this but number one is uh you know interconnection is is in the process of being uh resolved and revolutionized, but it needs to get better and faster. Um the process of interconnection is complex because they're protecting the average citizen. Energy is a basic human right at this point and so they need to make sure that affordability is maintained and that things that are being connected are safe for everybody. Uh and I think that um they need to make sure that that is faster and that projects that are being submitted into interconnection are real and that they are being implemented with technologies that can make data centers grid safe and that can build compute without breaking the grid. That's exactly kind of stuff that we're doing. Um I think number two, there needs to be increased flexibility on the grid. And I think everybody's been chasing that um from the increase of like decentralization of the grid from like you know large concentration of generation to decentralization and now battery storage and I think now this is a huge opportunity for storage behind the meter and even you know generation behind the meter. So all this primary generation that these data center are building can be a great asset for the grid if somebody can orchestrate that and sell it back into the grid. So that's another >> so a lot of either dormant power or not connected power >> and all these things of like you know fully islanded or hybrid solutions or all the story about speed to power why don't we turn all of those assets into assets for the grid and I think those are great mo for moments of constraint right >> I remember there was a t concept called grid computing back in the '90s and I think we're going to get to a place where energy efficiency is going to be connected >> I want to get your thoughts on your product and you mentioned Caruso Okay, Chase was uh we saw him last week in San Francisco. Uh he was on many times, but that is an example of some of the build that we're seeing these big AI factories. This is what my narration at the beginning was what happens between the AI factory and the grid. That's where you come in. You're a critical ingredient for him because he's building essentially a massive AI factories and it's completely built from the ground up. He needs to have that. What's it like working with Caruso? share some of the experiences and how it all came together. >> It's a beautiful and exciting honestly. It's a it's uh you know every day is a new adventure there. There's working on many different projects and solving a bunch of different puzzles. I definitely feel the our companies have a very similar um similar mods and similar uh rhythms and paces and so I think that uh has helped the relationship quite a bit. They're building some very ambitious stuff at a a pace which very few companies can keep up with >> and we are doing everything necessary to keep up with that pace that Chase is uh running and and a shout out to all of our our friends at Cruso. They're they're really uh at the top of their game >> and there's tons of Neo clouds coming out. I'm seeing some compute clouds come out. We're seeing a ton of activity. Um the market's reacting behind us. They're making trades. Um the market's hot for AI infrastructure. It is >> explain some of the momentum you have and h how is that being understood by the capital markets? I think the c you know the the capital market seem to have shifted particularly in the last couple weeks at least from my interpretation of it from uh you know big plays into hyperscalers and and the monetization and they seem to have gotten a little bit cooler on their infrastructure bets into their own portfolios but shifted into exactly the space that we're in which is sort of power generation and and um you know and industrials plays and power gen uh and I think these cycles. So, I I you know, I I wouldn't I wouldn't read that much into it in in in these horizons. I think ultimately this is a uh a long-term strategy that we're building. We've been building these types of solutions for 10 years. >> It's interesting the capital markets and the financers, the banks, too. They're looking at this market. It's almost a whole clean sheet of paper. It's a brand new generational shift. >> The risk variables, at least my observation, there's no there's no comparable. >> Yeah. And so they're trying to squint through the risk. You solve a big piece of the puzzle because you can quantify downtime. You can quantify problems that you solve. >> Yeah. >> Um >> they have to model that out because the capex investment. >> That's right. >> People are always like, "Where's the bubble bursting?" Well, the payout's coming. People the demand's still there. So the bubble conversation to me is irrelevant because there's no bubble. There's maybe some speculation rise on prices, but >> there's demand. And maybe what I would comment, John, is that it seems to me that the market every time it shifts from like a definitely not a bubble to maybe a bubble, it shifts from like bet on the hyperscalers to maybe bet more on AI picks and shovels, right? And maybe that that's the toggle that keeps shifting, at least in my impression. >> Um, and I think that's exactly shifted. >> How should people think about your company? >> I I I think we're an AI picks and shovels play. Of course, I we we build a we build specialized industrial power technology. We we build very we build it very well. It's a we've been building it very well for a long long long time. We build uh patented equipment in specialized factories. We build it right here in the US uh very proudly and we're deploying it at the largest scale possible at some of the most ambitious. >> Can you share some examples of some deployments momentum? Um so we're we're actively uh deploying about five gigawatts with Cruso. We uh have closed on other uh projects which we can cannot be named. They're projects unfortunately are are extremely confidential as uh as most of the industry has become. Um it the the product market fit has been um extremely attractive particularly in markets like URKT where regulation again around the interconnection um requiring solutions such as ours to keep data centers safe on the grid uh for things such as voltage ride through and we call the AI load ripple where basically uh data centers especially >> what's it called >> the AI load ripple So essentially what happens are uh these data centers are and and high performance computing are uh large clusters. They're all processing about a gigawatt of compute at a time and they're all processing essentially the same problem at the same time. And then as they cache and process the information they drop the load about 70% before they take up again. And in that process essentially it's like strobing on the grid. And that that presents a big problem. It's like a it it it spits out like transients uh onto the electric grid and essentially the uh grid operators are saying, you know, let's hold our horses uh and let's solve this problem. Let's make sure that at least uh you're not negatively impacting the grid if you're going to let you connect. And so that's a regulation that has been formalized across Urkot in Texas and uh likely is a expanding national here soon. >> Our solution solves a lot more than that. But it's like it's indicative of the same trend which is uh >> sort of the barometer shifting from hey I don't want you to catastrophically impact our grid and our communities to hey I don't want to feel you at all to hey data center how about you become a grid asset and increase flexibility and become positive to the grid and I actually see that trend happening across all of our customers and hyperscalers shifting to like how do we become positive participants >> we're seeing I'm doing a story right now in carbon credits a lot of this kind community stuff where there's a lot of economics involved in giving back. I mean, basically what you're saying is that the grid wasn't built for this. >> It was not. >> So, so you saw that immediately. >> But on the business side, there's requirements to run these factories or anything at scale. I mean, a business would have electricity to have power the lights. >> That's right. >> Run the operations, but not run monster data centers. So, you're essentially bridging this generational shift. >> That's right. Essentially, they're saying, you know, the grid is saying, you want to connect this thing, you got to put a firewall between me and you >> and and that seems completely fair. And for for and from the data center's perspective, they're saying >> if the investment is modest, >> then that seems fair, too. >> I love how computer networking technology comes into all examples, then you got the DMZ, you got inside the meter. So, like this is what happens. And this is what this is the new architecture. You're redefining the architecture. that is and and we and we we really are redefining the the architecture and and and we define it like as the the topology of the of of the data center has to be rearchitected. It's a great opportunity because they sort of have to be rearchitected anyway because of the nature of high performance computing moving from being like 30 60kw racks and now moving towards like you know extreme high density computing. So I think we're taking advantage of that opportunity to really rethink how a data center should be built and and >> powering tomorrow pun intended as a double entandra on the words but >> talk about the journey um that you've had. Obviously you're in a good position the product market fit. >> Yeah. >> The shift to the new architecture is happening with the grid and its relationship to what's connecting to it terms of size and scope. Yeah. >> Um has it always been um easy? I'm sure, you know, I've heard stories of regulatory nightmare, you know, hoops you got to jump through, but now it's pretty clear that there's economic value in these data centers, notwithstanding people who don't understand what it means and protesting the data centers. But you're e you're connecting an economic engine >> Yeah. >> to the to the internet and the grid. >> I mean, the the answer is uh none of it's been easy. All of it's been rewarding. Um, you know, it's [laughter] been it's been uh it's been 10 years of trying to help customers work through uh deeply unsexy problems uh both behind the meter and in front of the meter of like how do you solve this resiliency challenge uh and using a deep knowhow of batteries and power control systems to uh connect these two problems and solve them and I think finally it's being applied to a space that is uh you know creating seeing real change and really is like a like a generational opportunity. So, we're we're fully taking advantage. >> When was the uh the markers in time where people started to get it and then when did it click in >> or where are we are people still figuring it out? Where's the journey? >> So, I think um you know I think there was a very clear marker about 18 months ago. Um, you know, we started bringing uh like a full data center push about 18 months ago, and I think uh the team over at Cruso was clearly the first to to get it. Um, particularly the digital infrastructure group over uh at Cruso with Chris Dolan and and Jason Hutler over there. um you know and uh since then there's been just s such widespread buyin from everybody inside of you know the the data center architects inside of a lot of these uh fast growing particularly like the energy first >> leaning firms I think now more widespread adoption against maybe some of the more like traditional data center developers who have more you know three-year road maps for technology development QTS is aligned the firms like that um and obviously into hyperscalers who ultimately have to be convinced uh as the end users right >> is there a trend that you're watching carefully that impacts you or product opportunity on the road map I mean what jumps in my head is energy switching energy routing I mean I've learned here at the NYSC that their parent company ICE they do energy futures I mean I see people vertically integrating in their energy into their data center they might want to maybe share that, broker it. I mean, there's a there's money involved in energy. So, I can see a lot of a action happening. >> You know, I do I you see like energy seems so decentralized still like the energy generation side of it still seems uh extremely decentralized. I do see a trend of more uh private equity scooping up uh power generation companies. So, that that seems to be a really interesting trend. um you know the acquisition of uh or the take private of black the take private of AES by Black Rockck GIP was an interesting example. Um I think if I look into the future I think a lot more utilities are going to be uh taken over potentially by like more technology company bents with exactly this in mind and I think that's probably a wise strategy as data centers become a more interesting profile as as part of their portfolios. um lots of new technology uh lots of tech technology risks still um I think maybe uh that's one aspect of of our solutions that I really liked where we leveraged >> really reliable existing supply chains at full scale to deploy this thing and at gigawatts which like do not underestimate what the crusos of the world and what these people are trying to construct at the pace at which they're trying to construct because there are 9,000 people on location where we're building today >> and they need their stuff on time >> the day they need it and you cannot be a minute late and so I think you need to be up to that standard and your whole supply chain needs to be ready for that and I think some of these new technologies are very interesting very attractive >> but will they be ready for that level of scale and I think that's everything there >> yeah timing is everything and capital is everything and like >> manufacturing is hard. >> Yeah. Yeah. And and the speed that they have to deploy these factories. Caruso's got an ambitious goal. Um but this operating value when you when it's up and running, not just build, when they start operating it, they're going to need to have that steady energy to make sure that the systems are running and have resilience. >> That's right. >> Um final question, what's your focus now? What are you optimizing for in your current situation? Is it more uh technology build, more distribution, more customer go to market? What's the focus? Yeah, I I think uh like everyone a little bit of everything. So like uh the whole world is coming at us really fast. Um >> building out a multiple concurrent projects and multiple uh states at the at the same time for multiple offtakers is is its own uh beautiful challenge. It's a great opportunity. um continuing to improve the product relentlessly which I think is a big part of our roadmap like how do we continue to have the best product on the market. We have a we currently have the best one and I I I guarantee you that we will continue to have the best one. >> Um and how do we continue to add more value to the customer than they would ever expect from us. So and I think that's a lot of stuff that's beyond the product. So how do we continue to add flexibility? uh how do we make them have a more compelling value proposition to their end user which are hyperscalers and their communities right so how do we make them more flexible to to the grid >> and as we said at the top AI values bounded by the energy available Alan thanks for coming on sharing what you're doing and and your insights here on the cube NYC wired program >> thank you very much John >> all right powering tomorrow our new series talk to the leaders in energy making it all powering the future again the energy is the bounding function to the value being created by AI it's happening super fast. The industry leaders are coming together to do that. I'm John Furry, your host of the Cube. Thanks for watching.