FII9: Fred Thiel - Chairman & CEO, MARA Holdings

You marry Bitcoin mining to AI and Bitcoin mining can completely shut off when the grid needs it and the AI can continue to operate. Mining Bitcoin doesn't mean people are going to be buying and selling things with Bitcoin. It simply means creating a commodity for export.

Thank you.

Yeah, FII is a very unique event because it not only gives you the ability to meet all of the key both governmental and institutional players in the kingdom, but it also brings people from all over the world. And so I have opportunities to meet leaders from energy majors from all over the world. I have the opportunity to meet leaders of banks from all over the world. I have the opportunity to meet with business partners. And it's a very convenient way to get a lot of work done and continue to build on the relationships that we have been working on here in the kingdom for quite some time.

Absolutely. We're really a company that utilizes energy and finds ways to maximize the value of electrical energy and we do that using high-intensity compute which is either Bitcoin mining or artificial intelligence processing. Primarily our business was built by mining Bitcoin. We're the largest publicly traded Bitcoin miner in the world. We're also the second largest holder of Bitcoin in the world of public companies after MicroStrategy. Our business model was really built by working with energy companies to use energy that they couldn't otherwise utilize. And this is unique. People have for years talked about Bitcoin mining consumes all this energy and increases retail electrical rates. It's not true. What we do is work primarily with renewable energy developers. And we consume all the electrons they can't sell naturally. One of the problems that's happened over the years is that so much money went into subsidizing renewable energy sites that they overbuilt and a combination of building in advance of a hydrogen market that still hasn't developed or building just large-scale sites to get government subsidies. The big problem is transmission which is how do you get the electrons from the wind farm or the solar farm to the consumer and more importantly all the wind farms turn on at the same time of day. All the solar sites turn on at the same time of day which floods the market with electrons. The market is an effective and efficient marketplace and so you end up with more electricity than people can consume and that makes it very hard for a lot of these renewable projects to be profitable. And so we can move the demand for electricity to the wind farm and we can consume every electron they don't use or to the solar farm and consume every electron they don't use and that makes them much more profitable.

Well, it's really a question of transmission again and congestion. The energy markets and the way the energy grid works is a bit like the plumbing in your home. If you try and put too much water in and you don't open the taps, the pipes break. And so the grid to keep balance, they can only put in as much generation as you take out. And so wind farms and solar all produce electricity at the same time. It just happens to be mostly from 9:00 a.m. to 3 p.m. which is when the lowest amount of electricity is used. And so you get a flood of energy in the market, floods the market, the prices go to the floor, and the prices can even go negative. And so what happens is these sites are curtailed, essentially shut off from the grid. In places like the UK, the government pays the renewable energy producers a billion pounds a year for energy that can't be sold. Meanwhile, you have 5 million ratepayers in the UK who can't afford to pay for the energy to heat their homes. Seems a little imbalanced.

Correct.

Absolutely, it's a great thing for all sorts of reasons but from an energy market...