Welcome to CNBC.com. I'm Frank Holland, anchor of Worldwide Exchange, 5 a.m. to 6 a.m. weekdays. Earlier this week, Vertiv and Oklo announced a collaboration agreement focused on the co-development of advanced power and thermal management solutions tailored specifically for hyperscale and colocation data centers powered by steam and electricity from Oklo's advanced nuclear power plants. The pilot tech is planned for the initial Oklo Aurora powerhouse. So to break down what all this means, I'm joined by Vertiv CEO Gio Arbertazian and Oklo CEO Jacob Dewitte. Gentlemen, thank you for joining me. Appreciate it.
Yeah. Gio, I'm going to start with you. So Vertiv obviously focused on power and thermal management. Why work with a nuclear power provider, and what makes this advanced, as you said in the release?
I think a couple of reasons. First of all, awesome technology. Jake and the team have developed—we all know that power availability is crucial to the future of the data center industry, and we are a global leader in power and thermal infrastructure for data centers. So enabling the future of the data center industry is absolutely one of the central focus areas for us. And certainly, small nuclear reactors—and Jake will certainly be able to elaborate so much more and better on the technology—are a very, very promising power opportunity for the industry. And it's not just the power generation part. It is how the power generation, small nuclear reactors, and the data center infrastructure combine and scale to make the SMR technology available to the industry. And we believe that Vertiv, because of the experience, the unique domain knowledge, and the ability to scale, is uniquely positioned to work in a strong partnership together with Oklo in making that future happen, really.
All right, Jacob, I'm going to ask you: why partner with Vertiv? The demand for electricity, it's growing. It's on pace to outgrow supply significantly. Why do you feel like you need a partner to get your energy, your steam, electricity into data centers? I mean, won't the data centers come to you anyway?
Yeah. Well, I mean, I think Gio was hitting on sort of the opportunity side with their leadership in the space, as in many ways is what we see as the go-to provider for a number of different sort of solution sets for the data center industry, ranging from sort of the electric to the thermal management. I mean, they are the standard, right? And for us, it was kind of just like a fantastic opportunity and a no-brainer to want to work with them on this. Not only that, but they had a pretty strong interest and curiosity about being able to tap into some of the interesting things that, frankly, there's a lot of room to kind of pioneer new ways of doing things, leveraging some technology that's existed around, but integrating it in a more modern way to take our heat product and actually increase the overall net energy efficiency. So in other words, the amount of energy we actually produce in our reactor, more of it turns into usable energy that way for the data centers by combining the electric side of what we're doing, finding ways to better optimize that delivery of electricity from our, frankly, generators into the chips. And there's a huge amount of opportunity for what Vertiv has already done but can do going forward to sort of co-optimize those pieces. And they sit at that really important part of the stack to enable this to be a pretty phenomenal solution for, frankly, the hyperscalers and the folks who are thinking about how do we further increase just the net overall efficiency throughout the plant and reduce costs because you can reduce the amount of copper and have some different improvements along the path there.
And then again, back to the energy side, we have heat we have to dump, right? Unfortunately, the laws of thermodynamics say we can only convert about one-third of the actual energy we produce in our reactor into electricity. That means two-thirds of that is, generally speaking, being dumped to the atmosphere. So if you can use and capture some of that heat and be able to use that to support cooling—I know that sounds funny, but use heat to cool. But the heat's basically a form of work you can use to drive cooling systems. You can improve the overall energy usage across the plant, and that just further, frankly, extends the amount of energy we can provide and further reduces the overall net energy costs, which everyone is excited for. So it's overall a pretty significant improvement, upgrade, but integrating with Vertiv's state-of-the-art, kind of industry-leading cooling capabilities at sort of the chip level up back out to the data center side, and then integrating that, it's a huge amount of opportunity. And very excited to work on also actually developing that and piloting it at our first reactor.
All right. So, Jacob, you mentioned a key word: cost. Gio, I want to come back to you. Earlier this week, we saw a capacity auction with PJM that's leading many people to believe that the cost of power is going to increase, you know, rather significantly. As you continue to develop, will this power that we're talking about—is it going to be at the same level, just more available? Is it going to be cheaper? How's that going to work for your customers?
I think it's a little bit early to say and look at the numbers. I think Jake explained the trajectory, and it's a very, very convincing trajectory. So it's not just the cost of power and the power generated—it's not just the abundance of power that can be generated through small nuclear reactors—but it's, again, reiterating what we heard: the ability to reuse the heat that is generated. So the whole package of power generation, heat reuse—exactly along the lines of using the heat, certainly for the cooling of the data center, but there could be other uses over and above that. The proximity of power generation to the use and the load are all elements that make the equation, from an overall power cost, overall PUE in data center speak, all very compelling value propositions. And, you know, being part of this journey is something that excites a lot.
