So, Nvidia's CEO said a few months ago that he knew he was basically holding up the entire AI ecosystem and by extension the entire economy. But there's an argument to be made that you are that, aside from GPUs, the hottest commodity in the world is a GE Vernova turbine that generates the power that we all need. How are you investing to meet that demand? How are you balancing the risk that the big tech companies are thinking about too of overbuilding versus FOMO versus underinvesting because you're a little downstream of them, rough stream of them.
You bet. I mean, over the next three years, we're going to invest 11 billion dollars into growing our business and both R&D and capex to meet this moment. The reality is we don't have a lot of concern on overbuilding because when we really look at, as example, the US and really think about the build that we are driving, even if there's certain data centers that the economics don't make sense, this country needs more electrical infrastructure for the country to thrive. I mean we have about 1,200 gigawatts of power capacity in the US. 200 gigawatts of it is still coal every day. The economics of that coal will be retired. So even if some of the data center build for some reason, and I don't believe this, but if you want to underrate the tougher case, isn't needed for the electrons, the incremental natural gas that we're building today is going to be economically much more compelling for the country's existing electric power system. And it's also not just AI. I mean, we've got a lot of factory build as we create more redundancy in the system as you go to the extreme of supply chain decoupling with China that requires more electrons. Heat pumps for homes, EVs, there's a lot of drivers. It's not just AI.
Do we have a lot of that? Because actually, I think year-over-year manufacturing construction is down. It's obviously a priority of the administration. Are you getting calls from industrial companies saying, 'We haven't put a shovel in the ground yet, but we just want to make sure that if we did, that the power is there.'
More extreme than that, that there's shovels in the ground that are at risk of not being operational because the electrons aren't going to be there. I mean even when you think about the foundries that are being built, chip factories as an example that are highly electro-intensive, that risk exists if we don't ramp up to meet that type of manufacturing growth which is significant.
Is there a risk that the demand is there as you say but that the efficiencies get really good that you know over time we've been doing more and more with fewer electrons?
I think that is almost a given that that is going to be where this, we're rooting for that, that efficiency definitely takes place. But you have to just again take a step back and say the world is only getting about 20% of its energy every day from electric power. The other 80% is still coming from the molecule from coal for both heating and industrial applications. There are very few people that argue that the 20% of the world's energy that's coming from electric power shouldn't double. So, we're long that the world needs more electric power and that it's going to need many different forms of that technology whether it be the combination of gas, nuclear, wind and investing in all of them along with investing in the grid.
It's funny like I don't think the CEO of General Mills says I hope people get more efficient about their Cheerios consumption. Like what is it like most people who are selling a product actually benefit from some inefficiency and over consumption? What is it about your business that you hope that we are able to make the electricity that you're providing go further?
Well, because I think I thrive ultimately if my end customers thrive and if the countries that we're serving thrive. And I think by default, we want this technology to continue to become more efficient and more productive. And then as the economies and as the country becomes more competitive, we're going to benefit from that. So, I just think at the end of the day, a more prosperous economy is ultimately going to need more electrons. And we are working very hard in many ways and also partnering with companies within the ecosystem to drive the efficiency of the systems. And that's why we talk more and more about being a very unique company that can not just provide the power generation equipment but also the electrical equipment, in concept we're not there yet, power to the rack that can drive a lot more efficiency and with it more competitiveness.
How do you decide who gets the turbines?
Economics really decide that. I mean, I think the customers that see the most attractive economics that have projects that are most shovel ready, what I say every day is that we're not going to let a pedestal, as an example, if we're talking gas turbines, be sitting there without a gas turbine. If the plant is able to get built, if the gas is able to get there, we'll find the gas turbine. So, the reality is what we do is primarily in a controlled environment. We make product in factories. We invest in those factories. That's in some ways the easier part. The harder part is actually building the plants and getting the communities on board and getting the system of systems together. But as those dots are connected, we will meet the moment and we will have the equipment available.
Is there a list price for one of these or if are big tech companies saying I'll give you 5% more if I can get ahead of Google?
They're all a little bit different, you know, because they all are being built in different environments with customers that have different specs for sure. And timing matters and admittedly we are in a massive investment cycle right now to meet the moment with the customers that have this demand. So, the economics are definitely evolving as we go.
Consumers are watching their electricity bills go up and either rightly or wrongly blaming the you know giant energy sucking sound that is AI. Like can you actually just sort of help us understand how much of that is because of this huge new demand from these big enterprise customers?
Minimal today. At the end of the day, electricity bills are going up primarily because we've underinvested in the grid over the last 50 years and unfortunately the electrical equipment with that grid is reaching the end of its useful life and we need to reinvest in the grid. The power generation generally speaking in most parts of the country have been coming down but utilities have had to reinvest in their grid and that's what's leading to bills going up. Now, at the end of the day, if we do this right and build a more efficient system and make the right investments in our grid and have a more meshed system together that can make sure available electrons go to where it's most needed, cost will come down. Ultimately cost will come down with big infrastructure builds including with the data centers in the context of the hyperscalers determining or committing to deferring some of their electrons back into the system when there's peak needs when it's really hot in the summer or really cold in the winter. And that can stop the utilities from having to build incremental what we call peak power plants which are really expensive but maybe are only used certain hours of the year. So that is this future chapter. It's not right now because right now there's a huge investment cycle that we're having to pay for.
Is that contractual or we just counting on the big tech companies to throw some of their electrons back at us?
