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Can data centers really go green with natural gas?
147 Plays3 months ago
Amy, Karthik, Mike, and Anthony discuss the recent resurgence of natural gas power demand for data centers, and get to asking the big questions, like: are we in an AI boom, can carbon capture really work, and what's AI even good for anyway?
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Transcript
Introduction to the Podcast
00:00:10
Speaker
Hello, and welcome to Innovation Matters. It's the innovation podcast brought to you by Lux Research. I am Anthony Schiavo. I'm senior director at Lux Research. I'm your host. And I'm joined here by my co-hosts, Mike, aim Amy, and Kar-Tek. How is everyone doing on this fine December day?
Lux Executive Roundtable Discussion
00:00:32
Speaker
Great. just Just back from ah Silicon Valley, we had our Lux Executive Roundtable and Forum out there. So I got to, it was ah it was a sunny California. It was actually a bit cooler than I was expecting, but probably not unusually so for Northern California this time of year. But but yeah, it was some good discussions. And now back on the actually rather sunny East Coast now too.
Veggie Straws Skepticism Turned Appreciation
00:01:00
Speaker
So that quite is quite a bit colder.
00:01:02
Speaker
Yeah, it's ah cold in Amsterdam, the usual December chill going around, just enjoying a bag of lentil chips and chilling.
00:01:13
Speaker
Bag of lentil chips. Wow. I don't think I have any here, but I used to, there was some good lentil snacks that I've been, I've been stocking in the office. Well, Anthony was saying earlier about these veggie straws that he's enjoying too in the office.
00:01:30
Speaker
Yeah, I was a real veggie straw hater. Um, I have to, I have to come clean here. I was a major veggie straw hater. And if I'm being honest with you, I was completely wrong. Uh, I tried a veggie straw zesty ranch, veggie straws. Um, I didn't believe they could be crispy. They were very crispy. I didn't believe, you know, that they could be salty and have a good flavor. They were. And you know, very low calorie, honestly, it's, it's, it's a goated stack. Um,
00:02:01
Speaker
I'm sorry. I don't know what to tell you. Well, they're like 90 percent. They're 90 percent potato starch with just a little bit of vegetables. spring No, I think that's the secret. The veggies are potatoes. They're healthy. They're healthy. OK, they're healthy snack. They're made of vegetables, which are good. And. um Well, I take a bag of them with me every day when I go to pick my son up from school and that's his like snack on the way home. We're veggie straw-pilled in our house, too. We're veggie straw-pilled in our
Exxon's Natural Gas Power Plant Interest
00:02:35
Speaker
house. and and and I think that's a great segue into our our first news item, which is of course natural gas. We want to talk about AI, we want to talk about data centers, and we want to talk about natural gas.
00:02:47
Speaker
I think this is something that's been on a lot of people's minds recently, right? um And there's been a lot of news in general about it. So Karthik, I think you had flagged up this particular story. um Maybe you can you could tell us what's going on in the world of of natural gas.
00:03:12
Speaker
Yeah, so ExxonMobil has reportedly decided to join the power generation business, but not as a utility. um They just want to build a very large natural gas power plant to power data centers, and we have seen a lot of Interest grow in data centers with the you know AI and of course if OpenAI and their Sora platform for video generating um You know I shouldn't and this video generating platform starts to kick in and and things like that we're gonna see more demand coming and ExxonMobil sees this as an opportunity to cater to this demand by supplying cleaner fuel because most of the data centers today are powered by coal power which powers most of our grids and
00:03:57
Speaker
And so they see this as an opportunity to grow their business. And it's not just ExxonMobil that wants to do this. Executives
Challenges of Powering Data Centers
00:04:04
Speaker
at Chevron have also been seriously considering this as a business opportunity, um which is quite interesting because most data centers directly take power from the central grid. So it's very likely that any power plant or such will be a co-location option. um ah In a slight segue, of course, Google decided to announce this new partnership with Intersect Power where they want to co-locate a data center right next to a power generation source. um So such business models could also be incentivizing ExxonMobil to be part of the data center boom in the world with the the growth of AI.
00:04:44
Speaker
Yeah. And I think it's one of the things where I guess, you know, we've been kind of skeptical. There's been this big push around AI, right? Where it's like AI, we need AI, we need these data centers.
00:04:55
Speaker
And you've even had some people going so far as to say, it doesn't matter. Or if we scale up AI, AI will like solve climate change. So it's like net better to solve, you know just just scale AI as quick as possible. But a lot of this data center demand, first of all, I think that really misunderstands the issue. right Because a lot of this data center demand is not coming from AI. The majority is not coming from AI. We've seen that data center demand growth historically has been um you know, mostly for regular streaming and all these other applications, right? And it also seems like to me, Gartek, and this is where I'm curious, because you've been talking, you know, I think to some of these these players, it seems like there's a lot of overestimation of yeah of data center demand right now.
Geographical Impact on Utilities
00:05:41
Speaker
Like there's 100 gigawatts of tenders in Northern Virginia for data centers right now, which is like,
00:05:48
Speaker
We know that that's not all going to get built. There's not 100 gigawatts of worth of equipment to go around. There's not the chips. there's not Most of these people are probably not credible. So I guess like I'm curious, you know just just starting off, how real how much demand growth is is really real? And you know what can we kind of expect in terms of of actually, I don't know,
00:06:10
Speaker
Really seeing that that come true. Well, from a data center growth perspective, as you mentioned, most of these, you know, one gigawatt, two gigawatt, we're seeing all these big numbers thrown out and they're all very forward looking statements, hoping for the best to happen. And in reality, of course, if you look at the timeline for building a data center, it takes about two to three years. Even if you build a generation facility in two to three years, you're no way getting it online within that period. Like it's going to take another three to four years for it to come online anyways.
00:06:39
Speaker
And not to mention, data center operators are generally very conservative. I think we discussed this in the podcast before as well. So um you know a lot of people are trying to estimate whether there's going to be liquid cooling and immersion cooling and all these technologies that are going to replace conventional cooling methods. Cooling takes up almost half of your data center's energy demand. And people really don't know if those things are going to kick in or not. I'm quite skeptical as well that it's not going to.
00:07:04
Speaker
and so i feel the the growth potential or or the volumes that people are talking about, they're just overblown in reality. I think that's not going to be the case. I think that's true, but I think it's also worth noting that um it's very localized, right? if If all the data centers that were being built were like perfectly evenly distributed across all of the utilities in the US, it would um um it wouldn't be such a big issue. But in fact, they're concentrated in certain areas, right? In Northern Virginia, where
00:07:37
Speaker
you know, was one in one of the places where it's, you know, very close to the internet backbone that that they need to to tap into and so on. And in fact, I was trying to find out what you were talking, I couldn't pull it up, but I read a story earlier this week about there's this rural electricity co-op in the you know Virginia area, near Northern Virginia, that um you know and and several people are looking to build data centers in that area to the point where the the projected data center demand over the next five years could like be like double or triple what their total current service volume is because it's a small rural electricity cooperative and somebody wants to put a big data center there, it's an overwhelming ah sort of increase.
00:08:21
Speaker
Um, so I get where, you know, some of them, you know, that's an extreme case, but you know, Dominion energy, the big, the big utility in Virginia is, as you know, talked a lot about how, uh, how much stress this is putting on, on, on their system, trying to serve all this new data center demand.
Natural Gas and Climate Considerations
00:08:39
Speaker
And, um, you know, just by the nature of, uh, pardon me, but just by the nature of the utilities, um,
00:08:48
Speaker
you know, comfort level with the technology and the maturity of the technology, the simplest way to do it is to build natural gas ah power plants. And the real reason, and it's and it's pretty cheap, um and the only real reason not to do that is because of the climate impact. So it's it's sort of pretty natural to me that somebody would come along and say, well,
00:09:11
Speaker
The solution obviously is just to build a natural gas fire power plant and slap some carbon capture on it, bada-boom bada-bing. There's your clean energy for your data center. Yeah, I would also say it's it's quite interesting you mentioned that. But typically what i when i would when I think about an oil and gas company, I think about them supplying natural gas to a utility and the utility powers this.
00:09:33
Speaker
But if now they're thinking about building their own natural gas power plant, it'll likely be a ah behind the meter you know microgrid that they want to build now, which is completely different because first of all, I'm not sure whether they have gas grids everywhere in new places where they want to build data centers. um Potentially there is. And even if they do then, and they want to you know manage the carbon as well, then do they have infrastructure to transport that carbon or sequester that carbon? I'm not sure if places really have that. Maybe Exxon has pinpointed strategic locations where that's possible? Yeah, I mean, I think a lot of these two data centers are literally just looking to build their own on-site. And it's you know it's not so much a, you can look at it as a microgrid, but it's just basically one plant, one source of power and one source of demand. It's a very simple grid. You've got a power plant, you've got one cable that goes over to the yeah to the data center. So um I think a lot of that, no, I'm sure many of these also have
00:10:30
Speaker
backup and ah power and and maybe maybe a connection to the to the public grid, as ah as as as a at least as a backup as well. But and the the grid complexity is probably not as big of an issue for them.
00:10:46
Speaker
I wanted to ask about the sustainability aspect of this that Mike already kind of brought up. um What does you know slapping carbon capture on a natural gas plant actually mean in practice? How does that work? How does that offset? um And I guess just a broader question about, do you see this as a movement away from um you know There was originally talk about um trying to connect data centers with renewable sources of energy. There was talk of nuclear. There was talk of other renewables like solar. And do we see do you see this as a movement away from kind of sustainability goals? Or do you see this as also moving towards sustainability in a way?
00:11:29
Speaker
I mean, in a way, right? it's um yeah If they were totally moving away from sustainability goals, they would just build a natural gas plant and not bother with the carbon capture, right? And you could even hand wave about that and say, like, oh, well, natural gas is better than coal. As fossil fuel sources go, it's arguably lower emission.
00:11:48
Speaker
um it's a you know So I think the this and and again i think the the reason for maybe climate optimism about this is, you know, one, there actually are these data center suppliers are willing to invest in the extra cost of carbon capture. um And that could be something that helps as as we've seen with and and talked about in the context of other technologies like nuclear and geothermal, the willingness of the the big hyperscalers, the big data center.
00:12:17
Speaker
um providers and users to to pay for cleaner energy could be a real boon to help scale up some of the this technology. So if ExxonMobil or Chevron, whomever it gets very good at building these natural gas with carbon capture plants because of their data center customers, then the youke we could see the costs come down to the point where it becomes a more ah more economical option for for other industries as well.
00:12:44
Speaker
you know Obviously, there's still issues with gas drilling and fugitive methane emissions are a big worry with respect to anything involving natural gas that has a big ah climate effect. um But I think that the um you know you wouldn't want to see this type of model, natural gas but with carbon capture, displacing renewables where where renewables are relevant. but You know, I think in situations where um there are going to be situations where, at least in the sort of near to medium term, you can't realistically power ah with renewables. And, you know, that'd be the optimistic case. Kind of getting getting good at this technology and this this type of infrastructure could definitely be beneficial for other industries too.
00:13:32
Speaker
Yeah, I think that's, to Mike's point, the timeline is the key challenge, I think. So I don't think people are really shifting away from nuclear or renewables. I think people just realize that natural gas is the easiest way to power data centers that are coming online in the next five years. Because you can't wait for you know obtaining permits or grid connections to run your solar plants and such. And you're not going to wait for 10 years after building a data center for two years to get a nuclear power plant online. So what's the easiest way to make near-term demand and I think this in general lies in with the near term focus most companies are having in terms of innovation and just meeting near term goals and and catering to near term needs. um So I think that's just the trend that this also falls under.
Cost and Technology Challenges in Power Solutions
00:14:17
Speaker
Yeah, I think it's, you know, when you look at these companies like Microsoft, I think there's a big split, right? Because it's easy to say, oh, but we have these these big hyperscalers, right? Microsoft, Amazon, Google, and they have these very ambitious goals, right? But there's also a lot of like intermediary companies who are sort of the companies building these plants, the companies like everyone in crypto, right? That's a lot of data center demand.
00:14:42
Speaker
ah you know, there's a lot of different groups within this. It's not just these big hyperscalers. And when you look at hyperscalers, you know, it's like, Oh, wow, they're like really committed to, to doing this, right. um But That's only one part of the ecosystem, right? and so well thats not i mean and And the whole data center ecosystem itself is only one part of demand growth. I mean, I think the recent IEA report said that if if you look at all the sources of electricity demand growth over the next five years, data centers is maybe five to 10% of that.
00:15:20
Speaker
And then there's you know buildings, heating, cooling, there's electrification of manufacturing, there's electric vehicles, there's you know electrification of heat pumps and things like that. So there's you know again having and ah another good option even beyond sort of the data center market.
00:15:40
Speaker
having an option for for affordable low carbon electricity would be would be would obviously be be better and would would have a bigger impact beyond beyond just the data centers. Yeah. And even from an affordability perspective, we just did a quick LCOA analysis internally at Lux. And some of our initial results are suggesting that even if you apply a carbon tax of about, so we assumed a carbon tax of $80 per ton. So we're not assuming carbon capture, but a carbon tax.
00:16:10
Speaker
for emitting carbon, ah a combined cycle gas turbine running on natural gas is much cheaper to operate than even, for example, something like a fuel cell as a prime power source, even if it reduces your emissions in half. Like everything else is just too expensive ah from a cost perspective. And my worry with other technologies like nuclear and stuff is that because the timelines are so high,
00:16:36
Speaker
If people really want to make that switch on your carbon tax or or let's say the cost of carbon capture becomes so high that people want to switch to something that's lower emission like a fuel cell, ah because of the near term nature of the problem, people would start deploying fuel cells and other low carbon technologies at scale and they get cheaper than what they're right now.
00:16:55
Speaker
and so nuclear will Anyways we expect nuclear to be expensive but what if nuclear just remains so expensive that even 10 years down the line a fuel cell is cheaper to deploy. So there is a risk for these expensive technologies in my view. um But maybe I'm the only one on the fuel cells bandwagon. Maybe fuel cells is a lost cause.
00:17:17
Speaker
I'm not on the fuel cells bandwagon. Renewables plus storage, sure. Fuel cells, I don't know if that's the route. I mean, it's particularly with batteries getting cheaper. I don't know if that's the route. I mean, it'd be interesting to see how that maps out to a solar plus storage instead.
00:17:36
Speaker
Yeah, I think the reliability would be key there, right, Anthony? Because solar plants need to be so huge, if you have to have the same level of reliability that a fuel cell plant or a natural gas plant can give you. So maybe land acquisition and and these factors play a role in making this thing maybe not the cheapest. Yeah, I mean, I think it's, I do think it's reliability as part of it. I think that
00:18:04
Speaker
It's less about reliability per se, and more like if you have a hundred, it's like aerial concentration is the way I think about it. yeah We talked about this in the context of electrifying a refinery, right? Refinery complex, you have a bunch of them in Houston. You need a ton of area, a land area, right, to actually get enough solar to power all those.
00:18:25
Speaker
And that means, you know, shipping the energy kind of a long distance away. And Houston's the best case because you're sitting right below the biggest wind and solar valley in America, right? For Virginia, it's just like, well, there's not that much area to put solar panels, right? And, you know, it's not the most, it's not the worst region for solar, but it's not the best region for solar, for sure. You know what I mean? um Yeah. So it's just like,
00:18:53
Speaker
Yeah, the opportunity to do.
00:18:59
Speaker
I don't know, to make these these big investments in solar, it's just kind of limited. it's it's yeah I was thinking about, um one of our colleagues did a you know presentation on SAF, and they're talking about, yeah, it's like HEFA, this waste-based fuel, you can make that work. um There's just not enough waste to even go around, right to to actually even, um you know to even do that, right to to even if you wanted to scale HEFA, you just couldn't do it, basically, with that you know with the waste that's available.
00:19:43
Speaker
Yeah, and I think the other thing that's, and this is maybe getting a little galaxy-brained, but but ah that I was thinking about with respect to this this type of solution, that I think is sort of a climate at risk with it.
00:19:55
Speaker
um ah you know People with the data center boom that's been going on for the last couple of years, there's been a lot of concern about the natural gas, using more natural gas, burning more fossil fuels. And one of the reasons i've I've not been as concerned about that is because of the the economics of natural gas.
00:20:15
Speaker
power plants are such that the the capex, the the cost of building them is really relatively low. That's part of the reason they're attractive for for building this, you know, for for addressing this data center demand. A lot of the cost is in the operating expenses. So, building a natural gas, you know, but mostly the fuel, the gas itself. um So, it's mostly objects.
00:20:38
Speaker
um you know One of the reasons that, and so if you know even if you you you build these plants, you're not necessarily sort of locked into them if if solar or wind or nuclear or whatever other source becomes cheaper or viable. You haven't got that much capex locked up in this plant. It's not that big a deal to switch to another source. So I don't don't think that the the natural gas, you know building a natural gas plant um necessarily locks you in to to relying on on natural gas power. The way, you know, another type of investment, right? Like if you invest in solar, right? That's all CapEx upfront, very little lot back. So like you are definitely going to want to to use that to recoup as much as possible to recoup your costs. yeah Now, if you're building a natural gas plant and you've got carbon capture added to it,
00:21:31
Speaker
You know, you've kind of increased the investment that you've you've made in this and, you know, both in terms of the, um you know, and even though carbon capture is also kind of relatively OPEX heavy.
00:21:46
Speaker
um You've kind of committed yourself more to continuing to use this plant, I think, because you don't have maybe as much of an emissions reduction motivation to switch away. um It does tend to be the thing that I think will prolong and encourage the use of natural gas by virtue of building it with carbon capture, um maybe more so than been building it without carbon capture would people will be less likely to switch away from it. And then you still do have all those kind of surrounding worries about methane, you know, fugitive methane and things like that. Well, I would I mean, I got to be a pain in the butt. But does carbon capture like even work with natural gas? Like, is there a successful operating carbon capture natural gas, like operating plant? You know what I mean?
00:22:41
Speaker
the The article says there are currently no US natural gas fired plants with carbon capture technology. So not in the US. I don't know if there are elsewhere, but that was a question I had as well. like um why why Is this technology like brand new? is it that why Why doesn't it exist in the US already?
00:23:02
Speaker
So this is my theory basically, which is like certain technology, what is the the role of carbon capture? The role of carbon capture is to allow people to continue to build natural gas plants, right? And so like, like the fact that it works or doesn't work, I think is sort of, and I don't want to say it's immaterial, but you know, people are not Like, they want to build an, app you can just build a natural gas plant and you can just say, oh, we're going to put carbon capture on it. You know what I mean? And like, that's kind of all you have to do. Like, I don't think anyone is going to check. Hey, get off our backs approach to, uh, like, is it like, what's the con if you build a natural gas plant and then you don't follow through on the carbon capture, there's no consequences, right? Nope. So it's, it's just like another, you know, fake corporate pledge basically. Right. Um,
00:24:00
Speaker
It's like putting all natural on a packaging label and you know yeah just defining what that means on your own terms. so like I guess I wonder, is it is this just something that they're saying to to make it appear like they're moving towards a sustainable solution? Yeah. I mean i think i think we have every reason to think that it's BS and we have zero reason to think that it's real. Until someone actually builds one of these plants, man, why would we believe Why would we believe corporate voluntary sustainability pledges? right Which is what this is. right um like why wouldt you Why would we believe that? You know what I mean?
00:24:40
Speaker
yeah I would actually
Data Centers' Voluntary Carbon Reduction Efforts
00:24:41
Speaker
add that to Amy's point, I think most of these companies, the reason why they're actually data center companies, i mean the reason why they are switching to these low carbon initiatives is voluntary completely. like There is no regulation in the United States that says data center operators have to reduce and report their scope to emissions. That only exists in the EU and that started in July this year. um and so There are really no consequences to even burning carbon.
00:25:07
Speaker
um A lot of utility companies in the US are even willing to extend the life of their coal plants, just so that they can continue powering data centers, ah because i know there are no consequences to doing that. So I think the reason why they want to talk about carbon capture and stuff is to just show that We do care just to show that they care. And I feel, and and maybe you will know about this more than I do, Amy, but um at least our understanding is that there is always um a negative consumer perception towards data centers, like a lot of NIMBYs and a part of that, not in my backyard mindset is what is powering my data center and where is all that energy coming from? So I'm not sure if you have seen that, but that's also one of the reasons why I think these companies are voluntarily willing to go ahead with this.
00:25:52
Speaker
Yeah, I think like consumers have have expressed concerns about the the amount of energy that the data centers use. Of course, they want to continue using data and all of the technology. But there is a concern that it's, um and I think it's especially linked with AI, even if in reality, AI is not the only a thing driving the increased demand in in data centers. But um I think there are definitely as concerns about ah that energy needs are increasing as opposed to decreasing and um concerns about the stability of the the power system overall and whether or not there's going to be increased blackouts or brownouts and things like that. ah but going Going back to the natural gas part, Anthony and Mike, just a question from my side. I mean, they don't even need carbon capture even if they're going with natural gas, even if they have emissions controls commonplace because they could just say, hey, we are waiting for hydrogen to get cheaper and then we just replace the combustor.
00:26:50
Speaker
and run the gas turbines on low carbon fuels. So they don't even need carbon capture. So I think it gives them two avenues to pursue depending on how the regulation shifts. What I wanted to say was instead of necessarily going ahead with carbon capture, maybe they can just decide not to go ahead with carbon capture and say hydrogen has now become cheap enough for us to use. So we just replace the natural gas combustor with a hydrogen combustor or with any other low carbon fuel. And we say that, yeah, now the gas turbine anyways is fuel flexible and it can run on any fuel. So we don't have to worry about installing a carbon capture system.
00:27:25
Speaker
Well, I don't think it's that trivial to switch a natural gas. I mean, it's it's in theory possible. I don't think it's that trivial to switch a natural gas turbine over to to burning hydrogen. And I don't think that's going to likely to be a very, I mean, especially if you want to use ah clean hydrogen, you know, ah that's that's a very very inefficient way to use it, um you know, across the across sort of the whole life cycle. I mean, like, I suppose I'm sure there's going to be instances that come out of of companies that say they're going to build clean power, ah whether and whether it's renewables or whether it's um natural gas with with carbon capture or or or whatever that that end up not following through on that. um I do think all indications are that many of these companies, the Googles and Microsofts of the world, like genuinely care about sourcing low carbon power for their their data centers.
00:28:22
Speaker
And they've invested a lot in PPAs and and other things for renewables and in in doing that. um you know And I think a company like that is probably fairly unlikely to, while they might use natural gas as much as they feel they need to, they're probably not as likely to go out and make a big announcement about, oh, we're going to use natural gas with carbon capture and then actually not bother with the with the carbon capture point. Like just from a PR standpoint, I don't think they're going to bother with that. and um
00:28:54
Speaker
Yeah, we'll see. I mean, the the natural gas, I don't think there's you know natural carbon capture in a lot of other contexts has been deployed. There is a facility in the UK that's working on NT side, that's that's working on it's building a natural gas plant with with carbon capture that's that's going to launch in the next, that should open in the next couple of years. I don't think there's any major technical reasons. I mean, carbon capture as a technology has its own challenges.
00:29:23
Speaker
in in bringing down costs. But I don't think there's any like major technical reason that you can't do carbon capture on a natural gas power plant you know about as well as you could do on coal or on a steel mill or on a um cement facility or or any of them um ah the other types of kind of major industrial point source emitters that people that people use it on. So you know I wouldn't dismiss the concern about sort of greenwashing here. I'm sure that'll that'll happen.
00:29:51
Speaker
in some cases too, but I think, um you know, if it turns out that there are customers for this, I think they probably will be able to successfully build natural gas with carbon capture plants and and you'll see those get deployed.
00:30:05
Speaker
In the like the last few weeks and maybe a month or so, there have been like an increased number of ads in Canada led by, I think it's the Alberta government and some of the energy ah ah companies promoting oil and about how it's fundamental for our economy. I even just got an ad about the benefits of oil and gas on my Instagram the other day. so like there's there's definitely like Let me just see.
00:30:38
Speaker
Yeah, there they're there. Sanovus is one of it the companies that's promoting these ads on Instagram. I want to see the Alberta pro oil and gas tickets. Anyways, I just, I feel like there's like this push to war from the industry ah towards oil and gas as well. And I don't know if that has anything to do with, with this. I think they're, they're trying to influence public perception as well as, um,
00:31:06
Speaker
I mean promote, maybe promote alliances and yeah. Anyways, this is a Canadian thing. I don't know if it's going on in in the US, but it was just, it's just interesting that this has been coming up lately.
00:31:22
Speaker
And so it's, yeah, one of the ad reads, without a strong oil and gas industry, we'll all get less for our dollar. um okay And there's like, you know, concerns about terrorists being slapped on Canada. And we, we export a lot of our oil and gas to the US. And so like, there's, there's definitely like some political reasons for this as well. So anyways, I don't know if it's, I don't think it's necessarily linked to this data center issue, but anyways, I just thought I would mention it.
00:31:51
Speaker
Yeah, no, it is. I mean, you've kind of I think that's reflective of, you know, the oil and gas industry, at least in the US context that I know has always been, you know, there is, of course, as with any industry, there's PR element of it. And it's it's been um
00:32:12
Speaker
you know, more focused on showing like, oh, we're doing stuff with ah renewables too, or we're we're doing stuff with algae and, you know, or whatever whatever it is to kind of emphasize there.
00:32:24
Speaker
you know like, oh, we're cleaning things up too. um But I wouldn't be surprised if you know for political reasons in this era when the you have an administration coming in that's very kind of explicitly and openly ah pro-oil and gas and want you know wants to see that type of um that type of argument and positive argument in favor of fossil fuels. If you you start to see more companies embracing that as on ah on a PR front as well. So this begs the question, Anthony, will you be using the solar platform to generate some cool AI videos?
Skepticism Towards AI's Necessity
00:33:02
Speaker
No, I don't use AI for anything, man. Even if it's powered by solar and nuclear and natural gas with carbon capture. Well, it's just, except of course for the Luxor Virtual Resource Assistant, which
00:33:15
Speaker
i love I love using everything. Except except for the Luxor virtual research system. um No. um no it's The problem with AI, if I'm being honest with you, is not just that it's ugly or whatever. It's that the stuff is just not good. like It's just not good. What would I want to use Sora for?
00:33:42
Speaker
like
00:33:45
Speaker
There's no use case for AI. Well, you can create an NFT with a cool video. Oh my god. I love to create NFTs for real.
00:33:56
Speaker
Yeah, I was wondering, like, is Sora, is this meant to be mainly for entertainment purposes? Like, it's a fun thing that people are going to do in their spare time, like make fun videos? Or is it meant to be used in the business context? Is it? Yeah, I guess that was my question because I was thinking this is like way back to when I was in college.
00:34:17
Speaker
But the university and like there were all these, you know videos that came out where you could Insert your face and you'd have like the Christmas elves dancing and it was like a fad Mike knows all about mike loves to make those of me Share them in the company slack. That's great. Thank you. Yeah, like those are all the rage right and like those are fun and um But, you know, then it kind of the the novelty wears off and then you move on to something else. And like, I guess I'm wondering, like, is this what Sora is meant to be like a fun tool to use or a are they envisioning it being like something that's going to be fundamental for how we create content in the future? I'm not sure. I mean, I think they want it to be this fundamental thing. I don't think it will be.
00:35:09
Speaker
but I think they could plan use cases in things like medicine, education. and So a teacher could just type up prompt, show me the cross section of a human body with a heart pumping and show the different veins and stuff. Like you don't really need models anymore.
00:35:24
Speaker
Uh, you could see things like that perhaps with this. Except i I did watch a video someone had made using Sora of a, of a gymnast doing one of those, um, Matt routines. Like I can't remember what those routines are called, but the, the anatomy of the body was totally wrong.
00:35:41
Speaker
And so I don't like medical uses might be kind of risky if it can't, you know, it can't depict a human doing a backflip accurately. I don't know if we would want to trust it showing the anatomy of a heart or perhaps the current version of Sora is quite bad when it comes to understanding physics and how things move and things like that. So of course, room for improvement. Sam Altman, if you're listening to this, please get that corrected. Thank you.
Podcast Conclusion
00:36:11
Speaker
On that note, if you like this podcast, you can check us out, www.luxresearching.com. Lots of great stuff, blogs, webinars. We're doing a whole series on data centers coming up, so check that out.
00:36:27
Speaker
And yeah, we'll see you next time. innovation matters is a production of luxs research the leading sustainable innovation research and advisory firm you can follow this podcast on apple music spotify or wherever you get your podcast if you want more check out ww ww ww dot luxresearchinc dot com slash blog for all the latest news opinions and articles so