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25:42Carol Massar:You know what we're all watching though right now? The energy sector. Yeah, we really are. The stock of nanonuclear energy is soaring today. Up close to 9 % year to date. You pointed this out a little earlier, Carol. Yeah, it's interesting to see kind of the move. Stock did soar. It was up, I think, around 9 % year to date here at the close. This is a$1.3 billion market cap nuclear energy company. It's working on those SMR small modular reactors that we talk so much about in that. So much enthusiasm around them. And yet there's still not one up and running. Right, Will Wade? Yeah, Will's shaking his head yes.

26:17Back with us, James Walker, CEO at Nano Nuclear Energy. Also joining us is Will Wade, Bloomberg News Energy reporter. Will joins us here in the Bloomberg Interactive Brokers Studio. James joins us out in LA. James, we check in with you every few months. I always ask the same question. How close are you to building and deploying something real here? Well, I would argue that objectively we're in the lead in the commercial micro reactor race. I think we're the only micro-reactor company that submitted a construction permit application to the NRC, which is the federal regulator. So if someone's going to be first to build a first-of-a-kind, full-scale, full-power reactor system, it'll be us.

26:55Well, let's talk about Antares. They had their big breakthrough last week. That's the criticality demonstration through the DOE's reactor pilot program. That feels like notable, no? It's notable, definitely. To get something critical is no small feat. But it's a different thing to take a reactor critical at a zero-power reactor and then build a full-scale, fully operational, net-power-producing reactor system that's commercially licensed. These are different challenges. One is for what we're shooting for. We have a commercial site. We don't need the DOE program to assist us. And we're gearing towards a commercial license where we can then go on to sell working systems that we could demonstrate at full scale.

27:38We've seen that the DOE program has almost a dozen companies working for that criticality. You're not part of that program, right? Can you talk a little bit about it? You're not. Yeah, absolutely. So actually, there's five companies that have submitted a construction, commercial companies that have submitted a construction permit application to the NRC, and none of those five were part of the DOE program. And the reason why is that us and the other four were just too advanced for that program. We already had our site. We already had our NRC engagement. And the benefits of the DOE program were not there for us.

28:12There was no funding for that program. We already had a site. And the DOE program does not give us a commercial license, whereas the NRC route does. So there's the DOE program. It's good to expedite development of concept reactor systems. If you're shooting for the commercialization of your systems, you still need to go that NRC route. And that's where me and, well, our company and the other four that have submitted that construction permit application are gearing towards. So different programs. And if you are sufficiently far along in terms of your commercial development, there weren't very many benefits of being part of this DOE program.

28:50I kind of wonder that too sometimes, because it goes through the DOE instead of the NRC. so that puts you on track to build a commercial plant when exactly can you give us some details there so yeah sure so actually we've already done all the geotechnical drilling on the site and we've submitted that that construction data we should get permission to start construction sometime in 2027 and once we get that data with that permission back we'll be we'll immediately start that construction process next year by about 2029 the reactor will be almost completely constructed And I would imagine 2030 will have a full-scale, fully power-operating reactor system, net output of power that's fully licensed and ready for commercial sale in 2030.

29:32Carol Massar:What if energy demand starts to decline? Will that make you pull back? Maybe it's a silly question, but I will think about it. No, no, no. It's a good question. Because I will say the Cerebris CEO and one of the, I believe, co-founders, Andrew Feldman, right, at Bloomberg Tech in San Francisco said there's plenty of power out there. That was his view. He says it's just not near where it needs to be. It's not easily accessible. So build the data centers next to those power sources. Perhaps, perhaps. That was his view. But I'm just wondering if for some reason, let's just go there, that we don't need as much power.

30:10Carol Massar:I mean, three years is a long time out, or three and a half years. A lot can happen between now and then. Could it slow the progress that you have laid out for us or that you plan? Well, I mean, he's part of the tech industry. And the tech industry has been making massive investments into nuclear for a reason. And the reason why, I mean, you've seen it from Microsoft, from Meta, from AWS, from Amazon, they're making those nuclear inroads. And they're not doing it because there's abundant power. They're doing it because there's a massive projected bottleneck of power. And the reason why is that to actually get the grid up to a point where we'll be able to outlay the projected amount of power the tech industry needs, you'd need to put something like $5 trillion into the grid infrastructure.

30:53Now, that's not their business. But if you have a nuclear power station that can be co-located and off-grid and put wherever you want advantageously, providing that baseload power, you've de-risked your industry. And then China doesn't catch up your AI industry. So there's one opinion against the massive weight of hundreds of millions, if not billions of dollars coming from tech industry. So I would follow the money.

31:18Carol Massar:The only thing I was saying, Will, you help me out here. I feel like I remember, I can't remember who I was talking to and just said, listen, a lot of the hyperscalers were making bets and deals with a lot of utilities and they were hedging their bets. And it wasn't necessarily all of those contracts or promises or agreements or conversations were going to pan out. They just wanted to make sure they had power. Yeah, there's been some talk that they're putting money here and they're putting money there and they're putting money in this thing over here. And they only need one of those to pay off, not necessarily all three.

31:46They just don't know which one is going to be.

31:48Carol Massar:Right. So I do wonder. So again, go ahead, James. Yeah. No, go ahead. I was just going to say, you know, you're right. Like the tech companies and other industries, they're energy agnostic. They don't care where it comes from. It could be a geothermal or hydro or whatever. The challenge that they face is an infrastructure one. And already there's quite a lot of backlash against data centers, rising utility bills, things like that. And the feedback we're getting is that they're increasingly looking at models where they want to be off grid so they're out of sight, out of mind. Now, if you want to do that and you want to have baseload power, you're stuck with nuclear unless you're going to build massive transmission lines and gas pipelines all around the country.

32:26They do have some, my understanding is some are powered by generators right now. Yes. But the issue is, if I say your generator, what's powering that generator? Is it diesel? Yeah, that's the problem. Are you going to be chucking it in? And also, they do still have a clean energy mandate. Now, they're producing a lot of carbon emissions. And what's the scale up going to be like? Are you going to need more generators? And also, the other thing, too, is that the amount of downtime that can be sustained by data center on an annual basis is like minutes, maybe less than that. And like, that means that you're going to need a constant output of power.

33:03If there's anything wrong with your generator, that's it. Like you've already missed your targets. The highest capacity factor of all energies is nuclear. And capacity factor is a measure of consistency of output. If you need that baseload power and you need that to be absolutely consistent as much as you can make it so, you're sort of stuck again with nuclear power, which is why they keep coming back to it.

33:24Carol Massar:Hey, James, just real quickly, a yes or no. Nano went public a few years ago. This is a Will Wade question, but I'm squeezing it in. Are we seeing so many IPOs now because these companies need money? Yes or no? Yes, I would say. It's a hot market. They're all chasing the cash. All right. Good stuff. James Walker, CEO at Nano Nuclear Energy, and of course, our own Will Wade, Bloomberg News Energy Reporter. This is Bloomberg. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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36:26You can customize it all, your logo, your message, your look, and many items come with no setup charge to help you save. And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget. Plus, you'll get expert help, fast turnaround times, and their 360-degree guarantee. So you can be 4imprint certain your order will arrive on time and look exactly right. Whatever your goal, 4imprint makes it easy to find your perfect promo match. Explore the possibilities today at 4imprint.com. 4imprint. 4certain. You're listening to the Bloomberg Business Week Daily Podcast.

37:05Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. Well, Carol, I said we're spending a lot of time talking about AI energy and data centers. So let's just kind of go through some of the guests we've had today. James Walker, we just spoke to him, CEO over at NanoNuclear. We talked about SMRs, small modular reactors in the coming years, possibly powering data centers. Corey Cantanga, the head of economics at LinkedIn, in our 2 p.m. hour, mentioned that construction of data centers is creating a lot of demand for certain jobs.

37:37And then Barry DiRamondo, the real estate developer, Steelwave, telling us in the 3 o 'clock hour that the downstream players, the startups that he says a lot of people haven't yet heard of, the ones who are using the tools powered by those data centers, that is where he's seeing the demand for his real estate.

37:53Carol Massar:It's like we had a plan today. Yeah, sometimes we do. We did. We're going to continue the theme right now with Catherine Thompson. She's founding partner and CEO at Thompson Research Group. It's an equity research and advisory firm that focuses on companies in the industrial and construction space as she joins us right here in our Bloomberg Interactive Broker Studio. Great to have you here. We actually had a fun conversation before we even got going. First of all, when it comes to construction and you look at the industrial spaces in a big way, what is going on that's interesting, especially to an investing audience?

38:24Carol Massar:Yeah. Here's, I think, the simplest way to look at this. the U.S. hasn't built in 40 years. We haven't built things within the U.S. And so that whole globalization trade is the pendulum is swinging. So essentially what this is, we are in the golden era of U.S. construction. Now, I think there's a lot of focus on data centers, rightly so, but it's not just data centers. But what else are we building? I mean, we talked to the CFO of Levi's, or former CFO at this point, maybe he's left. But he says, we're not going to make jeans here in the U.S. We're not ever making Levi's in the U.S. It just doesn't make sense.

39:02Carol Massar:But we are building, we were just talking about airports, so many airports across the U.S. When you actually are building the data centers, you have to address power. So with that power, you're addressing the power grid. You're addressing the roads that lead to power grids. Just putting this in perspective for the metadata center site in North Louisiana. The prep site alone is one mile by five mile. And it is the largest town is Monroe, Louisiana. You should just check out how big it is. It's not very big at all. And so it's bringing jobs. You have to have electrical, plumbing, power. And that just didn't exist before.

39:42Carol Massar:This is one of dozens upon dozens of communities where you're essentially creating cities that didn't even happen before. How temporary are those jobs? Once that data center is constructed, how many human beings are needed to actually run out? It's a great question. So today we just wrapped up a global industrial forum over at NASDAQ, and we were asking these very questions. And the great thing is we were talking to Turner Construction, and they're the ones building it. And let's use that Monroe, that North Louisiana site. That's going to take almost 10 years to really build out, soup to nuts.

40:17Carol Massar:on average, the consistent feedback that I'm getting from those that are building out, it's five years, seven years. Then you have the tail upon that where, yeah, not all of those workers will be there, but they're going to be shifting to another site that's going to take just as long. This could be decades long. But what does it mean in terms of the economy? I think about the energy rush in North Dakota and the Bakken, and they all just kind of laughed with all the fracking because they're like, we've seen these boom and bust cycles. And so workers come in from around the nation and their families stay where they kind of originally lived.

40:55Carol Massar:And people are afraid to build housing and everything is so slow to support those people because they're like, okay, they're not going to be here forever. It's not like you're building industries that will be here for decades, not just one decade. So I'm just wondering, Like, how do folks kind of manage that infrastructure industrial build around maybe the data center that ultimately isn't going to need all those people? That's a great point. But here's another way to think about it. You have that really big site that we're talking about in Louisiana. But you also have smaller data centers that are going to be.

41:29Carol Massar:And that's the other big trend that's happening. So I just toured a data center construction site just outside of Minneapolis. Big city. It was maybe 40 minutes away. What that does is it really supports you're going to be able to have jobs not just in the small communities, but in bigger tertiary cities. It will support those jobs. So it doesn't feel the same way as it did through the like the frack boom and the mid 2014, 2015. Are we just going to become a nation of data centers? Are we going to become a world of data centers? Not if local politics puts an end to some of them or stops them from even happening or breaking ground.

42:10Carol Massar:What's going to end up happening, it ends up getting regionalized. So there will be certain states that are fine and open to it. It also, you know, essentially, if you think about for every one text that you use, there's going to be three data centers backing out that in some way, shape or form. So it's either going to be in the U.S. or it's going to be abroad. And so from a national security standpoint, there is a lot of talk with the companies that we talk to about, like, we really need to have as much of it in the U.S. as possible. It's easier said than done, though. I mean, our producer Talia sending us like five articles, research notes about local pushback to data centers.

42:56Here's one, for example, from Bloomberg Government. Lawmakers are trying to get data centers to pay for their own power as they gear up to face voters squeezed by high energy bills in the November midterm elections. It's not a simple or a fast fix. Power-hungry data centers are springing up nationwide to support expanded AI capabilities. Wholesale electricity costs have increased up to 267 % in some areas located near significant data center activity from 2020 to 2025. We're paying the bill for some of these.

43:24Carol Massar:So you're spot on. there will be a policy push to create power and uh in many stations at data centers i mean that is coming it's not a matter of if it's it's more like when so and then it does is it it makes it so the data center has is generating the power paying for the power generation itself and it's separate from the grid that customers are using that's the idea yeah and taking a step further if the grid even outside of the data center is stretched it will provide uh energy to the community so there will it's no matter of if but it is kind of the data center i am to do that but it i mean this this is on the this is on the come because and it's coming in a lot of different angles and way and i know you know you were just talking about smrs yeah i mean that is going to be you know part of the solution uh you know for us we're trying to understand the what and the why and and you have you know really great questions with that but with power there will be generated at data plants i mean that is that is the focus is there a way to do it without smrs is there because those don't in here in the u.s don't exist now from a regulatory perspective they're still stuck in development um china has a couple the u.s doesn't how else could they power these locally it's a variety of different sources uh areas that have prevalent natural gas.

44:45Carol Massar:So that is why you are seeing more data centers in Louisiana and Texas. But it's just really access to energy. It's, I mean, really kind of bottom line. So you could put one by Niagara Falls, basically. I don't know if New York is going to allow that to happen, though. But that's the idea, is that it would be close to a place that generates a lot of electricity. Correct. Correct. Right. So from an investor's perspective, it's interesting how I feel like, yes, we talk a lot of high tech and AI and everything that's involved in that. But there's also kind of old investing strategies that are back in fashion.

45:24Carol Massar:And it's whether it's steel or building materials, like walk us through that in terms of maybe what investors need to be thinking a little bit more about. Yeah, I go back to the original theme that I said, there are just going to be more things It's built in the U.S. And the most basic material that is used in any construction, it could be a nuclear power plant, a data center, or that highway we talked about. Is it steel or concrete? It's crushed rock. Oh, crushed rock. Just rock. That was not what I'm making. Just seriously. Think Flintstones. So some great players in that would be Martin Marietta Materials.

46:03Carol Massar:Vulcan Materials is another one. um crh they'll do both rock and cement and concrete but then you have some smaller cap names too uh construction partners the ticker symbol is aptly named road and uh there's a new ipo out called suncrete rmix and they do concrete so it's you've got a lot of different options for basic materials that are all part of the backbone of the infrastructure how much of um is this of this is potentially being handled by huge private companies and not necessarily ones that are publicly traded. For the basic materials? Not just basic materials. I'm talking all this type of construction.

46:44Like Bechtel has a history in nuclear, for example. Correct. I think they worked on Vogel. I'm not quite positive. Well, as far in the U.S.,

46:54Carol Massar:if you want to look at private companies, if they've been around for a long time, it's a pretty good business. You would be shocked by the number of 100-plus-year-old crushed rock companies that are in the U.S. So there will be a lot of private companies. Oftentimes we're talking to like engineering and construction companies that are private family-owned companies that have been around for generations. Sometimes employee-owned companies. Yeah, absolutely. And in the construction side too and on the specialty side, a great example with that would be Mortensen. Family-owned, based out of Minnesota, and they are one of the top three builders of data centers in the U.S.

47:30Carol Massar:Catherine, why aren't these names up? I'm looking at CRH. It's down almost 19 % year to date. Martin Marietta, material's down about 11 % year to date. I'm just curious. Like what's happening? Yeah. If this is all going on in demand, let me just pull up road because I think that was down. So I can give you— Road is down about 2 % year to date. So the federal highway bill called IIJA is up for reauthorization in September. There is always a messy, stocks trade very poorly going into this multi-year highway bill reauthorization. So there's just a lot of negative, or not negative headlines, uncertainty around the funding.

48:19Carol Massar:Ironically, infrastructure funding right now has more visibility than I've had in my entire career. And it's really two-pronged approach. One, this is one of the few things that is not divisive from a political standpoint. Democrats want it. Republicans want it. So it's just a matter of getting the dollars out so you can get the dollars going. And then states have very strong DOT budgets, and it's as strong as it's been in 25, 30 years. Yeah, it's interesting. But it's optics. Okay. Yeah. Fascinating. Great stuff. Drop by again. Right. Thank you so much. Katherine Thompson, founding partner and CEO at Thompson Research Group right here in studio.

49:03Carol Massar:This is Bloomberg. This is the Bloomberg Businessweek Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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