So Scott Strazik, you are the CEO of GE Vernova, and they say that timing is everything. You spun out about two and a half years ago.
You spun out right into the tsunami of the data center boom, the resurgence in nuclear power, and just a rapidly evolving landscape, especially in terms of your business. Can we talk a little bit about how the culture at GE was so famed and renowned? How has the spin-off culture been kind of adapted to these times and to the new company?
Yeah, I mean, I would start by saying even the name Vernova and kind of deciding our branding of GE Vernova was very intentional in the sense that the GE dynamic of it is we are proud of our past, but we wanted to create a new brand with Vernova — Verde, green; Nova, new — green innovation to say that the world is changing and we needed to change with it, and that included the cultural dynamics. We talk a lot about going into every day bringing the energy of change and a relentless optimism to be upbeat in a world that's complicated right now, and building a company of technologists, builders, conveners of the industry, but I would also say givers. You know, one of the things I'm very proud of is last December on National Giving Day, our employees donated 23,000 toys to a Toys for Tots program focused on STEM because we need to encourage young kids to get excited about science. Ultimately, it broke a Guinness Book World Record for most toys donated in 24 hours, just in trying to reflect on the fact that this is a unique time. We've been fortunate as a company with our timing, but then we also need to serve not just our customers and our investors, but the community at large.
Yeah. So I want to, on the issue of data centers, I want to start there, but it is the most pertinent factor in the news cycle. I'm changing the news cycle, so ride with me a bit. The idea that we're in a two-week span between doomers, accelerationists — we're seeing data center construction and placement become a midterm issue all the way up to the White House. How is your forecasting? Well, first of several, you have a deal with Microsoft, I believe, OpenAI, XAI — all of the above, right? How do you navigate that? Is that static that you have to deal with, or static you have to hold your company's hands, your customers' hands through? Like, where do you see the data center issue right now kind of sorting as we go along?
Well, I think for context, it's about 20% of our business today is really data center-centric, and I start there just to reinforce that above and beyond the data centers, the reality is the world needs a lot more energy, and it needs a much larger proportion of that energy to be electric power. So we see growth through the long term, of which data centers is a contributor, but it's by no means the only factor. Now, within the data center dynamic and AI generally, I almost start inside our own house, in which we see very material breakthroughs on how we're running the company leveraging AI already — our new product introduction cycle, our engineering productivity that's freeing up capacity for our teams to focus on what's most value-added. So we are very optimistic on where the technology is going and its impact. We need the country to be competitive and to win, but we also need communities to feel like they're winning. And the reality is I'm not sure all of those communities right now are feeling heard and feel like they're winning.
Big infrastructure is difficult, and we're in a chapter right now where we've got to do some work as an industry in this regard so that everybody involved with this infrastructure buildout, which is going to happen, wins. And as that plays out, I'm highly confident that the infrastructure will follow, and we're going to do everything we can to serve both our core customers but also the communities that we're operating in.
So some of the financial commitments to AI and to the data center buildout seem beyond imagination — like we don't have that many zeros in our daily vocabulary. Do you worry about, or how much time do you spend worrying about the — you know, we call it the circular economy. I tend to think of it as kind of a web of varied exposure, whether it's SoftBank, whether it's Google, whether it's municipalities. How much time do you spend thinking about that in terms of a risk factor for your ability to manufacture, your ability to deliver, and your ability to get paid?
You know, if you take a step back a decade ago, when the US had fairly flat electricity demand for really 25 years — 2000 to 2025 — and think about where we were going in the world to try to grow our business and the credit profile at play relative to Google's balance sheet, we're going to be okay.
So Google as a sovereign nation is fine.
Yeah. So really, right? So a lot of these end customers, the financial resources that they have — even though I agree with you, we're talking about dollars with a lot of zeros attached — we underwrite every deal working backwards from things going wrong. That's kind of how you have to underwrite long-cycle infrastructure investments. And we have a lot of confidence on the deals that we're doing. That doesn't mean that when there are debates sometimes on AI and whether there's going to be winners and losers — I'm certain there will be. But the real question is, is this country going to need the infrastructure one way or the other? And I would say we have deep conviction the answer to that is yes.
Great. Well, I just want to do one more question on the data centers, and we'll come back to some of the other ones. But what's it been like? Are hyperscalers a new kind — I mean, you're a lifer. So you've dealt with a lot of different customers over the years. The hyperscalers seem to me to be different breeds of cat. How is it dealing with them on a daily basis?
The hyperscalers are making us a lot better, and the reality is they're much more ready to co-create new solutions together and almost expect it than maybe our traditional utilities. The traditional utilities may have been in a traditional sourcing model of just trying to create a supply base to drive cost competitiveness, which is logical. The hyperscalers are more focused on innovation. Frankly, they spend a lot of time at our research center in Niskayuna, New York, where we have hundreds of scientists working on some of the hardest problems in the world. And I think they're drawn towards Vernova because scientist to scientist, engineer to engineer, we can co-create the future together. So it's giving us a catalyst of growth because it's an ability for us to co-create very complicated solutions that are applicable to the data centers, but in reality they're going to be applicable to many high-electro-intensive applications over time that aren't going to just help them. It's going to help us electrify the world.
So the communication is good. It's not like you'd have to deal with effective altruism recruiting in a day.
No, I would say these are big companies. So of course we're learning how to navigate big organizational structures. But this year, for context, about 25% of our orders will be with customers that had never done business with General Electric. So prior to our spin in April of '24, 25% of our orders — we're learning quite quickly how to interact with these new customer archetypes. 25% of our employees had not worked at General Electric. They are new to the company since we spun in April of '24. So, I mean, the world is changing, and our company is changing very quickly to serve that market.
So, and until then, you just have your eye on the political debate and the communities and the like, right?
Yeah, I think we've got to take a long view on all these things. And the long view within the communities and within the politics is we need more infrastructure for competitiveness, for national security, and we're going to continue to invest in it.
So, Long View — I've watched a bunch of interviews you've done, and you talk quite passionately about nuclear power. And we've seen the resurgence. You know, we've seen again hyperscalers partner up with Three Mile Island and bringing large reactors back. You're working in the small modular reactor space, which has been just a terrific growth area, and you've seen startups come in. You've seen really buoyancy in a place that most of us didn't know the acronym a few years back. And you're close on a few, right? So tell us a little bit about the nuclear path and kind of your time horizon on when this starts to make an impact.
Nuclear energy is going to be critical for our next steps. But I think, again, taking a step back for context, I mean, the country has about 90 gigawatts of nuclear power every day, and that's more than any other place in the world. France and China, as an example, have about 60 gigawatts running today. But the challenge in the US is we haven't started and built any new nuclear in over 15 years since Fukushima in 2011. That is changing and changing quickly. This is something where, from an administration perspective, it's very clearly a priority for them. And it's a priority for them because it's dispatchable power, because we can control the fuel source, because it's very power-dense — being you can create a lot of electricity in a small physical space. And we are making a lot of progress towards multiple deals. We're working with the administration right now on a 3-gigawatt project. That would be 10 300-megawatt small modular reactors, one in Tennessee and one in Alabama. We're hopeful that for the project in Tennessee, we'll get our license to start construction as early as this month, maybe in October.
That's closer. That's Clinch River.
So that's Clinch River. Exactly. And we're already in construction on a project in Canada outside of Toronto in which the first 300-megawatt reactor is on path for being operational in 2030, and we have contracts in both Poland and Sweden. So this is going to matter. Now we have work to do to continue to make the technology more affordable. But when you have an industry that really wasn't too alive the last 15 years, we need to rebuild the supply chain, right? And we're committed to do that.
Yeah. Where is — just for the layman, what are some of the links in the supply chain that have to be rebuilt for nuclear power?
Large castings and forgings are things that just haven't really been built in a long time. But frankly, even the fuel infrastructure, as this takes off, we're going to have to invest more into. So there's work to do for sure.
And the Canada project, I guess, is the furthest along. You had government partnership with that. How important is that overall, whether it's the US, Poland, Canada?
I think in any of these countries with new nuclear, the government's going to be critical. And yes, the government is a partner in the first project in Canada. For us economically, these first projects end up being more of a cost-plus model, candidly. So as a company, we don't make a lot of margin, but we also don't take a lot of risk as we rebuild a supply chain. And as that supply chain is built, then by the time we get into the next decade — which is really the way that we think about this business — we should be prepared and ready to offer firm fixed-price contracts. But because nuclear has had its challenging chapters, these first projects in any of these countries are going to require government support. But this is exactly what the government is there for, because this is, although in our case very established technology, the EPC — or the engineering, procurement, and construction process — is somewhat nascent. And that's where the government's going to have to help. And I think the administration's working really hard to be that partner for us so that we can take that 90 gigawatts we have running in the country right now and make it many multiples of that.
