E358 | Dan Bowyer & Mads Jensen, Superseed: Microsoft's $1.6B Nuclear Investment, France's Energy Legacy, and Predictions for AI in 2030

0:00Welcome, it's the European VC. We have a full list of topics to get to today. We've got Microsoft looking to reopen Three Mile Island for energy to power AI. Have a look at what France did on the nuclear tip as well, just to get some contact to Europe. Positivity and energy in the UK. Is labor being a bit of a sourpuss? I think so. Amazon is demanding everyone back in the office from January the 2nd. Samsung and TSMC are looking to build a plant in the UAE to build chips. What will AI look like in the year 2030? Pavel Durov, as you turned, it looks like on handing over details from Telegram. Mark Zuckerberg has brought out his Orion face pods.

0:44Have a look at those. Mirror leaving OpenAI. The Foundations paper. If you haven't seen the Foundations paper on why the UK is stagnating, it's massively exciting. If we get to all those, it'd be wonderful. Here's a few words from our beloved sponsor. How to Web Conference is the leading startup and technology conference in Eastern Europe. You're shitting me! The 2024 edition takes place on October 2nd to the 3rd in Bucharest. You tell him I'll be there! You can enter the most electric space for doing business and building technology in Eastern Europe. There you'll find 3 ,000 plus international attendees, 500 plus startups, 200 plus investors, 100 plus global speakers, and infinite possibilities to connect and get inspired for your next move.

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2:04United and determined we can serve as a model for other regions of the world. The nature of a problem requires a European response. Europe is a story of new beginnings. Let's start acting. And you've got Mads and I today. We had a bit of a guest fail, so it is just Mads and I today. But we've got lots of things to talk about, Mads. Where should we start? Well, let's start from the top, Dan. Okay, so this isn't really a Euro-focused thing, but I think there are some lessons to be learned. And a wider energy topic to be discussed is how the heck is Europe going to provide all the energy required to power the next wave of AI?

2:50So Microsoft is hopefully, if they get the approvals, doing a deal to reopen Three Mile Island, which melted down, I think, in the 80s. One of their reactors had a really, really bad meltdown. So they're looking to spend$1.6 billion to revive the plant, the first ever restart of its kind. And it's looking to come online by 2028, which is super, super quick. Now, what can we do? What is the UK, the European version? I know Hinckley sees coming online. How much power do we need? Do you know this, Mads? Because I know you pay attention to these things. How much power do we need to support the next AI wave of evolution and revolution?

3:31The short answer is a whole lot more than we have. I mean, just coming back to Three Mile Island, I think it's super interesting. I think it's super positive in many ways. If we put it in context, I think it's great as to power one Microsoft facility or a set of Microsoft facilities. It's a little over 800 megawatts that are being brought online there. If we compare that to what's happening in renewables elsewhere, Texas is working to bring 15 gigawatt of renewable capacity online over a similar period to the Three Mile Island reopening. so there's just there's a lot happening in energy in the states right now and i think that's right because we need an all of the above strategy i think part of the problem we have in the uk is we'll come on to that when we talk about foundations is we've just been a little bit confused and maybe rudderless strategically on the energy point um and hang the point c you brought it up.

4:31This is massively delayed. It was meant to be completed in 2017 and cost 18 billion pounds. It now looks like it will come online in 2030 or 31 and cost more than 40 billion pounds. And there are just a number of things that are conspiring there. So in picking the design, the UK went for this new European pressurized reactor, this new design that's meant to be the new European standard, which is a good thing. The challenge is we haven't built any nuclear power plants in the UK for decades. So you're sort of saying, well, we're going to cold start and we're going to cold start with something nobody has done anywhere before, because, you know, why take something off the shelf that already works?

5:15So we have a promising but not yet proven design. On top of that, we have, as we'll talk about with foundations, we have a kind of a regulatory burden on new projects and infrastructure in particular in the UK that just, you know, loads all this extra bureaucracy on top of the project and so it was set up to if not fail then at least be massively delayed and have massive cost overruns from the start and that's not great that's just not how we should have done this but that's where we are and you were mentioning uh alex stapp and france so france they went whole org on nuclear in the 70s and i'm looking at the Exactly.

5:54More than 80 % of their power mix is nuclear today. And that's been terrific for them because it's a stable, cheap source of energy. And it also means many, many fewer emissions. Germany has gone all in on renewables in the last few years, but to the detriment of nuclear. And they've started decommissioning working nuclear plants. And the downside is that they're switching. The downside is they're switching to coal in some instances. so lots of confusion across europe what do we need i mean we certainly need you know we need a good strategy i think it's an all of the above strategy i think it's it's not either renewables or nuclear it's you know renewable when it makes sense and it's nuclear when it makes sense and we should just um we should we should just try instead of sort of flacking on the strategies and running off in different directions to try and do something that's a little bit more yeah a little bit more strategic well let's see if that happens yeah i was um i was looking through the foundation's paper which we'll talk about and just the planning regulation for the new proposed thames crossing costs 300 million pounds just the planning that's yeah which is 300 360 thousand pages it's it's utterly utterly bonkers and that's not not it's not a not a not a brick has been laid not a foundation has been dug nothing um so on that on that negativity um i'm going to flip to positivity i was listening to richard walker who's the ceo of iceland on um i think it was a bbc show i think it's a laura kunsberg show and he he when i heard this i was i kind of i was fiddling around in the kitchen and i overheard him speaking i was like he's bang on and what he said was he's listened to all of the labor the reeves the starmers going oh it's going to be a tough budget or the economy or the tories this oh and he just turned it around on its head and said look we just need some positive noises some some positive energy from our leaders to show us the way and business needs that positive message and that's you know the sentiment is is the bedrock of investing and you know waking out of getting out of bed and actually doing doing something positive so i'm really with him i think that we definitely need a positive message i i just don't know how and how do we cultivate it so i don't know have you have any thoughts have you heard any have you heard any any shifts in the rhetoric from from any of the labor team uh what was sorry what you mean what bring back tony blair yeah i'm about it he's made a few noise recently through his tony blair institute maybe maybe he does want a little uh maybe maybe he's behind the scenes who knows but he does want a little bit of a resurgence i think but i just want i just want to do positive i i've not heard anything and listen i'm not saying don't be realistic but come on no it's been a bit dour but look i have a lot of sympathy with this but why do we have to choose between being positive and doing sensible things why can't we have both is that too much to ask for you know you fix all this planning stuff right put good strategies in place and be positive and optimistic i think then we'll make lots of progress i completely agree yeah i think i think i think a line needs to be drawn i i my sense was somebody who was at the heard Starmer talk at the last Labour conference.

9:06He said that I think he's heard or maybe something's kind of dropped with him that there needs to be a, you know, just a flip. Yeah, there's some stuff over here, but there is a positive flip over here, so let's see what happens. A really unusual move that might well follow into big tech across Europe, and obviously, you know, it does set a bit of a tone. Amazon saying to its employees, everybody back in the office by January the 2nd. So this is a five-day work week for everybody back in the office. And it's a directive from the CEO, Andy Jassy. He announced this week. Is this a step forwards or a step backwards, do you think?

9:46Yeah, I think that's a really good question. In some sense, he's not the first one to sort of point out that there potentially is an issue. We saw Google, we saw Eric Schmidt sort of saying, look, Google lost its leadership in AI. And then backtrack. And then backpedal almost immediately. He was told, right? I know the Google unions sort of got hold of him. I think the best companies will often be the best when people generally work together in offices as opposed to sitting remotely. It's all the evidence, all the experience we have from working with so many companies, right? Whether that's five days a week or four days a week or four and a half days, I don't know.

10:31but I don't think it's fully remote. I think we've tried that experiment. There may be a few examples when it can work but I think in general being together, working together is so powerful. The magic, kind of just solving problems, the serendipity is really important. Teaching, learning, right? Having juniors that can learn directly from seniors, overhearing conversations, being pulled into stuff, the kind of thing that doesn't tend to happen nearly as well when folks are distributed. So is five days a week a step forward? I don't know. But is the sentiment the right sentiment? Yeah, I think it probably is.

11:06It feels to me like a minor step backwards. I wonder, obviously, they haven't gone into other flexible working policies, other concessions. This has just been a blanket statement. We don't know what else is going on behind the scenes. And I'm sure there are allowances and other company policies in play. So maybe it's a little bit of clickbait. But it's a strong message, everyone back in the office five days a week. Moving slightly further east, so I don't know how this looks for Europe, but Samsung and TSMC are looking to do a deal to build more chips in the Middle East, in the UAE. Now, obviously, there's a whole bunch of work going on, especially after the IRA in getting more chips built in the States.

11:53I don't know anything that's happening in Europe. Do you know what the story is behind the story? There's a lot of – so the story behind the story is I think executives from Samsung and executives from TSMC visited the UAE and had conversations. And then I think a combination of them having been observed there and some rumors, we don't know how much truth there is to them. have sort of led to this Wall Street Journal article talking about the 100 billion. I can totally see the credibility of the speculation. So if you're sat in the Gulf right now and you can see that oil is going to run out at some point, you're going to think about where is the future.

12:33And right now we can all see a massive future in semiconductors. So I think it'll face a lot of challenges. you know we know that one of the kind of one of the strategies in the UAE is to should we say certainly be an ally of the west but also not be not be so strong an ally that you can't do business elsewhere right sort of a little bit of the you know we're the Switzerland we talk to everybody and you know the IRA and you know US policy in general has sort of said you know these the most sophisticated semiconductors are restricted to us and our closest friends and so So what happens if you have TSMC producing in a place where the chips might be shipped off to Europe, or might be shipped off to the east, or might go to China?

13:22Who knows? So I think there will be a lot of challenges to implementing this in practice. But let's see. It's certainly interesting that it's happening. Do you know of any major plants being built in Europe? There are several initiatives. I don't think the scale is quite the$100 billion we're talking about here, but everybody's looking at and talking about semiconductors. And there's money behind it, too, also, in Europe. So staying with AI, obviously, you've got the chips down with their massive energy requirements fueling the base of this AI revolution. The Wall Street Journal did a piece. It's the year 2030.

14:00What will artificial intelligence look like? And I've got to say, there's not much in here that I don't agree with. I mean, just to give you a few quick notes. So AI as smart as humans, not likely is one of the lines. So AGI, there's a question about AGI. Transformation, not job loss. So co-piloting, supporting, not necessarily losing jobs. What are the other themes? AI everywhere, like the internet, I think that's bang on. AI personal assistants, bang on. I'm not convinced they'll be in human form, as Elon suggests, but we'll see. AI agents as collaborators, bang on. Empathy bots for kids, scares the living bejesus out of them.

14:37But is there anything in here that you read that you think, yep, this is absolutely going to be a game changer or the opposite where you went, do you know what? You know, this is absolutely off target. Yeah. And I think it's the question that's on everybody's minds. How big is this going to be and how fast is it going to happen? Is it real? Is it hype? Healthcare, I think, is a great example of where we're going to see a transformational impact. You know, doctors are, they're experts at curing people, but they're also humans delivering care. And I think a lot of the expert factor of, you know, how can I make sure I know everything about everything?

15:16It's actually one thing that computers do really well. So I think they'll be better at image analysis. They'll be better at knowing the entire lexicon of, you know, what symptom is connected to, to what disease. but then I think there'll still be a huge role in humans, working with humans and helping them think through kind of these terrible situations that one can be in if one suffers or faces a healthcare issue. But I think healthcare is definitely an area where this is going to be massive. Is it going to impact jobs? Tremendously so, but I don't think we know quite in which way yet, whether there will be replacements at the other end or whether we're going to have to think seriously about completely different ways to organize society.

15:57My assessment is that given the pace of AI and given how great these models are becoming and how fast it's happening, the change is going to be quick enough that we are not going to be able to simply just rapidly shift people into other jobs. I think we're going to see massive transformation over the next decade. So lots of questions to think about for everybody, both involved directly in the industry, but also for everybody else working in government, a policy or in and around this space. And then there's this final big question. Are we going to have AGI? And I don't know. It seems to be sort of this binary question.

16:34But what is AGI? I mean, AGI seems to be kind of, that's just the next big model that we haven't quite made yet. The models are already in unbelievably good, right? They'll do things. I mean, anybody that's played with new O1 from OpenAI, but sure it's not AGI but the work it delivers at the pace it delivers it ingesting have you seen the voice though yeah it's I mean it's just so good and it can do so much I use it all the time for so much work and uh and I think this is this is what we're going to be doing everywhere so the impact will be massive is it going to replace all of us I don't think so is it going to become a robot overlord and kill all of us I don't think so is it going to have a massive transformational impact on society?

17:20Absolutely. I mean, I look back to every other technical revolution, and this isn't the first time we've had, you know, massive impact from, you know, engines and machinery transforming agriculture, as an example, or, but obviously, the speed of this and the depth of this is unheard of, and is unprecedented. But this isn't the first time that we've had these massive technical upheavals in society that have totally transformed, especially the jobs market, just focusing on people's livelihoods and their well-being for a second. And I don't believe it, even with the speed of AI, I don't believe it's going to be an overnight touch.

17:59Even if it could be, I don't believe that humans, government, unions, regulators would necessarily allow it. So I don't think it's going to be this overnight, oh my God, I've lost my job. But we will see. I think the other thing that stood out for me from this article, and just generally thinking about is this trust piece and the privacy piece. And you talked about healthcare, knowing everything about me and everything about the disease. And it's like, how would that lean into insurance? Or how will that unlock the privacy and trust conundrum? So lots to do, but I mean, super exciting, right? My goodness, it's super exciting.

18:33A very quick one. So Pavel Jurov has turned around. He's had a little bit of a change of mind. He is now going, and this is the chap who's the CEO of Telegram, the messaging platform that's got a whole bunch of raft of issues with extremism and unpleasantness. He has now made some concessions and will hand over phone numbers and IP addresses. What will this mean for other messaging platforms or other social media platforms? They're still maintaining it. They can't read the messages. They're still encrypted. So I'm kind of like, well, how do you know if there's something nefarious been going on in the background.

19:13I guess you can only know because of their search function. So people are searching for extremism or unpleasant things. You don't necessarily need to know exactly, right? Because there are other ways to find out. You need to establish a suspicion. You need to know where to look. If it could tell you where to look, who to go talk to. I mean, people also exist in the real world. If it'll tell you to go talk to these five people, it looks like they might be up to something. that can be a help in an investigative situation but i think you know some of the things we've talked about terrorism um the exploitation of children right i mean heinous things it's it's it seems that we we um the technology we've given some really bad actors some incredible powers and we we have to try and work out how to how to catch them yeah but there has to be god there has to be some guardrails, there has to be something.

20:05It cannot be free-for-all massive connection. Although it does beg the question, you know, how do you – and it's off-tech topic, but how do you deal with those things coming up in the first place? But that's a whole other rabbit hole. I want to stay with Big Tech and another very quick one because it doesn't really sit with, you know, super startup lands and especially European startup. But I was watching Mark Zuckerberg launch the Orion glasses, the prototype glasses. his answer to the Vision Pro, I guess. And I saw him in an interview, and he was talking about how this is going to be the next natural wave of technology and how it's going to connect humans in a much better, smarter, brighter way.

20:46And I cannot help but think that having something that physically sits between me and my wife or my children or my community is the absolute antithesis to connectivity. And I don't know if I'm just being an old fart. I don't know how you think about this, But how is this in any way going to be the next wave of the technical revolution? Yeah, I think maybe there's a little bit of a confusion there in his mind. And he's normally very, very straight thinking. But, you know, he's got this notion that Meta is not a social media company. It's a human connectivity company. And he has, you know, he believes he's seen a vision around kind of this augmented reality and these glasses.

21:23And I think he is transposing the human connectivity identity that he has imbued into the company with this next wave of device, which is the glasses. I don't think it necessarily leads to more human connectivity, but I do think it potentially could be an important step as a computing platform. I'm not saying it definitely will be, but I think I couldn't write it off either. I don't know if you've seen some of the work Neuralink has been doing, sort of embedding computer systems into human brains. I mean, it sounds very scary, but when you think about people that suffer handicaps or are in situations when they no longer have full control of their bodies or their nervous system somehow is damaged, and you can embed computing devices that can allow them then again to start communicating, to engaging, maybe to control their bodies in ways they couldn't do before.

22:16I mean, these are major medical breakthroughs. And I think they and the glasses are both part of the same thing. Today, we talk about kind of in the 80s, when I was a kid, we talked about cybernetics and we talked about the future where computers and people, they fuse into a new thing. To some extent, it's already happened. I mean, think about the relationship we have with our phones today. Most people check them hundreds of times a day. We're completely wedded to them. And we know this because we know if we're asked to leave our phones somewhere for a day, it's almost like we've left a part of ourselves, right?

22:59Yeah, I'm on a leadership course next week where I've been told no phones. I have to leave the phone. I'm like, what am I going to do? Yes. Yes. Yes. And I think it is not definitively for sure, but I think it's very plausible that this type of augmented reality that Meta is working on could be one of those steps. I certainly think it's very interesting. I don't know if it's worth kind of the 40 or 50 billion dollars he's betting on it. But I think there could be something in it, potentially. I'm with you, except you're talking about edge cases, you're talking about disabilities. and I'm sure there are some commercial applications, training applications, security applications.

23:39But whenever I see, whenever Tim Cook was launching the Vision Pro and I was watching the very slick meta presentation, I'm always looking at within the context of, is this a mass product? Is this going to improve the lives of the masses? And neither did. I mean, I think, I'm sure Apple will never release the sales figures for the Vision Pro. But it just feels like we were caught on the tail end of a slow tech decade with crypto, Web3, Metaverse, all of these things. It felt like there wasn't enough revolutionary stuff to release. So we kind of got stuck in all of the other things. I've got loads of money and I've got loads of engineers.

24:19Let's build some stuff. And it just feels like we just got caught there for too long. And this feels like the end of that. It feels like we committed to it. And the Orion Glass is the end of that process. I said it's justified. No, it's justified cynicism. And I think you spent that much money, you got to show something. Let me take a step back. So what is the dream computer platform? If we think about sci-fi, so our best imagination, how do we think about how computing should evolve? Well, I'm thinking Jarvis, right? Iron Man. Yeah, just that. This massive interface. Well, what if that massive interface materializes because you put on a pair of glasses like that, and suddenly your whole room transforms into a massive computer?

25:06It's AR, so you can still see the room, but you just have this massive computer you can interface with. Will that be the interface? I don't know. Or will it be Neuralink? I don't know. But there will be something. We are not going to use... Neuralink again. Neuralink again. This I'm telling you, we are not going to be using phones the way we do today in 20 years. there will be evolutions in the interface and so i just think it's great to try lots of things and one of them is going to try again transform how we interface with computers and how we work yeah yeah i i listen i i'm i'm nearly with you i'm i feel a bit of an old an old misery so um i'll park my cynicism now i want to dig into foundations with you so this was a paper that was sent to me by a founder on its day of release.

25:53And he said to me something that really pricked my ears up. He said, Dan, you should start a UK dynamism fund. He read this paper, he was super fired up. We've been speaking on and off for a couple of years, he pitched us and we actually didn't end up investing in his business, but we stayed in touch. And I love this notion. And what this paper is all about it's called foundations and it's written by ben southwood samuel hughes and sam bowman and it's all about why the uk has stagnated especially since the gfc 2008 that kind of that the last let's put it in the last 20 year bucket and it's a must read anybody any walk of life must read this um so parking the uk dynamism fund which i believe we are in a portion of regardless, Mads, but we'll maybe get onto that.

26:43I want to just kind of just give a little bit of just some key takeaways just to set the tone of what this paper goes into. Effectively, it's about highlighting the costs, the difficulty of building infrastructure, projects and declining productivity. That's the essence of it. Infrastructure, energy, housing and investment are the four key themes that it leans into. And it focuses on a lack of all of these things, which in turn has blocked economic growth, calling for systemic reforms similar to those that revitalized the economy in the 80s. The key takeaways, in terms of per capita electricity output, we're closer to developing economies like Brazil and South Africa than Germany, China, Japan, Sweden, etc.

27:27All of our infrastructure projects, and we've already touched on this already, Maritza, they all have costed between two and eight times more expensive than their peers. HS2, Hinkley, all of our tram projects are massively expensive. We've already spoken about the 300 million planning costs for the new terms crossing. That's just planning. Real wage growth has been flat for 16 years. Before the pandemic, Americans were 34 % richer in terms of GDP per cap. I compared the French and Germans were 15 and 18 % more productive than us, respectively. To put the GDP per cap shortfall since 2008 into perspective, If we'd grown at the same rate between 1979 and 2008, we'd be nearly 25 % more productive, which in turn powers, defence, welfare, healthcare, roads, all of the things that we're talking about, all of these infrastructure projects.

28:21Education. education it's just it's just i mean i've gone i know i've waxed on a little bit here i just wanted to give some of the of the topics and the theming just to set the tone but let's go into the problems the challenges the opportunities here because this isn't the first time that the uk has been in the doldrums this isn't the first time that other countries have had hard times and turned things around and we have we've done this before so what you've read what was your take how do you see the challenges how do you see the opportunities what's your i'm going to shut up now what's your what's your insight and now firstly big big credit to the authors for pulling this together yeah what a what a tour de force what just a beautifully written paper that you know even with the best will in the world you know you even if you want to be as critical as possible you read through this it's it's it's so well researched and argued um that i hope this will become required reading in Whitehall because it just must be.

29:17Many of the things they point out have been discussed in isolation before, but they bring it all together, which I think is what's so important. And the overriding theme is that we have made it illegal to invest in and develop things in the UK. We have made it so complicated, right? I say illegal sort of slightly flippantly borrowing the term from the authors. But you gave the example of a 360 ,000-page document prepared, nearly 300 million pounds spent just for planning of a crossing. I mean, it's because it's so complicated and requires so much work from lawyers and consultants and who knows what, that it's practically illegal.

30:03It's practically impossible. So we have a very restrictive planning system that goes back to 1947. 47 it's been upgraded the gold plated over the years there's a lot of centralization in the uk we have one of the most centralized governments in the world it's not helping us we have all the high energy costs that we spoke about before because we've not invested in energy and nuclear for a long time and then compounded on that is barriers to private investments you know private companies are not allowed to build roads are not allowed to do some of the things that maybe we We should partner with private companies to do.

30:35So my takeaway is, look, it's a very, very important discussion. There were talks about this before the election, that for the UK, for the UK government to unlock growth, they have to fix planning. If we don't start building again, we're toast. You gave the example before of us having seen situations in the past where we righted the ship. In 1973, the UK joined the EU. In the 80s, you have Thatcher and the Big Bang deregulation. And the combination of the trade boost with our closest partners because of the union membership or the free trade agreement, as it was at the time, and then the Big Bang that boosted the financial sector just gave us 30 years of incredible growth.