00:00Meta is making a big push into AI. We know that. And to assist in that expansion, the social media giant is actually adding another business to its portfolio, power trading, hoping to help plant developers by committing to long-term energy contracts.
00:14Riley Griffin covers Meta. Extraordinary story. The amount of diversification these companies are having to do to fulfill the energy and requirements for data centers.
00:23It truly is amazing. And it comes back to this idea that Mark Zuckerberg has pitched as front-loading capacity, bringing on the energy they anticipate, the compute they anticipate for that big day that they are gunning towards, which is the idea of superintelligence.
00:41But in the interim, you know, Meta anticipates a lot more energy needed. And so it is going to enter this power trading market in an effort to ensure that long-term capacity.
00:52There was a great interview you did with Ovi Parekh, who is heading up electricity trading for Meta. Why is she vindicating this move? And what ultimately is she thinking about doing to build this out?
01:06Yeah, so she said that too few buyers are willing to commit to long-term electricity contracts that would justify building new power plants.
01:13So really, the AI demands are clashing with the demands of the grid. And Meta is taking matters into its own hands here.
01:21By becoming a power trader, it would essentially lock in these long-term deals to support its AI ambitions.
01:29It's interesting that certain analysts out there, you talked to the managing director of power modeling firm Habitat, saying that this is actually a natural extension of tech companies.
01:38Are investors understanding that, that they're all going to become basically infrastructure companies, energy companies, trading companies too?
01:46Yeah, it's a kind of managing a risk that we've seen in other industries.
01:49It allows you to lock in energy. And then if you have too much, you can ultimately sell it back.
01:54And Meta is not alone here. So we've seen Apple, Microsoft, other big players make this attempt too.
02:01So Meta isn't alone. And I think that's a reassuring thing to investors.
02:06The other very interesting comment we heard from Mark Zuckerberg on the last quarterly earnings call was that they're thinking about managing that kind of risk when it comes to excess compute as well.
02:17So we're watching closely to see if they make any moves to diversify into that API business, that cloud business to sell that to.
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