How backlash and red tape continue to slow data centers post-Blue Wave

0:00This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed Sponsored Jobs. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs. Hello and welcome back to Equity TechCrunch's flagship podcast about the business of startups. I'm Rebecca Balan and this is the episode where we bring on industry experts to help us explore a trend in the tech world and dive deep.

0:41And today I've got senior climate reporter Tim Deschamps with me. Hey, Tim. Hey, Rebecca. How are you doing? Yeah, great. What's what are you focusing on lately? Well, Anthropic is back in the news and it's not just about their IPO this time. They're the latest AI lab to buy gigawatts worth of natural gas generators. So we should probably talk about how we're powering data centers. You're right. You know, it feels like every week someone announces a new power plant to run a data center, but there's a gap between what's announced and what actually gets built. And a lot of capital is riding on which side of the gap you're on.

1:14Last week's midterms put data centers front and center in politics. And the question is whether that gap gets wider. Well, fortunately, we've got someone this week who knows a lot about data centers and power. So to help us sort the real from the hypothetical, we're joined by Brent Nelson, the Senior Managing Director of Markets and Strategy at Ascend Analytics, where he forecasts long-term power markets for clients deciding which energy investments make sense.

1:42Brent, welcome to the show. I'm really excited to have you on because I have a lot of energy questions with all of the drama going on with data centers. So welcome and thank you for joining us. Appreciate it. Thank you for having me. So for our listeners who don't know you, You previously were a professor for 11 years. Two of those you spent at the Department of Energy working on R &D and commercialization strategy for energy efficiency and load flexibility. While you were a professor, you were teaching at Northern Arizona University, teaching mechanical engineering with a focus on energy systems, right?

2:12So you have been at Ascend Analytics, which is an energy and analytics consulting firm, since 2019. and the focus there, as your entire career shows, has been on energy market forecasting and modeling. Now, this is the perfect time to talk to you about this because last week on the show, we talked a lot about the results from the midterm elections and how everyone is kind of freaking out that the blue wave is going to impact data center development. And I'm kind of curious like what you're hearing from communities and policymakers about the backlash. Yeah, so I think, you know, it's more of a change on the margin than anything else.

2:53You know, one of the few bipartisan issues in the country today is backlash against data centers and issues around energy affordability. And so, you know, I don't know that it was necessarily a specifically blue issue to talk about data center moratoriums and, you know, trying to put an emphasis around the portability and water impacts and things like that. So, you know, we definitely saw Democratic governor candidates campaigning around, you know, moratoriums and stoppages and delays and that sort of thing. But I wouldn't say that that's a sea change from what would have happened otherwise. So when we think about what the impact is going to be at the end of the day, we think it's a change on the margin, most likely a little bit stiffer of a moratorium or a little bit longer of a moratorium than it may have been under, you know, Republican state leadership.

3:40But still, you know, we're looking at slowdowns regardless. We're looking at processes to figure out energy affordability regardless. You know, it's just a question of how firm and how long any delays are going to be in order to get those ducks in a row before development is allowed to continue again. Yeah. What kind of ripple effects do you think that'll have? Because, you know, a couple of months ago, the Wall Street Journal reported that total investment in data centers and related AI infrastructure is projected to hit$10 trillion between 2025 and 2032. And so that's a massive amount, but we know that a lot of this is based on debt.

4:18What kind of follow-on effects can we have for the economy if these data centers are not built in the timeframes in which they were expected to be? So I think we're still going to see them built. When I say slowdowns, I mean, I think it's on the order of one to maybe two years, right? So when you look at 2032, I don't think that the needle moves that much for 2032. It moves a lot more for 2027. That's just moratoriums, right? There's still the problem of like, can they actually get the energy? People I've talked to in the data center world say that really the biggest problem is like, there's all these sites, but they can't get power.

4:54Yeah. And so there's a lot of things that are going on in order to get power, right? So there are some folks that are looking at behind the meter solutions as a bridge until they get interconnected to the grid. There's programs that are built around grid curtailment or curtailable interconnections. There's some folks talking about completely islanded systems. I don't think you really hear that much about that anymore as the reality of how hard and difficult that is starts to set in for the folks that are kind of chasing after it. But kind of the talk of the last year has been where are we going to get the power?

5:24Can we get the power? But there's still a lot that's in flight. There's a lot that's in development. One of the things that I think is underappreciated is what's the political risk of some of the things that are in development. So if you have a project coming online in 2030 that's dependent on really big natural gas pipeline upgrades in order to serve a new combined cycle facility, what are the chances that a Democratic president in 2029 rips up that permit? I think non-zero today. So it doesn't mean that there's going to be a Democratic president in 2029, but if there is, your project should probably be robust enough to still be able to move forward under that scenario.

5:55I think there's a lot that's still in motion, a lot that's still on flight, a lot that's still happening. This really is just kind of a change on the margin in the near term, in my view. Now, Brent, one of the other questions I've had is how many of these things actually get built? You know, if you are familiar at all with the energy world, you see this happen a lot where projects get announced with the hopes of joining an interconnection queue or finding land and kind of banking that. And then in the end, some non-insignificant percentage get canceled. Is that the same kind of thing that's playing out in the data center world?

6:29Yeah, and we saw the same thing under the Biden administration, the clean energy development world, right? You know, you would hear kind of uninformed people say, look at all these projects that are lined up, ready to go. They were never lined up and ready to go. It was, you know, if you're a developer, there are a million reasons why your project can go bad. You could have a bad land deal. You could have a drainage problem. You get a community that just decides they don't like you for some reason or another. You could hit a snag in the project finance. You could hit a snag with your interconnection cost.

6:51I mean, there's so many different reasons that a project doesn't go forward. And so as a result, you pursue multiple. On top of that, there was also kind of a speculative world where people were developing and flipping and hoping to just kind of keep recycling capital. And so when we looked at the Q numbers for clean energy products under the Biden administration, it was always, you know, multiples on what was realistic in terms of what might actually get built. We see some of the same thing with data center development now. You know, there's some duplicative pursuits because you need to have a little bit of redundancy because you don't know what might happen for a project and why it might move forward and might not.

7:23But in addition to that, there is also a speculative mania of, you know, everybody trying to get in space and everybody trying to do it. And that's led to some inflated queues. And some of the numbers are just silly, right? If we look at Texas, Texas right now peaks at around 90 gigawatts. And there's something like that's the whole state. That's the whole state, more or less. I mean, it's ERCOT, which is the vast majority of the state, not exactly the whole state, but close. And the large load queue for ERCOT is like 400 gigawatts. right and you're not going to quintuple the size of the system in five years right that's just not even a realistic number you can't build 100 gigawatts of stuff a year there's not 100 gigawatts of high voltage equipment there's not 100 gigawatts of turbo it's like it's just you know these numbers aren't serious so whenever we look at any large load queue whenever we look at any large load forecast you have to be able to downgrade it based on kind of what you think is plausible it's hard to look at any specific project and say this one will go forward and this one won't But, you know, when you look at the aggregate, there's duplication, there's also speculation.

8:20And I think it's important to call out that both of those exist, both duplication and speculation. And either way, you know, what you can realistically build is a much smaller number than what we see in the large load queues. Like how much smaller are we talking here, right? Like we're seeing some seriously big numbers here. Like, are you saying it's like a third, you know, or a half? Like a tenth to a fifth, probably. Oh, my gosh. You know, and that's, but it depends, right? It depends on what number you're looking at. So some people are saying, let's look at the entire large load queue. Well, it's like an order of magnitude less than that.

8:53Some people are saying, let's take that large load queue and discount it down to what we think is realistic. Well, then it's maybe not a big discount off of that already discounted number. So we have to be careful about what we're talking about when we look at large load forecasts. You know, if you have someone that's already done to, you always take it down to what's real, then the way you think about that number is very different than if you're looking at the raw gross number. And so do you think developers are deliberately filing multiple projects to give themselves options? Or is this like a normal, is this just normal?

9:22Is this how it always goes? So a normal aspect of project development is you have to be pursuing multiple options, right? But if you ask any developer, they'll all tell you that every one of their products is great and they're all going to move forward. But that's what they say. The realistic, the real truth there is a little bit different. You know, they know that they have to have redundancy. They know that they have to have backups because, as I said, you never know what might make a project go belly up. So there's always some duplication. But as I said, in addition to that duplication, there's also a speculative mania right now where everyone's trying to get in on it.

9:52Everyone's trying to chase that data center money. And so, you know, there are people that used to do clean energy development that are now powered land developers, right? There are people that have never been in the space that now call themselves data center developers because they just happen to maybe have some land that there was a natural gas pipeline nearby. And they say, oh, well, you know, I'm a data center developer now. I've got this power plant site. So there is like this speculation, the speculative mania of people trying to move into the space. But that's in addition to the normal duplicative reality of doing project development in a high risk world.

10:22It seems kind of crazy because it's like they're taking out debt for this really big bet. It's like taking out a loan from the bank and then going to the casino. Well, when you take out debt, that's a different stage in development, right? So when you look at a large load queue, you know, there's a lot of projects that don't have any debt on them yet, right? They're just, you know, early stage projects. When you start taking out debt is when you start building. And the debt world is a little bit more nuanced. In general, if I want to get a loan, no one's going to give me a loan unless I can show that I have revenue to pay off the loan.

10:54And so how do I show revenue? Well, if I'm a data center developer creating like a cloud data center that could have any number of tenants that are going to be kind of using my compute, a bank's not going to give me a big loan unless I have a credit worthy tenant signed on a lease, right? That's how I show that I'm going to pay that loan back and that's what's necessary in order to get that loan to flow. Now, are those debt providers doing enough due diligence? That's an open question. But you can't just go get debt without having some securization on the other side. How much of some of the, I guess, posturing or maybe, you know, executive orders, moves by governors?

11:30So, for example, in Texas, Governor Abbott put together a call for an audit of large data center developers, kind of an effectively a bit of a moratorium, you know, kicking the can down the road for some of these projects. How much of that sort of policy or political action is going to kind of shake loose some of these developers that aren't very serious? I mean, the hope is that, you know, there are a variety of things that you can do to try to filter and separate the wheat from the chaff. Right. And anything that increases the costs will help you separate the two. So, you know, one of the things that's being done in a lot of places is you increase security deposits.

12:07So you have to put down more financial capital up front. that makes it harder for the fly-by-night operations to move. But it also does create some, you know, disadvantaged players and advantaged players. Like the bigger operators have an inherent advantage in that structure where you start to have capital requirements. But slowing things down also separates wheat from chaff, right? Time has a cost to it. So, you know, the people who are better able to weather slowdowns are the people who are typically better capitalized. So, you know, both of those things together will help separate things out.

12:37But really at the end of the day, hey, what separates things out is your ability to get a tenant, right? So whether a tenant is a partnership with like a hyperscaler, like a big tech company, or a tenant could be several lease agreements with a variety of potentially startups or something like that, you need a tenant of some form in order to make the money start to unlock. Is it hard to get tenants? The way you hear people talking about things these days is that AI companies and hyperscalers can't find nearly enough capacity. So it depends on who you're talking to and it depends on what timeframe you're talking about, right?

13:11So like, you know, if you're looking at a hyperscaler trying to get compute for 2027, yeah, they can't find enough capacity. When you start looking in the 2030 timeframe where you've got, you know, a hundred different data centers that are all competing, that's a little bit of a different scenario. The other thing that I would add, though, is that, you know, you have a lot of companies doing a lot of things in AI. It's not Unlike the dot-com bubble in 2000, 2001, right? You know, the internet obviously became a very big and important thing, but that doesn't mean that there was a lot of ideas that didn't come to fruition, right?

13:42And so a lot of companies went belly up. A lot of people lost a lot of money on those companies that went belly up. And there's no reason to think that we won't see something similar now, right? It doesn't mean that AI is not going to be a big thing. It doesn't mean that the compute isn't going to be needed. But who needs that compute might be very different five years from now than today, right? There's a lot of VC-backed startups doing a whole ton of different things in AI. How many of them are still going to be around in five years? Probably a much smaller number. And a lot of the ones that are doing good work are probably going to get snatched up by one of the big tech companies, hyperscalers anyway.

14:12And then at that point, you have a nice credit-worthy tenant on your lease. The deals that are most likely to go forward, the debt that's the most secure is the debt that's backed with leases that go to a big, well-capitalized tech company. But even those are, you know, you're seeing a lot of concessions in those deals, even if I believe there was one with CleanSpark, which is building a data center for Meta and Meta's leasing the data center. And even they had a hard time getting it across the line without giving a lot of concessions. Right. I think that there's a serious tightening in the debt market.

14:47Yeah. When I talk to folks in the debt market, though, they say they're usually pretty happy to finance data centers because they're so clean and easy. because they say, well, you know, I've got a nice... Clean and easy. Well, what do we mean by clean? Clean in a contract sense, not in an energy sense, right? So, you know, you have a hyperscale attendant. It's well secured. It's well collateralized. You know, they would much rather do that deal than, you know, a solar project that has FIAC exposure where you have to get tax equity investors and it's just a more complicated finance structure. So we've had bankers tell us they would far rather do a data center deal because it's clean and it's easy to paper.

15:28Okay. Well, speaking of clean and cleanliness, I want to hear about how the data centers are actually being powered, right? Because you're hearing that it's just like a scramble for different power sources. But from what I've heard, and maybe you can give me some insights into this, it's not that easy to power data centers using renewable energy unless somehow nuclear works out. It's actually like it's just not enough. And so everyone's kind of referring back to natural gas. A lot of companies and hyperscalers are trying to secure their own natural gas and like bring it with them in case communities say, no, you can't use our pipelines here or what have you.

16:04So what are you if you can give us like a lay of the land there. This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed Sponsored Jobs. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs. Yeah. So, you know, if you go back a couple of years, everybody, all the tech companies were talking about clean energy, clean energy, clean energy, and then the political wind shifted.

16:45And so they kind of stopped talking about clean energy, but they were still doing clean energy deals, right? If you pay attention to the news, you see off-take deals being announced all the time with those tech companies. They just, they don't necessarily shout it from the rooftops the way they were three years ago. So clean energy is still happening. But the problem that I think a lot of folks miss is that you can't really substitute like solar for gas. Those are not fungible energy sources. One is not the same as the other. And as we're moving into a world where outside of basically California in the desert southwest, most of the rest of the country is moving into winter reliability risks being the biggest problem.

17:21And the big challenge with winter reliability risks is they typically happen overnight and they're very flat. So, you know, think long duration, flat, high, elevated load. It's overnight means solar does nothing for you. It's typically associated with low wind, both because, you know, those cold conditions often are associated with low wind. But also on top of that, if you have a bunch of wind on the system, if the wind's blowing, you usually don't have a problem. Your problem by definition is when the wind is not blowing. And so what you're left with is resources that are available overnight during a long, flat peak.

17:55And that's also a struggle for storage because that long flat peak is not that well suited to storage where you pay more and more and more the more duration you get. Storage and solar pair really well for summer peaks. Summer peaks are afternoon when the sun's up and then a little bit kind of post sunset before bedtime. There's like a couple hour long peak. Storage does great for that. But when you move into the winter overnights, it's a much bigger challenge. And so that's why everybody's kind of defaulting to gas. and if you realize, okay, clean energy resources, like yeah, they're cheap, they're available, but they don't necessarily align with what you actually need.

18:31And so everyone's defaulting into gas. The argument that we've been trying to make for a while at Ascend is that gas isn't as good of a solution as people think for a whole bunch of different reasons. One is that you need to get the gas generation equipment, which itself is kind of supply constrained right now. On top of that, you need the fuel supply itself, which is non-trivial. You need pipelines, which is also non-trivial. and carries a political risk. You also need that fuel to get delivered during those critical winter storm conditions, which, you know, the reason that those are the biggest problems is that they're typically associated with disruptions in the gas supply system.

19:04And so, you know, if there's a disruption in the gas supply system and that's what's causing a problem on the grid, then what are the odds that you've still got gas supply at your site? Maybe not that great. And so, you know, the gas solution is not as good of a solution as people think it is. And on top of that, if winter reliability risks are the biggest problem for or the most constrained time on the grid, those don't actually happen that often. That's not like an every summer heat wave. That's like a once every three to five years where you have a winter storm burn or winter storm uri, you know, one of these big kind of gas fuel supply disrupting storms.

19:38And if they don't happen that often, then maybe a curtailable interconnection isn't that bad, especially if you pair it with some behind the meter storage. So my argument that I've been making to anybody that'll listen for a while is that a curtailable interconnection combined with battery storage is probably a pretty good solution and maybe not much worse than gas if it's worse at all. And it's clean and it may be cheaper and it may be faster, kind of all of the above. That doesn't mean that everybody agrees with me, but that's what we've been arguing. A curtailable what solution? Curtailable interconnection.

20:11Okay. So if you take an interconnection where you're grid powered most of the time. And then, you know, when that winter storm happens, that's going to, you know, cause an energy shortage on the grid, you get curtailed. But if you have storage that can cover most of that problem and that problem only comes up once every three, four or five years, maybe that's just not that big a deal. This is what we've been arguing. That doesn't mean that people have been listening. So people are still kind of chasing gas. Nukes are still a ways away, but, you know, gas is kind of the default that most people are looking at.

20:40We just say nukes, you mean nuclear power, not nuclear weapons. Sorry. Yes. Nuclear power. Nuclear power. It seems like the storm thing is a regional risk, though. Occasionally you get these very large ones that impact a big chunk of the United States, but it never covers the whole thing. So it seems to me that one answer might be better grid connections, that maybe that would help solve shifting some of the power around. I mean, maybe this requires us diving into kind of like a quick overview of how the grid works? I'll maybe give an answer first, and then if we want to dive deeper, we can. But there's sort of a magic wand solution, which is like, let's build giant power lines everywhere across the entire country so that you can pull power from California into New York City.

21:21Not necessarily realistic, right? Building new transmission is really hard. It's hard to cite. It's hard to, anytime you're going interstate, the regulatory approvals become incredibly complicated. So it's practically very difficult to get the level of broad transmission across the country that you would need to really solve that problem. Because typically when you have a winter storm, it's pretty big. And so to get transmission from elsewhere, you need some really, really long range transmission. I'll just, I'll leave it there. It's very, very difficult. If you could wave a magic wand, that would be one thing.

21:50But it would have to be really, really long range transmission. Does the new permitting bill, would that, if that were to pass, which it's still a long shot at this point, but if that were to pass, would that address any of these issues? Wait, Tim, describe the permitting bill for our readers. Yes, sorry. So there was a new permitting bill, the Bipartisan American Affordability and Jobs Act that just made it through the Senate, I believe. It wants to speed up permitting and approvals for things like new power plants, high voltage transmission lines, and it would also require data centers to pay a chunk of that cost if they're going to benefit from it.

22:22So it would give FERC, Backstop Siting Authority for Transmission. That would help, but it's still going to be hard. federal energy regulatory commission. What it does is, is a whole other conversation, but, um, basically the forecast permitting authority for pipelines, it doesn't have permitting authority for transmission right now at the moment. One of the things in this permitting reform bill is it would have more authority for transmission as a little bit of an oversimplification, but, um, it would help some, but it's still going to be difficult to do large interstate transmission. That also assumes that you can cite it well, cite it close to load.

22:57You know, there's a local load interconnection problem as well. So even if you have these big backbone transmission lines, there's still some local problems you have to solve. And people who have more expertise in power transmission could probably give you a deeper dive on that. But it's just not that simple. So I think it helps with the margins, but it's still a big challenge. I know that you guys have talked about this before, but what do you think about permitting reform? Why does that matter more than people actually realize? So it matters because, you know, we've seen what can happen when a presidential administration decides that they don't like a given type of energy.

23:32And I'm not referring only to the Trump administration, right? Like a lot of folks, particularly on the clean energy side, don't really want to talk about what the Biden administration did on energy, including blowing up the keystone. I say blowing up, sorry, I don't want to imply that they were physically blowing it up. But, you know, they revoked the permit for the keystone pipeline when significant money had already been spent. They spent years doing an LNG, quote unquote, pause that everybody in the industry knew was a moratorium, not a pause. And it was kind of the same playbook of, I don't like this energy type, so let me just stop it at the federal level using executive authority.

24:04And then Trump kind of said, well, anything you do, I can do better. And so wind has been completely halted by the Trump administration. Solar was slowed down, although that one's starting to move more recently. And so, you know, the ability of the executive branch to really affect infrastructure development is quite significant. And we've seen manifested, particularly in the Trump administration, but not only in the Trump administration. We've seen what can happen when a president decides that they want to favor or disfavor a given energy resource. On top of that, you know, most of the environmental groups spent the last 50 years cutting their teeth on stopping stuff.

24:40And now there's a very well-established playbook on how to stop stuff from happening. And so, you know, one of the big things that folks during the Biden administration talked about was, you know, we have all these clean energy projects. We want to get all these clean energy projects built. But whether it's a conservative group or another group, you know, there are a lot of ways to stop projects, whether it's a transmission line or a solar facility or whatever. And so NEPA has become problematic. NEPA is the, I'm going to mess it up. I think it's National Environmental Protection Act. Sounds right.

25:06But that has been a way to kind of get projects stuck in permitting hell and just project getting reviewed over and over and over again and never able to get out. We've got issues at the local level. We've got issues at the federal level. And so the ability to kind of help streamline permitting reviews and make things happen and get more certainty is a really big deal for getting projects built. And certainty is better than uncertainty, right? Even if you're going to get a no, it's better to get a no in nine months than in four years, right? How much of the opposition do you think would melt away if data centers would be capable and willing to pay for more of these upgrades that are required?

25:45I think it's necessary but not sufficient. So, you know, when we look at getting data centers built, I think ring fencing costs is kind of table stakes. Like if you don't think if there's not a plan for how you're going to ring fence costs and protect rate faders, then you're dead in the water. But it's not only that, right? When you're in agricultural areas, you know, water usage becomes a really big deal. And so, you know, there also needs to be a plan around water usage. Noise is an issue for folks that are using gas. You know, there's air emissions concerns. Some local communities have major opposition to that.

26:16Some don't because they see jobs that come in with a gas plant. So that's not necessarily a simple story. But then on top of all of those kind of very real, logistical, understandable things, there's also just like a general AI backlash. Like AI is coming to take our jobs. AI is going to take over the world. AI is going to destroy the human race. We just don't like data centers. And so that's, you know, that's kind of an undercurrent against all of it. So even if you solved the cost problem and the water problem and the noise problem and the air problem, that still doesn't necessarily mean that you're going to get community support.

26:46Yeah. Well, you're starting to see like I forget where exactly this was, but there's some communities where they're like, OK, we'll we'll give teachers bonuses. And they're just they're starting to like bribe people and like, you know, pay communities for things that they might, you know, pay a lot in taxes and essentially, you know, give a financial incentive for communities. Because, you know, no one's really fooled by like this is going to bring jobs like, yeah, sure, maybe like a few labor jobs in the short term. But this isn't a long term job opportunity, but a tax revenue opportunity, it could be.

27:18Yeah, and that's not new. I mean, that's the same playbook as, you know, the solar and wind industry and storage projects have done, right? You know, say, OK, well, we're going to come in your neighborhood. Yeah, there's some construction jobs during construction, but then not much. But we'll be part of the tax base. We're going to pay for new schools. We're going to pay for a new fire station. We're going to pay for new parks, et cetera. And so that's that's kind of all the project development playbook, whether you're developing. It doesn't matter whether it's a data center or a solar project or a wind project or a gas pipeline.

27:44When you come into a neighborhood or a community and you say, we want to build a thing here, you do some things if you want to get community support to say, here's why you should let us do this in your neighborhood. And usually providing tax base and funding some public infrastructure becomes part of that. Yeah. By the way, I just remembered it was Louisiana. The teachers were getting$50 ,000 bonuses for a metadata center. Meta just lets throw money around. So, okay. So if you're a founder or an investor and you're looking at AI infrastructure right now, what's one thing you'd be careful not to assume before you set forth on your next venture?

28:21I would assume I would be careful about assuming that a gas powered data center with a long lead time is going to get all the approvals that it's going to need to if political winds shift again in a couple of years. That's probably the thing. This is a tricky time to be setting up a data center, right? Or to be trying to. That's the thing that concerns me the most, right? So like in the jurisdiction that I'm in, is there going to be support for new gas infrastructure? And if the answer is yes, then you're probably okay. And if the answer is maybe not, then you might want to be very concerned about the political risk exposure on the project.

28:57The other thing that I would be concerned about is who are the tenants of this data center? because if I have a data center that doesn't have tenants or dependent on a large collection of startups that could go belly up, I would be very concerned about, you know, the ability. Are you referring to neoclouds there? Not all neoclouds are the same. So some neoclouds have an anchor tenant, you know, think about the anchor tenant in a mall, right? The grocery store or whatever, right? And then you have a bunch of other stuff that might have turnover. But, you know, if you have a neocloud that has a very strong anchor tenant, that's a very different picture than if you have a neocloud that does not.

29:33So, you know, it's a catch 22 for neoclouds, because they're on the one hand, having a strong anchor tenant makes them, you know, their build out more reliable. But on the other hand, it's a risk for them to have, you know, a lot of their eggs in one basket, if you will. Yeah. So you got to be very careful about what basket that is, right? Yeah. So, you know, diversification is always great, but stability is great, too. And, you know, if you look at one of the large hyperscalers, the odds of them going belly up are almost zero, right? Even if other people develop better AI X than they have, they're just going to buy up that new technology, right?

30:10And then they'll merge with it. And so, you know, I'm not that worried about whether the hyperscaler will still exist in five years. It might exist with some mergers and acquisitions between now and then, but it's still going to be there in all likelihood. Yeah, I think you have to be very thoughtful, you know, whether you're investing in infrastructure with your debt provider or whatever, you have to be very thoughtful about who is going to be paying the rent. You know, I just think, like you said, it's a very interesting time here. I think a lot of uncertainty in the next six months, even for how companies both on both sides of the equation proceed.

30:42Do you see any of this getting settled before Congress turns over?

30:49Well, you know, I think I think the best opportunity for hermiting reform is the one that's right now during lame duck. I have I know it's not perfect. And I know that a lot of the environmental groups don't like it, but if you are an idealistic group, you might not like anything because nothing meets your exact idealism, right? I think this is right now the best opportunity for permitting reform. I am very concerned that Democrats are going to overplay their hand and think they're going to have more negotiating leverage in a future Congress. It doesn't really matter if you can't get a presidential signature, and if you can get it done now, I think you should get it done now because there's no guarantee that you're still going to have presidential support if you get all the stuff you want.

31:30I think now is the single best opportunity for permitting reform. I'm not a Washington insider, so give my opinion what it's worth. But yeah, I think that's the most significant thing that could happen between now and when Congress turns. Well, on that note, we're about out of time. Thank you so much again for joining us. I feel like I could ask you about anything and you'll have an eloquent answer. I have lots of opinions. It doesn't mean they're all good. It was great. Maybe we'll have to have you back on sometime. So where can our listeners connect with your work online if they want to hear more about your opinions?

32:02Yeah, www.asinanalytics.com is our website. We put out lots of white papers, thought pieces. We post regularly. Obviously, we provide paid consulting services, too. And happy to connect on LinkedIn as well. Okay. Tim, what about you? Where can people find you? You can find me pretty much everywhere. LinkedIn, X, Blue Sky. I'm out there. And of course, techcrunch.com. And of course, techcrunch.com. Yeah, same here. You can find me all over the place. And you can find Equity at Equity Pod on your favorite platforms. Talk to you next time. Equity is hosted by TechCrunch Senior Reporters and produced by Teresa Locansolo with editing by Kel.

32:38Subscribe on YouTube or wherever you get your podcasts and find out what's next at techcrunch.com slash events. Thanks so much for listening and we'll talk to you next time.