Guys, this is one of the most amazing entrepreneurs that you're going to meet, Jim Letinski, the founder and CEO of MP Materials.
Thanks, good to be here.
Hi, Jason. Hey, how are you?
So let me set this up.
Jim was a hedge fund guy, running a pretty successful hedge fund, and he ended up basically investing in something called Mollicorp, which went out of business.
Yep. And you did this incredible thing, which is you said, you know what, screw this.
You essentially shuttered the fund, took over the company, and fast forward many years later, you are the largest and only, I think, supplier and refiner of rare earth materials and maker of magnets inside the United States.
We're 100 % of the American industry.
100 % of the American industry.
You just did two really incredible things, actually, in the last couple weeks.
One was you announced an enormous public -private partnership with the DoD, $400 million, etc. The second is you announced a really big deal with Apple.
Take a huge step back.
Talk to us why rare earths matter.
Tell us about the supply chain for AI.
Tell us why you're doing this.
Rare earth magnets are really the feedstock to physical AI.
Robots, drones, everything we're talking about today.
the biggest industry in the world to come.
Essentially, electrified motion requires rare earth magnets.
So you mentioned the predecessor went bankrupt.
There was a feeling when I took over this site with my co -founder, and this goes back to 2015.
Where is the site? Oh, it's in Mountain Pass, California.
So you'll be familiar if you take a 45 -minute drive from the Las Vegas Strip just over the border in California is the site.
You actually can see it from the road.
And it's actually really the best rare earth ore body in the world.
The thing about rare earths is that when you mine them, you also have to refine them.
And it's really expensive and difficult to refine them.
It's really a specialty chemical process.
And so it's really a, think of it as a multi -billion dollar refinery that you need to have just to separate them.
And then once you separate them, you need to turn them into metal and then a magnet.
And so there's a multiple layers of this stream to get this supply chain.
And of course, you could have all the rare earths in the world, But if you don't make the magnets you're sending it to China or you could have all of the magnetic capability in the world But if you don't the rare earths you're reliant on China And so our vision from day one going back to we originally bought these assets out of bankruptcy Officially it was a two year battle took it out in 2017 And there was a perception that we just couldn't compete against China and what we discovered actually is we could it's a world -class site but we had to reorganize the process flow, and then we had to make
investments to move downstream.
So over the last eight years, we invested about a billion dollars.
Shamatha, as you know, we took the company public in 2020.
We built out the refining capability, and then about four years ago, we announced we were going to build a magnetics factory in Texas.
We built that factory.
We have GM as a foundational customer.
We're now producing auto -grade magnets to GM's spec, and we'll be ramping up sales to GM at the end of this year in magnets.
And then, Chamath, you referenced a couple, it's been a busy few months for us.
We announced a pretty transformative public -private partnership with the Department of Defense.
DoD is, there's really three pillars to this deal.
DoD is becoming our largest economic economic investor, as well as they're going to provide a price floor for our commodity so that the Chinese, sort of Chinese mercantilism, we can get into that, won't take the price of the commodity below the cost of production.
And then as a result of the DoD investment, we're going to accelerate the buildout of the magnetic supply chain.
So we're expanding our facility in Texas for Apple, I'll talk about that in a second.
But we're then going to build a 10x facility to 10x our capacity with DoD as our 100 % offtake partner, customer and business partner, because we'll be splitting profits 50 -50 with DoD.
So to just translate this, it's not a handout from the government.
They didn't gift you $400 million.
They invested in your company.
They have warrants.
They have equity. Yeah.
So they invested. They both are an owner.
owner. They also are an upside participant in our commodity to the extent that the prices take off.
And then they're also 100 % offtake customer.
We have a guaranteed level of profits to want to build out this facility, but above a certain threshold, they're a 50 -50 economic participant.
So there's really, you the taxpayer, yeah.
So this is a, and maybe I'll say something wild here.
This is a true win -win, obviously great for MP shareholders.
Great from a national security and commercial national security standpoint, because we're going to have enough magnets to provide, you know, real certainty in the supply chain for the physical AI revolution and other industries.
But it would not surprise me if when we, five years from now, hopefully we'll do this conference and Chamath, you'll say to me, Jim, you know, I remember that deal that was the first of its kind that you did with DoD and the government made money on you.
The taxpayer made money on doing this.
And I'll say, yeah, I actually think that that's going to to be the outcome because there's sort of an element of mutually assured economic destruction.
If the Chinese believe that America has national champions too, then there's no point in subsidizing the rest of the world.
And so I think you can start to see prices normalized for some of these things and free up our ability to invest and expand.
Why go to the government for this investment as opposed to the private markets?
Well, because it's that issue.
This is sort of one of those, Because obviously, you have to go back to World War II or the railroad boom, where you really need government and credit.
I mean, this administration did something totally unique.
Which piece? Why do you need the government?
Mercantilism. Straight up mercantilism.
Because the Chinese will sell magnets for below the cost of raw materials.
And so every time there's somebody who makes progress, they can put them out of business overnight.
And so it's difficult to want to make the investment.
spent and so frankly with the department of defense the scale that they wanted us to build on the time frame that they wanted us to build there was no way we were going to make that commitment we're fiduciaries right we have shareholders there's no way we're going to make that commitment without certainty that we would not be destroyed by mercantilism and that we would have a customer for the magnets how big of an industry is physical ai meaning we see the robots we're told the robots are coming we're told there's going to be billions of them are they actually being deployed at the scale and at the pace
that we've been told?
Well, I think that that is a question for, there's much smarter guests on this.
For the rest, I'll give a plug the rest of the day.
Obviously you have the best of the best providing that feedstock.
I will say that I think one of the big drivers of our deal was, as we've seen in Ukraine and the Middle East, the future of warfare is physical AI, right?
Robots and drones. And I think irrespective of the scale that robotics is ultimately going to be and certainly the commercial business will be bigger than than, you know, the defense needs.
But just from a defense standpoint, this is this is a really important supply chain that we must have. We there's we can't be funding cutting edge drone and robotics companies and then say, OK, but we're going to buy those magnets from China.
Do we have talent capacity or do we have a talent shortage?
Secretary Burgum gave me a stat which was pretty shocking to me that we only graduate 200 people a year in the United States in mining, which is orders of magnitude different than China.
What do we need to do to be competitive to build the industry here?
It's a great question.
Jason, I think about this question a lot.
Dave. Oh my god, Dave. No, no, it's all good.
I'm a huge fan of the pod and I just embarrass myself.
It's all the time. it's it's it's the old joke in white and you know i'm a fan of the pot since day one and i've totally embarrassed myself there's only one correction i'll make i know am i messing with you was this intentional um so huge fan of the pot yeah huge fan of the pot who are you gonna take a selfie later and i'm not the ais are go ahead so we have we have uh 850 employees today at mp we're going to hire, when we include what we're building out for Apple, coupled with what we're going to build with DoD, we're going to need a couple thousand more people easily, not to mention the construction jobs.
So this is a key existential question for all of us as we build out this, is where are we going to get the talent?
I think what we have found at Mountain Pass, crafts and we hire it all electricians maintenance you know operators is you get people in you train them and then obviously you give people a career and so we we've been training a lot of people and it's a little bit more painstaking but there's there's absolutely talent out there people are hungry to do it why do you think it's been so hard to establish that that idea like meaning you find it straightforward to find good hard -working people to get into these jobs But the thought is always that, wow, these jobs are not desirable.
But they really are desirable by many people.
Yeah, absolutely. I mean, our median wage is now pushing $100 ,000 a year.
And there's – relative to some of the opportunities that – these are great.
These are great jobs.
What are the starting salaries?
What's that? What's the starting salary?
It really depends on the job function.
Lowest starting salary.
I mean, I think the easiest way to think about it is you can certainly, as an operator, make close to $100 ,000 a year with us.
Because, by the way, everybody's an owner.
We have an owner -operator culture.
Everyone got stock when we went public in 2020.
But somebody coming out of high school, they can make $40 ,000, $50 ,000, $60 ,000?
Yeah. It depends. We can't find enough electricians.
We can't find enough maintenance workers.
A maintenance worker can, an electrician, they can make six figures today.
Tell us, you said earlier that you suspect five years from now we're going to look back, and this deal with the DOD was a blueprint.
Yeah. Give us other areas of either physical AI or software AI or other markets where you think these public -private partnerships are really necessary to embellish U .S. supremacy.
Yeah. There are some major categories, obviously.
We've all heard about shipbuilding and advanced pharmaceutical ingredients.
I mean, I think those are important ones.
And then there are a number of sort of niche areas like industrial diamonds that are important for quantum computing and some of these things that you never would've thought of.
It's a vertical where there might not be a market large enough to need five players, but a good public private partnership can just solve that problem.
And then there's some other verticals and critical minerals.
Was it straightforward for you to find the right person within the Trump administration administration that said, of course, this is obvious, let's sit down and hash this out?
Well, and I think that's, you know, our particular deal was led by DOD.
And so I have to say that the Pentagon leadership is extraordinary.
And, you know, this was a mandate, though, directly from the president to solve this problem.
And so again, they deserve a lot of credit for being, you know, bold here.
And to be clear, because, you know, this story's not out there, our process, this was, because I've never worked so hard in my life.
I mean, this was, this was like a true aggressive private equity style investment and negotiation.
The transaction documents are public.
You can look at that.
So, yeah, that's, they're tough.
Yeah, they are. This was, this was as tough as it gets tougher than, you know, think of any, you know, blue chip private equity or, or distressed lender type negotiation.
That's what this was.
And the key thing was they were going to hold our feet to the fire to execute on an aggressive timeline.
They were going to hold our feet to the fire on the costs.
And so we're exposed.
If we get the costs wrong, we're making this investment.
And so the key piece of this, which I think is a good model for all of us and is actually will be really effective, is the goal, I don't speak for them, ask them, but I think their goal was, we're going to take the things off the table that you can't control, mercantilism, you know, certain customer issues.
We're going to be held to account for the things that we can control, our ability to execute, our ability to execute on a good timeline, and our ability to control costs.
So when we think about a lot of these historically, the government sort of investing in a sector and quote, picking a winner, usually there's sort of money given to someone and it's sort of public risk private upside right this is not that this is private risk public risk public upside private upside it's a true shared win -win -win and again like i said hold me to these words i i hope uh i hope i'm right on this but i think the uh to the credit to the trump administration i think they will make money on this and have solved the national We appreciate you coming, Steve.
Thanks so much. Thanks, brother.
All right, take care, Steve.
Thanks. Thanks, Jacob.
Hi, Lisa. Hi, Lisa.
It's a pleasure to meet you.
Hi, hi, hi. Well, thanks so much for being here with us today.
We don't have a lot of time.
So we want to get into it.
In April, it was announced that you achieved your first silicon output at the TSMC facility in Arizona on that two nanometer line.
this administration and the private sector have talked a lot about on -shoring semiconductor manufacturing would love your thoughts of the on the ground experience in arizona how's it going what's not going well what does america need to do to get this right well absolutely first of all it's a pleasure to be here um love the theme i think we're all super excited about winning the u .s. um ai race and i thought if we're going to talk about chips david i should actually bring one.
Oh, awesome. That's okay.
A little bit of show and tell.
So this is our latest generation AI chip.
It's our MI355 chip, 185 billion transistors, takes about nine months to build, lots of technology on it.
That's a two nanometer?
This is three nanometer and six nanometer, so lots of different chiplets.
I'll be putting this on eBay later.
I'm going to take it with me when I leave. How's that?
Thank you. But look, to answer your question, I think, look, these ai chips are extremely extremely complex they have so much technology on it we're super excited about the progress in us manufacturing i would say you know 12 months ago people weren't sure that we could do leading edge manufacturing in the united states we've been very early in arizona with tsmc and we did get our first chips out they're actually four nanometer but But what we see from it is where there's a will, there's a way.
And I think all of the conversation about on -shoring manufacturing has been super good for the semiconductor industry.
And frankly, for all of us in semiconductors, we're in such an interesting place because chips are so essential to ensuring that we are able to win the AI race that we want to make sure that there's a lot of geographic diversity and capability there.
But the reports out were that TSMC couldn't get good, qualified, trained employees.
They had to bring folks over.
Is that accurate? And, again, if we're going to scale, what's the order of magnitude we're going from here?
Is it 10x, 100x? And how are we going to build a workforce to support this industry, which is a completely new industry for America?
And, Lisa, you have permission to speak freely.
The best way to say it is no matter when you start something new, it's going to take work.
It's going to be hard. So sure, in the beginning, there were some issues of, you know, the TSMC has like a formula for how they build and they just, you know, rinse and repeat.
And they've learned how to do that well in Taiwan.
So they had to learn how to do it well in the United States.
But I have to tell you, we've been super impressed with the progress.
And, you know, if we look at the main thing that we look at is, you know, yields and just how many chips do we get out on a given wafer.
And I would say it's equivalent between what we get in Taiwan and what we get in in Arizona.
It's unrealistic to think the United States could compete on cost. Am I correct?
We're going to pay a little bit more.
Give us the ballpark.
50 % more? Not 50 % more.
I mean, look, it's going to be more than 5%, but let's call it less than 20%.
So let's say low double digits.
And how does that impact the business, if at all, in terms of competition globally?
Well, I think the important thing is, I mean, just think about, like, everybody wants a GPU, right?
Like, if you look across the industry, you really say, you know, the people who are going to win in AI want to have as much compute in their foundation as possible.
And they want assurance of supply.
We want to be able to supply this no matter what happens.
And so if you put that in context, you know, the fact that you're not going for the lowest cost, you know, every minute of the day is okay.
It's okay. OK, like obviously we're not going to build not everything needs to be in the most advanced technologies.
And so we have a very geographically diverse supply chain.
You know, I think Taiwan continues to be important in that view.
But the the focus from this administration on getting on for manufacturing in a big way, not in a small way, I think is is very good.
how much time do we have if there was a disruption for whatever reason we can come up with hypotheticals in taiwan and we were unable to get chips from those factories what would that look like globally yeah you have to look across the supply chain but you know from a structure standpoint we all want to keep reserves for you know those those times but it's months it's not we said there was uh two really interesting posts over the last couple of days one was from from Elon where he said in five years he projected 50 million H -100 equivalents just for XAI.
And the second was Sam Altman.
They signed a deal for a four, I think, gigawatt data center, 30 billion a year with Oracle.
That just portends an enormous amount of chips that are necessary and power.
And if you forecast that, how do we actually meet all of that?
What needs to happen that's not happening today inside of the United States to actually do that?
Yeah, it's a great, great point.
I mean, that's what we're seeing.
We're seeing this incredibly large demand for AI, and they're coming from, you know, Sam and Elon are certainly the leaders, a couple of the leaders.
There's a lot of demand elsewhere, too.
I mean, if you think about it, nations want their own AI.
So there's very high demand.
man, we're imagining that just the accelerator market, so the chips for these, you know, AI, large computing systems will be like, you know, over $500 billion in a couple of years, so very high growth.
And when you say, you know, what do we need to do?
It's the entire ecosystem needs to scale up.
So we need to scale up.
Certainly what we're doing in chip design is trying to get chips out as fast as possible.
But we're also scaling up the entire manufacturing ecosystem.
system and you know as I said I don't I think the US is gonna be a huge piece of it so it's not just about the silicon there's all of the various other pieces of the ecosystem that have to come to the US and and I think looked I think today's AI action plan is actually a really you know excellent blueprint and how do you see the market evolving in these next five or six years is it there's a standard set of chips for training a standard set for inference or do you just see an explosion like a Cambrian explosion of different basics basics, different designs, different use cases?
Yeah. I like that question because I am a believer in there will be diversity of chips.
The reason is there are so many use cases.
If you think about use cases from whether you're talking about science or manufacturing or design or back -end or frankly personal AI, I think we're going to see AI in everything that we do, certainly in your phones, in your PCs.
You have all these pieces.
You're going to have different types of chips that do that.
But, you know, certainly for the largest systems, we tend to believe that, you know, you need the most compute you can get.
And so, you know, GPUs are there, but lots of ASICs are in the process.
And, you know, we'll see a variety of different chips.
You opened up a really interesting line of questioning there.
When mainframes were so expensive and then eventually wound up having PCs that were more expensive on their desktop, you alluded to AI being run locally.
Yes. When would we have a local computer, a laptop, a desktop computer that would have the power we're seeing to run some of these LLM models in your mind?
And do you see that as a specific market to go after?
Look, I definitely see the idea that AI will be at every part of our ecosystem is a real thing.
I think that's one of the advantages.
If you think about the power of AI, you want it everywhere.
And you want it across all different applications.
And I think when you think about PCs today, we're putting significant amount of AI in them to run local models.
And why would you want that?
It's like, well, maybe I don't want all my personal data all over the place.
On that point, can you make a prediction on when the market for physical AI chips is greater than the market for chips and data centers?
That's a great question.
I'm a big believer in physical AI.
I still think it's, let's call it five years.
You think five years?
Is that fast? fast?
At least five years.
So you're saying five plus?
Five plus, yes. Okay.
But that is ultimately the biggest end market, do you think?
Do you think physical AI becomes the biggest end market?
I think it becomes a significant end market.
I think you look at chips in data centers and you look at chips at the edge, they're also significant markets.
When you look at the most cutting edge techniques today, EV lithography, all of this whole stuff to make chips, One of the things that's observable is we're only as good as what humans have been able to invent.
And I often asked the recursive question, what happens when the AI is able to invent its own method of manufacturing?
Different materials, different material sciences, different approaches that we may not necessarily understand.
Is any of that R &D happening, whether at AMD or in other places?
How are we trying to get beyond the physical limits of electrons shunting across a junction?
I think this idea that the AI can be extremely smart and extremely capable like we think about how AI can design the future chips.
And it will design pieces of it, but there's still a creativity of bringing it all together that I think humans are still absolutely at the center of that.
So I don't necessarily see the AI designing our next generation GPU, but I do do see it helping us design the next generation GPU much faster and more reliably.
You talked about the need to, like, re -shore more parts of the ecosystem, obviously you guys have a world -class chip design, the fabs are getting re -shored, but how do you think about things like lithography, like, does that need to be re -shored, or like, does ASML need to start building machines in the United States, or is it okay to have that type of supply chain risk on an ally?
Look, I think we're going to, we have to accept the fact that it's a global supply chain.
Like even if you were to reshore, you know, X number of components, you would still have Y components that are across the world.
I think it's important for us to have our allies together.
So that's a key piece of the conversation and ensuring that, you know, we have access to the latest generation technologies and that that is, you know, something that we protect given our intellectual property.
And going, going to first principles and asking you the open ended question what should be done about American American education.
I'm going to ask this a lot today.
Assume there's no college, high school, nothing.
You arrive in America, the situation is what it is today.
What do you do? How do you build an education system to prepare the next generation for the evolving workforce?
Yeah, I'm probably a little bit biased, as maybe some of your guests are today.
I'm a big believer in science and technology background as being, you know, sort of the STEM background is, you know, so helpful when we think about the future workforce and the earlier we can get into the um you know sort of the process i think the better so some of the work that's being done to kind of revitalize the uh curriculum i think is is pretty important in the um sort of the next generation workforce and one of the things when i think about you know how we win in ai like there there's so many aspects of it but ensuring that you know america is the best place for ai talent is also you
know a key piece of that.
So kind of inspiring people when they're young to really, you know, study, you know, science.
So when you go to bed at night, and you think about the best case scenario for this technology and this trajectory on which is accelerating, and you're enabling, what could the world look like in 10 years, we let's say, pretty obvious, we're hitting artificial general intelligence at this moment, I think we'd all agree, we're starting to see that.
But super intelligence Can't be far behind that.
I assume you agree with that Soon we hit that super intelligence.
What would the world look like in 10 years in the most optimistic scenario if we do this, right?
Well, I think the exciting part about it and you know, I can say this very sincerely.
I mean, this is the most transformational technology sort of in our lifetimes I mean That's the way we should think about orders of magnitude orders of magnitude and the reason is it's not just going after one aspect, right?
You can actually take AI and make science better.
You can take AI and make medicine better.
You could take AI and make manufacturing better.
You can take AI and make every aspect of your business better.
And so, you know, in my mind, 10 years from now, we'd like to believe that we are really leveraging it to solve some of the world's most important problems. I like to say, like, you know, AMDers get up in the morning and they say, you know, how can I use technology to solve some of the most important challenges in the world.
And AI is really our mechanism for doing that.
I have a business strategy question.
If we went back 20 years and we wrote the tale of three companies, NVIDIA, AMD, Intel, and then you fast forwarded 20 years, two have just absolutely thrived and one has not.
And if you had made the bet back then, it would have been very inconclusive that you would have picked nvidia and amd and if anything there is a an amount of inherent belief that intel had just figured it all out can you just tell us sort of like the lessons learned of why you thrive and maybe what you take away from their journey that you make sure amd doesn't play out well you know as a ceo we have to be paranoid every single day, right, so we don't rely on the past, but I think there are lessons of the past, and I think probably the most important lesson that I can say for technology is you
have to shoot ahead of the duck.
Like, you have to be thinking, what is the most, like, your question, Jason, great question, we think about that all the time.
How do we shoot ahead of the duck, and, you know, you have things that change, you know, technology is a beautiful place because you see big inflection points.
Five years ago, AI was around, but we wouldn't be able to gather this audience to talk about AI because people would be like, who cares?
But the fact is you had to invest many, many years ago to be where we are today.
And I think I like to say that you will be able to judge whether we've done a good job or not by how we perform five years from now.
The decisions we're making will take five plus years to play out.
But that's the key thing in tech. Nothing is fast, but hopefully it's quite lasting and what is happening in countries not in the United States like what do you think is happening in chip design and all of these back capabilities in China and other places right now we should believe that it's super super competitive I mean at the end of the day I think the world has recognized that that semiconductors and chips are essential they're essential to national economies they're essential to national security and so assume that everyone's investing.
I'd like to believe that we have a great head start because of the innovation pipeline, because of the great companies that we have here, but we should not be confused that everybody's investing and we need to keep up our investments as well.
I think that's why this whole idea of any one company can provide every solution that's necessary just isn't the case.
Right. I I love the idea of open ecosystems of companies collaborating, of collaboration across the ecosystem.
So hardware, software systems, collaboration across public private partnerships, because that's what it's going to take.
Like for us to win, we have to be front facing and realizing that bringing the countries that win, bring all of the smartest people and the best capabilities together and let let them go as fast as they possibly can.
Really. Thank you for being with us.
Wonderful. Thank you.
Great. Appreciate it.
Thank you. Thank you.
Pleasure to meet you.
I'm Chase Lockmiller, the co -founder and CEO of Crusoe, and I'm here to talk to you about the AI Industrial Revolution.
I'm going to start with a quote, and it's from Warren Buffett in his 2020 shareholder letter to investors.
And he said, in its brief 232 years of existence, there has been no incubator for unleashing human potential like America.
Despite some severe interruptions, our country's economic progress has been breathtaking.
Our unwavering conclusion, never bet against America.
Buffett's words were true then.
And as we enter this global race for technological dominance of artificial intelligence, they ring even truer today.
American dynamism has always prevailed and it will continue to do so.
So in sort of the history of really what's made America great is, you know, we live in a nation that's the freest nation in the world.
And we are just as rich in land and resources as we are in human ambition to drive progress.
And one of the things that's fundamentally enabled that progress to happen and that ambition to be unleashed is the leading investments that we've made in infrastructure.
Over the course of his lifetime, Warren Buffett got to witness investments in power, in transportation, and in natural resources to enable people to go pursue their dreams and live a better life.
Now in 2025, we stand at the start of a new era of infrastructure.
the infrastructure of intelligence.
And it's driving the biggest capital investment in human history.
This investment's being led by the hyperscalers, who are investing hundreds of billions of dollars per year, per year, to make this happen.
These are the companies with the biggest balance sheets in the history of business that are quite literally going all in to make this happen.
And they're not the only ones.
You know, there's also startups like Cruso, and there's even nation -states that are following suit.
So what's going on there?
What's the prize that they're going after?
The opportunity here is that for the first time in human history we've actually been able to manufacture intelligence.
Intelligence is the scarcest economic resource in the history of the economy and for the first time we're actually able to make it.
And the opportunity here is to actually unlock access to what has historically been that scarce economic resource.
So this is why the data centers of the future are not being referred to as data centers.
They're actually being referred to as AI factories.
It's a factory that takes as inputs data and algorithms and chips and energy and it outputs intelligence.
This is the alchemy of intelligence.
so this newly manufactured intelligence will spawn a new chapter of unprecedented productivity and development and that will serve to improve human quality of life so the idc estimates that ai will generate 20 trillion dollars in economic impact by 2030 so even if you can earn a small slice of that that hundreds of billions of dollars of investment will earn an amazing return for each Each dollar invested into business related AI is expected to generate $4 .60.
As my friend Jensen would say, the more you buy, the more you save. Or in this case, the more you buy, the more you make.
And we can grow the pie together and usher in a new era of AI -driven abundance.
So when we look at the history of American energy production and consumption, as the the U .S. industrialized, we really ramped up energy generation and also consumption.
But if you look at this chart, you can see that it's kind of flatlined over the last 20 years, where we're generating and consuming about 4 ,000 terawatt hours per year.
AI is fundamentally transforming this demand picture, and energy is quickly becoming the bottleneck to growth.
Data centers are forecasted to account for 20 percent of the growth in power demand between now in 2030.
And data center total power consumption is going to go from two and a half percent of US power consumption to 10 percent.
So what this means is that the technology industry that sort of willing this infrastructure into existence fundamentally needs to bring its own power to support that growth, which means massive investments not just in data centers but also in the energy infrastructure to support them.
And this will require people, lots of people, to to build, operate, maintain, and run these large -scale energy investments.
So if we look at data centers by the numbers, I think it's important, as people are throwing around gigawatt -scale data centers, of looking at the amount of data center infrastructure that exists today.
Northern Virginia is the center of the world for data centers.
But at the end of 24, it was only 4 and 1 1 gigawatts.
Today, we have companies that are looking at building single 5 gigawatt facilities.
And if you look at this growth, we're building more than a Northern Virginia every single year in the forecasted future.
So if there's one thing that you're going to take away from this presentation, it's that we need new infrastructure, we need lots of it, and we need lots of people to build, operate, and maintain it.
This is what Crusoe is focused on solving.
Crusoe's in the business of activating energy for intelligence, of building, operating generating AI factories at scale from the steel to the silicon, from the electron to the token.
And if you look at our pipeline, we have about 40 gigawatts of capacity that spans all sorts of energy resources, from new energy technologies like small modular reactors to renewables and natural gas to power this innovative future.
So revisiting my formula here, I think we left off one critical component, which is the people.
AI infrastructure will be the largest job creation catalyst that we've ever seen.
So I think it's important to sort of look at what this looks like in practice.
For the last year, Crusoe's been building a large -scale AI factory in Abilene, Texas.
And speed is paramount.
Again, this event is winning the AI race.
In order to win a race, you really need speed.
speed. And Crusoe has really been focused on using modular components, on rapidly scaling investment in construction and infrastructure to support this.
And we've actually built a lot of different modular components in factories and brought them to site.
They're kind of like Lego blocks that sort of fit together to build one of these AI factories at rapid Rapid scale and speed.
So if you look at what this looks like today, this site will consume over 1 .2 gigawatts of power and 400 ,000 NVIDIA GPUs all in a single, coherent cluster.
So this will essentially be a gigawatt -scale computer to drive human progress forward. It's really amazing what you accomplish in a year.
You see just one year ago, this is what the site looked like, and this is what it looks like today.
So what does this mean from a jobs perspective?
We have 4 ,000 people working on site every day to make this facility happen.
And it's a bunch of different trades, electricians and plumbers and construction workers.
And it's required a lot of capital, too.
We raised $15 billion to basically put this facility and bring it into existence.
And it's also required manufacturing.
And a lot of the critical components have happened off -site in these controlled manufacturing environments.
But this isn't the only one.
This isn't a one of a kind.
We also are building AI infrastructure and AI factories across America.
This site in West Texas is going to be a gigawatt facility behind the meter with wind, with incremental gas and grid interconnection.
We did a partnership with Redwood Materials where we built the largest, we built the largest largest microgrid in the United States with 60 megawatt hours of batteries, end of life EV batteries, and 20 megawatts of solar to power an AI factory.
We have a partnership with GE Vernova and engine number one for four and a half gigawatts of new gas generation capacity to power future AI data centers.
And finally, we want to announce a new partnership that we're doing with Tallgrass Energy in Wyoming that will initially power 1 .3 gigawatts of total compute load alongside two gigawatts of power generation.
And ultimately, we feel like this can scale to 10 gigawatts of power.
So we're really thrilled to partner with Tallgrass.
So as a vertically integrated AI infrastructure company built here in America, we believe that AI factories will be the ultimate economic engine creating utility for society and new jobs for the economy.
This will usher in a massive new era of AI -driven prosperity for the United States.
And I want to leave you with, you know, my final quote from Warren Buffett that, in this AI race, never bet against America.
Thank you. So is this stuff real?
You guys started off as a sort of Bitcoin miner and now somehow all the hyperscalers are asking you to build non -stop data centers.
Why you guys? I think, again, it comes back to this being a race.
And one of the things that Crusoe's has been able to do better than anyone is execute at speed and scale.
And I know there's been some of the biggest constraints around water, energy, the land for this type of stuff.
Where have you seen, what parts of the country have you guys been able to actually do this?
Have you seen any of the local regulators start to step up to make this stuff easier for you?
We've been building quite a bit in Texas.
Abilene, Texas is this initial facility that's gotten a lot of coverage.
We just announced of announced another facility in Texas.
Wyoming's been a, you know, big area of investment for us, but, you know, there's a number of other states that we're sort of evaluating investing to build large -scale AI.
Is it only going to be the, like, you know, sort of more rural, you know, sort of red states, or do you think that, like, you know, Oregon, Washington, etc., will start to, you know, sort of get together and realize they've got cheap hydropower and, you know, cheap water, and we'll try and get you there?
You know, believe it or not, we're actually looking at something in California.
Wow. California. Gavin Newsom's going to bring you in.
I would imagine it's going to to take like 50 years with our regulation.
Yeah, maybe. We'll see.
And do you think that the sort of hyperscaler demand, obviously, we were just on with Lisa Hsu talking about the demand for chips over the next couple of years, that's obviously correlated to the demand with data centers.
Do you think that's actually going to play out the way that all the public markets are sort of projecting?
Or are we like in 1999 peak, everybody thinks that fiber is going to be deployed all over the world.
Turns out all those projections were totally off.
I think the important trend to watch is sort of the capital investment that's happening and the term over which that's happening, so I felt like meta backed off on it a little bit like did they like it for a little bit talk about they were gonna deploy like crazy and then pulled back although he's obviously spending a billion dollars on chief AI scientists now yeah I think you know that the investments they're making in people are actually rounding errors compared to the investments they're making an infrastructure and I think that's something to sort of appreciate in this moment in time like
people are betting their entire balance sheets these are the biggest you know and best balance sheets in the history of business and they're betting their their entire balance sheet on the future infrastructure that's going to power the modern economy.
And then, in data centers like Texas, what's the limiting factor?
Is it workforce to actually go build these things, is it materials, is it the cooling towers, is it the chips, is it the hyperscalers giving you the contracts?
What's the limiting reagent?
Labor is definitely a major constraint.
Like I said, we have about 4 ,000 people on -site every day.
We're going to have multiple sites that are operating with thousands of folks basically building this infrastructure.
So labor is definitely one of the big bottlenecks and we think it's really important for America to make these massive investments in the workforce to really build the infrastructure for the future.
And do you think that requires some real reskilling where it's like people from oil and gas or construction having to go into just totally net new fields?
Or is it something where you guys are actually able to pull on pre -existing talent pools pretty quickly?
Both. There's a lot of existing labor at that facility in Abilene.
We're actually pulling labor from all 50 states at this point, believe it or not.
Making it like a company town, importing people in.
Yeah. We have about 50 % of the people are from Texas, but we are importing a lot of labor to make the project happen.
Do you see the company starting to go more full stack beyond just the operations of the data centers?
Or how do you think about, like, you know, you started off with, you know, focus on, like, you know, sort of energy arbitrage.
Now, to data centers, where do you see yourselves going over time?
Yeah, Crusoe is a vertically integrated AI infrastructure business.
So, you know, data centers is a key component to that.
And, you know, I think one of the most important pieces to be building right now and one of the hardest things to do at speed.
But we also have, you know, this managed AI cloud services layer that enables innovators to build large -scale AI applications on the platform.
Makes sense. Well, yeah, Chase, thanks so much for, you know, sort of joining us.
us on stage and, um, yeah, thank you.
Appreciate the talk.
Yeah. Thanks, Don. Okay.
Everybody, we've got a real treat for you.
Jensen Wong is here.
Sit here. Sit here.
The hot seat. Thanks for coming.
Thank you. The number one podcast in the world.
We were saying the number one company in the world.
Wow. Thank you. You're a fan of the pod.
You listen to the pod.
This is Norman our host Yes, and there's Steve What's the story with the jacket?
You got one of those?
You have like six I have something like 50 or 60 of them You really?
Yeah Wow What is that, Tom Ford?
I think so This one is I think so Yeah, it's nice I like it I tried that on Thank you It was like way too much money Well you guys are all so fashionable Yeah, right Coming from you guys It actually means something Yeah Oh, yeah Oops Oh, look at you Look at you Hey, we've been talking a lot about opportunity.
You've talked. Shimon is like a model.
He is. He is. He's definitely in his head.
He's like. Is Tom Ford your favorite?
Who's your favorite?
My favorite is whatever my wife gets me.
Ah, she dresses you.
As soon as she gets it for me, it's my favorite.
Yes, same with me. Smart man.
Nobody wears a suit better than Jacob.
Good God. Jacob is a handsome man.
Just trying to keep up with you guys.
I have two questions for you.
Take them in whichever order you like.
We've been talking a lot about job displacement, opportunity, short -term, long -term.
Obviously, you get to see everybody applying the technology because, hey, listen, you've got the best product in town to build on.
Therefore, everybody explains to you their hopes, their dreams, so you have a unique way of looking at the playing field.
You have complete information that we don't have. So I want to know what you think.
Don't worry, we'll fix it.
What you think about job creation, transfer, displacement, etc. And then the second one, I've just always been curious.
You've got all these important people knocking on your door.
You've got Zuck, you've got E, you've got Sam Altman.
He seems like he's a little bit of a headache, I'll be honest. He's great.
He's great, I'm joking.
I'm joking. I'm joking.
How do you allocate the H100s and whatever else you're selling them and still have them all like you?
Because they must ask sometimes, hey, can I get extra?
I'll pay you extra.
So just the allocation of a finite amount of resources and then jobs.
First of all, I wrote off $5 billion worth of hoppers.
If anybody would like to have some some extras, you know, just give me a call.
Jobs. We use AI across the whole company.
Every single software engineer today uses AI, not one left behind.
100 % of our chip designers use AI.
We are busier than ever.
And the reason for that is because we have so many ideas that we want to go pursue.
AI makes it possible for us to go pursue those ideas now that we're not doing the mundane stuff.
And so, I think the first idea is the more productive you are as a company, so long as you have more ideas, you could pursue those ideas.
You'll go after those ideas.
And I think that AI, in my case, is creating jobs.
It causes us to be able to create things that other people would, customers would like to buy.
It drives more growth.
It drives more jobs.
You know, all that goes together.
The other thing to remember is that AI is the the greatest technology equalizer of all time.
Okay, explain. Everybody's a programmer now.
Yes. You used to have to know C and then C++ and Python. You know, in the future, everybody can program a computer, right?
You just have to get up.
And if you don't know how to program a computer, you don't even know how to program an AI, just go up to the AI and say, how do I program an AI?
And the AI explains to you exactly how to program the AI.
Even when you're not sure exactly how to ask a question, say, what's the best way to ask the question, and it'll actually write the question for you.
it's incredible and so it's a great equalizer everybody is going to be augmented by ai everybody's an artist now everybody's an author now everybody's a programmer now that is all true and so we know that ai is a great equalizer we also know that it's not likely that although everybody's job will be different as a result of ai everybody's jobs will be different some jobs will be obsolete but many jobs will be created the one thing that we know for certain is that if you're not using AI you're gonna lose your job to somebody who uses AI that I think we know for certain yeah there's not a software programmer
in the future who is gonna be able to hold their own I mean you know typing by themselves yeah you can raw dog it no no not anymore more.
Not anymore. You can't raw dog it.
I'd be sure to go home and tell people.
Yeah, exactly. You're not going to raw dog this.
Yeah. Get your co -pilot on.
Now, what about the allocation of all the.
Okay. So the way we allocate is this.
The way we allocate is this.
Place a PO. Okay. So you go to the register.
You pay your order.
First, you know, first in the old days with with Hopper it happened so fast it wasn't possible to keep up with the demand but now we we this we disclose our roadmap to all of our partners a year in advance gives everybody a chance to plan with us they decide how much power and how much data center space and how much capex they want to allocate we plan together we work on transitions it's really quite orally these days what's the lifespan now you you know I was looking into how they're They're amateurizing these units four or five years.
What happens to this massive build -out in your six, seven, and eight?
What will be the use of those computers if you keep building such great products that replace them at two, three, four times?
What do we do with all that?
Concepts are happening right now.
The first thing is every generation we increase the performance by X factors.
factors, if the perf per watt goes up by X factors, whatever your data center power is, we just increased your revenues by X factors.
Right. So, perf per watt is equal to revenues.
Perf per dollar equals the cost. And so when we increase your perf per dollar by X factors, we reduce your cost by X factors.
Does that make sense?
Yeah. That's the first idea.
And so every single—the reason why we're moving so fast is we're trying to increase everybody's revenues we're trying to decrease everybody's cost so that we have the benefit of driving AI cost down as far as possible so that we can have thinking AI it's not that we're trying to make you know AI so that generates a thousand tokens and that's it in the future you're going to be generating millions of tokens and then generates it and answer as a result of that you've got to think a long time and so you got to get that cost down the second idea is is if you look at the residual value of Nvidia gear
right now, Hopper, for example, one year later, it's probably about 80%, 75 % to 80 % of the original value.
And then one year later is another 65%.
And then one year later, it's like 50%.
And right now, if you try to get Hoppers in the cloud, it's all sold out.
The reason for that is because CUDA is so programmable And we're constantly, the whole world, not just us, the whole world is doing open source development, improving its effectiveness.
And so what's amazing is the performance of Hopper increases over time because we're improving the software stack.
Hopper improved in performance by us and others by a factor of four in the time that we shipped it.
Now, you can't get that out of a CPU.
you right jensen can you explain to us um elon's tweet and the impact to you to your industry he said we're gonna have 50 million h100 equivalents by in five years from now and everybody started to feverishly do the math because if he has 50 million h100 equivalents then open ai will have that much or more meta will have that much or more google etc etc etc can you just explain to to us laymen what that means, what he just said, and how it impacts your business?
One of the biggest observations about AI is that there's the industry of applications that AI has created.
It's a revolutionary technology.
Every industry will be revolutionized, new applications will be created, so on and so forth.
All the things that we know.
Agentic AI, reasoning AI, robotics AI, so on and so forth we know all those things now every industry healthcare education transportation you name manufacturing all revolutionized the one part that that that we observed and and made a great contribution to is that in order to sustain those applications you need factories of ai you have to produce ai unlike unlike software you write the software and that's it In the case of AI, you have to continuously produce it, generate the tokens.
In a lot of the same ways that energy production was a large part of the economy a couple, two, three hundred years ago, I think it actually peaked out at 30 percent.
There's a whole, there's going to be a whole industry of just producing tokens.
And this is going to be the new infrastructure, just as we have the energy production infrastructure.
We have the internet infrastructure and we got to build out that plumbing.
And now we have to build out the AI infrastructure.
My sense is that we're probably a couple of hundred billion dollars, maybe a few hundred billion dollars into a multi -trillion dollar infrastructure build out.
Per year. Yeah. What about manufacturing?
And the reason for that is because you want the new infrastructure, which increases revenue, driving your costs down.
Right. That's right.
What about manufacturing in the US?
So where are we? We've seen stories of TSMC in Arizona.
We asked this question earlier about how it's going.
Is the U .S. equipped?
What is it going to take for us to get there, to have onshore fabs?
First of all, you guys know you're talking about the United States.
I know that there's lots of concerns, and everybody's worried about competition and things like that.
But we are talking about America here.
This is unquestionably the most technology -rich country in the world.
And this is the most innovative country in the world.
And the computer industry that I have the honor to serve is the single greatest industry our country has ever produced.
I think we can acknowledge that.
The level of leadership of the computer industry, the technology industry, is just unimaginable worldwide.
And so this is our national treasure.
This is one of our country's assets.
We have to make sure that we continue to advance it.
Onshoring. Next generation manufacturing is going to be insanely technology driven.
Robotics technology, AI technology.
You're going to have factories that are going to be orchestrated by AI, orchestrating a whole bunch of robots that are AI, building products that are effectively AIs.
Right, so you're going to have layers of inception and the amount of technology necessary to create that is really insane.
I love President Trump's vision, bold vision of re -industrializing the United States.
That entire band of industry that's missing, we outsource too much of it, frankly.
We don't need to insource all of it, but we ought to bring onshore the most advanced, advanced the most economy sustaining driving national security enhancing parts of the industry you know people always degrade down to tennis shoes we don't have to go there we just manufacture chips and ai supercomputers in arizona and texas we will in the next four years probably produce about half a trillion dollars worth of ai supercomputers that half a trillion dollars with ai supercomputers will probably drive a few trillion dollars worth of ai industry And so that's only in the next several years.
And they're doing great.
Arizona is doing great.
And so there's a lot of talk about American competitiveness today.
And the White House ruled out its AI action plan.
And Nvidia is making very big bets on the United States.
And so as a CEO of a global company, what do you see are America's unique advantages that other countries don't have?
America's unique advantage that no country possibly have is President Trump and let me explain why one on the first day of his administration he realized the importance of AI and he realized the importance of energy for the last I don't know how many years energy Energy production was vilified, if you guys remember.
Yeah. We can't create new industries without energy.
You can't reshore manufacturing without energy.
You can't sustain a brand -new industry like artificial intelligence without energy.
If we decide as a country the only thing we want is IP, to be an IP -only, a services -only country, then we don't need much energy.
but if we want to produce things something as vital as artificial intelligence and we need energy and so I'm just delighted to see pro to accelerate AI innovation to accelerate the growth of energy so that we can sustain this this new industry and you know go after the the new Industrial Revolution big big deal can can you talk about physical AI versus data center AI We talked a little bit about this today.
Is there a threshold where you see physical AI accelerating and ultimately the deployment of chips outpaces the deployment of chips in data centers?
Is that where the world evolves to?
Or what do you think construction of the world looks like?
CHRIS CARTLAND - Excellent.
Everything in the world that moves will be autonomous some day.
And that some day is probably around the corner.
So everything that moves.
We already know that who's going to be pushing a lawnmower around?
That's craziness. Unless you want to.
And so I think everything that moves will be autonomous.
And every machine, every company that builds machines will have two factories.
There's the machine factory, for example, cars.
And then there's the AI factory to create the AI for the cars.
And so maybe you're a machine factory to build human or robots.
You need an AI factory to build a brain for the human or robot.
And so every company in the future, in fact, the future of industry is really two factories.
Tesla already has two factories.
Elon has a giant AI factory.
He was very early in recognizing that he needs to have an AI factory to sustain the cars that he has.
Now he's got AIs in the car, but in the future, instead of, you know, I imagine that in the future, instead of a whole lot of people remotely monitoring air traffic control, it'll be a giant AI that's doing the remote control, and then only in the case of the giant AI can handle it with a person come in to intercept.
And so I think you see that these industries in the future, every industrial company will be an AI company, or you're not going to be an industrial company.
There was a couple of moments throughout the course of this year where people almost threw in the towel and said, oh, we lost to China, right?
there was the deep -seek moment, then maybe this week, last week, there was this Kimmy model moment.
But then it kind of fizzled out.
Can you just explain to us how big of a threat they really are in terms of getting to supremacy, getting there first, whether it's AGI or superintelligence?
Yeah, excellent question.
The Chinese AI labs are the world's leading leading open model companies.
They offer the most advanced open models.
Open Source is fantastic.
If not for Open Source, we know startups won't exist. And to the extent that we believe that the future industry is going to be today's startups, they're going to need open source models.
And DeepSeq, when it came out, it was a great win for the United States.
It was an incredible win.
What people didn't – and two reasons.
First, imagine if Deepsea came out and it only ran on Huawei.
I just want us to pretend.
Use that thought experiment.
Totally. You've got two parallel universes.
Exactly. Could you imagine if QN came out and it only worked on non -American tech stack?
Could you imagine if Kimi came out and it only worked on non -American tech stack?
And these are the top three open models in the world today.
It has downloaded hundreds of millions of times.
so the fact of the matter is American tech stack all over the world being the world's standard is vital to the future of winning the AI race you can't do it any other way we've got to be you know as you know any computing platform wins because of developers yeah and half of the world's developers are in China so speaking of developers the second the second I'm sorry the second thing and really big deal when deep see came out we were thrilled for the second reason which is we now have a super efficient reasoning model and the reason for that is because the old models are one shot you give it a question everything
was memorized you know that pre -training is basically memorization and generalization through concepts post -training is teaching you how to think and so now with deep seek r1 Kimmy Kimmy k2q 1 3 you now have reasoning models that can allow to help you think and so the reason why I was so excited is if each pass of a thought is energy efficient then you can think for a long time yeah the last question from for me is that we see this capital being applied to human capital in a way that we never thought was possible used to be NBA players signing 300 million dollar contracts now it's you know model
model researchers. Then there was a post this weekend that said that there was a person that was offered a billion dollars over four years by meta.
Now if that's happening at this layer, why hasn't it happened at your layer?
Because you are the enabler of all of that.
How do you think all of this human capital is going to actually play out?
First of all, I've created more billionaires on my management team than any CEO in the world.
They're doing just fine.
Okay, and so, and they're doing, don't feel sad for anybody at my layer.
Yeah, everybody's doing okay.
Yeah, my layer's doing just fine.
But the important, the big idea, though, is that you're highlighting, is that the impact of 150 or so AI researchers can probably create, with enough funding behind them, create an open AI.
150 people DeepSeek is 150 people Boonshot is 150 people and so the original OpenAI was about 150 people DeepMind, they're all about that size I think there's something about the elegance of small teams and that's not a small team that's a good sized team with the right infrastructure and so that kind of tells you something 150 people if you're willing to pay to pay, say, $20 billion, $30 billion to buy a startup with 150 AI researchers, why wouldn't you pay one?
Speaking of options...
By the way, somebody told me...
We need to wrap because...
I don't know, but I'm going to do this one question.
Somebody who was inside your organization told me with the options that you have a secret pool of options and that you will randomly just, if somebody does a great job, drop a bunch of RSUs on top of them and that you have this little bag of options you carry around and that you give them out.
Is that true? Yeah, I'm carrying it in my pocket right now.
So listen, so this is what happens.
I review everybody's compensation up to this day at the end of every cycle when they present it, and they send me everybody's recommended comp.
I go through the whole company.
I've got my methods of doing that, and I use machine learning.
I do all kinds of technology and I soar through all 42 ,000 employees and a hundred percent of the time I increase the company's Spend on OpEx and the reason for that is because you take care of people everything else take care takes all right Well done.
Thank you. Thank you, Justin.
It's great to see you.
We have an event in L .A.
We'd love to continue the conversation.
Yeah, so we'll say yeah the world's number one podcast
