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(0:00) Scott Bessent, Treasury Secretary
(17:44) Doug Burgum, Secretary of the Interior and Chris Wright, Energy Secretary
(35:11) Howard Lutnick, Commerce Secretary
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Winning the AI Race Part 4: Scott Bessent, Howard Lutnick, Chris Wright, and Doug Burgum Podcast Episode Summary
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Winning the AI Race Part 4: Scott Bessent, Howard Lutnick, Chris Wright, and Doug Burgum Podcast Episode Transcript (Unedited)
Speaker: 0
00:00
Secretary Bessant, it’s, wonderful to see you. Before we maybe deep dive into AI, do you wanna give us, the high level update on the three three three plan? How are things going? You you had an incredible clip, by the way, with Maria Bartiromo where you talked about some of the things that were happening economically.
Speaker: 0
00:19
Maybe just level set everybody on what’s going on.
Speaker: 1
00:22
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So just just for good framing, during the campaign, the IDA three three three plan
Speaker: 2
00:28
I think his microphone’s off. Can we get the microphone on for Scott? Test test?
Speaker: 1
00:32
Test. There it is. Perfect. Okay. Good. So I had a plan that I I called three three three, and the idea was to get the budget deficit, which was running about 6.7% of GDP under the Biden administration, highest that we’d ever had when we weren’t at war or in a recession down to 3%, three plus percent economic growth on a persistent basis and to create 3,000,000 more barrels of energy equivalent, so oil and gas before president Trump leaves office.
Speaker: 1
01:10
And, look, we’re full speed ahead. We had the first June was the first positive June for the Treasury since 2015. We actually had a surplus and we did that in a good way. We took in more revenues, some from tariffs, and we brought down spending. And when Ai think about what we can do here, what I’m really excited about is the idea with AI that we can go back to the paradigm.
Speaker: 1
01:48
When Ai was younger in the nineties, Alan Greenspan was able to run the economy very hot in the ai. And because, you know, it was the IT boom, and we had this very powerful noninflationary growth. And I think that there that it’s highly likely we could have that now. And so that kind of growth would bring down the deficit very quickly.
Speaker: 0
02:21
You, there’s been a lot of talk today about the amount of CapEx spending that needs to go into AI and all of the jobs that it creates. And you, posted as well, actually, a couple days ago and you talked about that there’s just been an inflection point that you’ve seen in CapEx spending sort of as a steward of The US economy.
Speaker: 0
02:39
Can you tell us about what what’s happening?
Speaker: 1
02:42
So it it’s combination and it it’s a barbells. So, I I’ve been in Pittsburgh twice in the past four weeks. Four weeks ago, I went with president Trump when he announced the US Speak Nippon Steel deal, substantial investment by Nippon Steel into an old, very important industry.
Speaker: 1
03:05
And then last speak, on Tuesday, there there was an sai summit in in Pittsburgh, all the big players, and pit Pittsburgh Berg is a natural location, for Ai, lots lots of cheap energy. Carnegie Mellon, Pitt, are there. And so it was very interesting to see the juxtaposition there, But we are seeing, this incredible capex.
Speaker: 1
03:33
The hyperscalers have obviously been in an arms race, kind of, you know, the big five, the big seven. We estimate that that is approximately 1% of GDP a year. Wow. So $300,000,000,000 Wow. That’s being spent on AI. And in my perfect world, which never happens, we would go through this big CapEx boom.
Speaker: 1
03:58
And then ai in ’26, the CapEx boom would hand off to a productivity boom. Mhmm.
Speaker: 0
04:06
And it’s an incredible thing because it’s sort of you mentioned alluded to this a little bit earlier, but it does violate a lot of economic theory in the sense that it just hasn’t had the negative pernicious effects. Do you think is that is that a yet thing, or do you think that we’re in a structurally different kind of economy now?
Speaker: 1
04:25
You mean the AI boom? Yeah. Well, look, we we’ve seen, throughout history that technology can can drive these things. If you go back I’ll talk about the ones I was around for. I was not around for the railroads, but 08/08/1988 but I I used to teach economic history, eighteen eighties, eighteen nineties.
Speaker: 1
04:47
The the railroads made it 10 times faster to cross The United States. We had this incredible productivity boom. It was the gigantic GDP growth, and it was disinflationary. So imagine ai having double digit GDP numbers, and inflation was minus two, minus three, minus 4% just because the costs were coming down.
Speaker: 1
05:13
Then in the 1980s, under Reagan, we had what I would call a deregulatory boom because hard for anyone, everyone in this room to remember, but everything used to be regulated. You know, price of airline tickets, the, telephone bills, banking services. So, ai, we had a deregulatory boom.
Speaker: 1
05:40
You know, Paul Volcker brought down inflation, but it was also the deregulation. ai, which I previously mentioned, we had had a electronic buildup and then finally it kicked in, especially in office work. And that led to a big productivity boom, and we paid down paid down the national debt.
Speaker: 0
06:08
Right. You know,
Speaker: 1
06:08
I mean Had
Speaker: 2
06:09
a surplus.
Speaker: 1
06:10
We we had a we we had a surplus, and, I mean, it it seems crazy. I found a paper the other day that people were wondering, well, what are we gonna do if there aren’t any government bonds?
Speaker: 3
06:21
But we didn’t have the level.
Speaker: 1
06:22
But we fixed that. They’re plenty of government bonds. But I I I do think there’s a chance now that we could have this growth acceleration, and if I’m shooting for 3%, but I I can tell you the trajectory of the debt path, really changes. And if we can also, have lower interest rates because it’s noninflationary, and I I I think the Fed’s gonna have to be open to this idea.
Speaker: 3
06:54
So let me ask two questions on that. The first is that that the examples you gave, we didn’t have some of the tariff that since we last talked, several of these trade deals have been negotiated out further. You have better clarity probably on what the tariff rates are gonna be.
Speaker: 3
07:07
What do you estimate the dampening effects on the growth rate to be, if any, associated with the the tariffs in those trade deals? And, second is, we’d love to hear your point of view on ai report of sold selling half of their US treasuries, ram where’s the arya for treasuries sana ai fall over time here.
Speaker: 3
07:25
Two so two parts.
Speaker: 1
07:27
So,
Speaker: 3
07:28
To address the interest rate.
Speaker: 1
07:30
Meh. So I I think that, in terms of the well, I’ll I’ll I’ll take the second one first. We we expect that that the Chinese will slowly divest, but with the passage of the Genius legislation last week, I I think that we could see several trillion dollars of demand for t bills because the way the legislation works, it it’s under ninety days.
Speaker: 1
08:02
And I I think that that’s really going to lock in the US dollar in terms of individuals on the street and whether it’s Nigeria, Kuala Lumpur, are arya sana be using US backed stablecoins. And if I think about the alternative, if you think about a central bank digital currency, China, Euro, or ECB, or even Canada, a lot of you will remember during COVID the Canadian government, they didn’t like what some truckers were
Speaker: 3
08:43
doing,
Speaker: 1
08:43
and they seized and froze their bank accounts. So with a central bank digital currency, you could put out a meh tweet, not that any of you would, but if you put out a mean tweet No
Speaker: 3
08:55
one up here is known for doing that.
Speaker: 1
08:56
Ever.
Speaker: 0
08:57
Yeah.
Speaker: 1
08:59
That if you have a government backed, then they they can shut you down as opposed to this kind of unbridled, choice that consumers are gonna have for US dollar stablecoins.
Speaker: 3
09:16
And on the first question about growth rates being hampered by tariffs, is is the revenue you’re seeing offsetting effectively the rates
Speaker: 1
09:23
that We we we haven’t seen that meh, and I I think there’s a good chance that we could see so if we think about Ai, so China’s ai Ai has a high tariff rate. It’s 30%. The Chinese business model is ai the the brooms and the water buckets from Fantasia. They they they just keep they they just keep going.
Speaker: 1
09:48
And it it’s an it’s an employment agency. I’m ai. So they they will just keep cutting costs to, maintain market shah. So so we haven’t seen that thus far. And a lot of the other foreign producers have, cut cut price to maintain market share.
Speaker: 1
10:14
A lot of The US companies have, eaten into their margins to maintain market share. And then but the other thing we’re seeing is the tariffs are creating the onshoring. Mhmm. So you might have seen can’t remember whether it was yesterday or the day before. AstraZeneca said that they were gonna build
Speaker: 0
10:36
50,000,000,000.
Speaker: 1
10:36
50,000,000,000 Incredible. Plant here. So we’re we’re seeing this this big onshoring move that I think can accelerate all that. Sai, yeah, I I think there’s a very good chance that we see just like with AI, we’re seeing now we’re in the construction boom phase, then we’re sana be in the use case.
Speaker: 1
11:00
Right. I I think we could have this massive construction boom, and then the factories get populated. And part of President Trump’s one big beautiful bill, the most powerful part of that is the 100% immediate expensing
Speaker: 3
11:19
Right.
Speaker: 4
11:19
Of
Speaker: 1
11:19
equipment, and we also did it for factories. So not only are we trying to make The US the the best destination regulatory wise, we’re also making it tax wise. So you you can immediately write off all the equipment. For the next five years, you’re gonna be able to write off the factory structure.
Speaker: 1
11:42
And then I I saw secretaries, Bergam and Wright, and we’re going to have cheap energy Yeah. Which seems like a pretty good combination.
Speaker: 2
11:52
Should the Fed remain independent?
Speaker: 1
11:54
Sorry?
Speaker: 2
11:55
The Meh. Should it remain independent? Should, Trump replace the Fed chair? You know? And you guys seem a bit frustrated with him. What are your thoughts there? Because you guys have done such a good job in terms of the confidence in the markets. CPI went up a little bit in June, and it does seem like the economy is very strong and people are very confident.
Speaker: 2
12:14
So then, poly arya is showing no rate cut is the most likely case in September. So how do you think about the Fed?
Speaker: 1
12:21
Well, I I think if you if you look the the Fed publishes something called the summary of economic projections, and it’s it’s pretty politically ai. But we’re we’re seeing that we could see one, two rate cuts this year. And I think that once we see over the next one, two months that the tariffs haven’t been inflationary, and Ai Ai I have breakfast with Chair Powell almost every speak, And, you know, I just keep saying that a one time price level increase is very different than the notion of a persistent inflationary spiral.
Speaker: 1
13:05
I think that we used to say TDS was Ram Derangement Syndrome. I now say TDS is Tariff Derangement Syndrome.
Speaker: 3
13:14
Right.
Speaker: 1
13:15
And when you think about it, the market crashed, then it had the fastest recovery in history. Over a fifty four day period. We’re back at a new ai. So Ai think the market’s looking through all this to next year with the productivity boom. And to to the question, I think minimum on a forward twelve month basis, we’re sana take in at least $300,000,000,000 in tariff income.
Speaker: 3
13:44
Yeah.
Speaker: 2
13:45
Are they punishing you in a way for maybe the rollout of the tariffs was, a little bit shock and awe or a little bit, effervescent, however you sana describe it. It was pretty intense. Is the Meh sort of punishing you for that in your mind?
Speaker: 1
14:00
No. I I think that they’re they’re just stuck in in an old way of thinking.
Speaker: 4
14:05
How much
Speaker: 2
14:05
should they cut?
Speaker: 3
14:06
What
Speaker: 2
14:06
should they how should they think?
Speaker: 1
14:08
Well, Ai only sana talk about the mistakes they’ve made, not the mistakes they’re going to make. Ai, Ai I I do think vatsal at a point, they’re just going to have to ai of admit that they have have been wrong. Because if if you think about it, Ai don’t believe that a tariff is a consumption tax. Right. Right.
Speaker: 1
14:32
But if tomorrow we put on a 1% consumption tax, you would never say that’s 1% inflation.
Speaker: 0
14:39
That’s right.
Speaker: 1
14:40
Right? So sai I I am I am hoping that, in in their infinite wisdom that the I can’t remember, it’s bryden PhD economists, which, I I said on TV yesterday or the day before, my worry is that the Fed is turning into universal basic income for PhD economists. Ai? That I I I don’t know what they do. They’re never right.
Speaker: 1
15:09
If you if you were to
Speaker: 2
15:11
Maybe you should double the number of PhDs. If you go to 700, they might get it right.
Speaker: 1
15:15
Well, look. Sai mean, if you were to look at the central value tendency versus how they’ve done, it it’s shocking. Right. It’s shocking. You know, I I said, like, if the air traffic controllers did did this, no one would get in an airplane.
Speaker: 2
15:28
They do seem to put a little tail to it on everything. Yeah.
Speaker: 0
15:30
Last last question maybe as we wrap this up. Secretary, as a economic historian, maybe just very briefly tell us the lessons of these previous economic expansions, technological booms, what we need to learn from those things, whether it was railroads or whether it was the agrarian revolution or the industrial revolution, so that we don’t screw up the AI revolution.
Speaker: 0
15:52
What are the few critical things we need to do right?
Speaker: 1
15:54
Well, I I think the most important thing that that we are doing is getting out of the way and setting the the conditions for it because I I would say one of the surprises that I I’ve had, and I’ve had a lot of them, when I went from civilian to public servant, has been that in The US, we’ve made it so hard to build things.
Speaker: 5
16:21
Right. Right.
Speaker: 1
16:21
And it’s just very frustrating. I I’m sure Doug Doug and Chris will talk about it, but this ai, TSMC wants to build a gigantic fab system in Arizona, and I I think it might be able to produce up to 7% of the chips that The United States needs. And they’re dealing with local building inspectors. And, you know, evidently, like, these chip design plants are moving so quickly.
Speaker: 1
16:56
You know, you you’re constantly calling an audible, and you’re saying, well, like, three months ago, it looked like this, but in eighteen months, we’ve now decided it needs to look like this. And you’ve got someone saying, well, you sai the pipe was gonna be there or not there. We’re shutting you down.
Speaker: 1
17:14
Sai and just the level of permitting, we always talk about how I Sai think I meh have even talked about it on your podcast, how Germany had deindustrialized. Right. We even made the decision to deindustrialize through our environmental regulations, and I think the most important thing we can do is make it easy to build things again and, sai out of the way and not overregulate.
Speaker: 0
17:45
Secretary, thank you.
Speaker: 3
17:46
Thank you very much. Thank you, guys, for being here. I know it’s been, a rushed afternoon. We did not expect the, the incredible turnout that we’ve had, but thank you both. You’re the chair and the vice chair of the National Energy Dominance Council. We’ve talked at length today about the boom underway in AI.
Speaker: 3
18:06
We’ve talked about this on the podcast, The US, energy production capacity energy electricity production capacity is about a terawatt today, growing to an estimated two terawatts by 02/1940. China’s going from three to eight. They’re adding in America every eighteen months.
Speaker: 3
18:20
Maybe you guys could just give us an update on the National Energy Dominance Council, how that work is going to try and accelerate energy production in The United States to help enable this AI boom.
Speaker: 6
18:32
Well, ai happy to do that. And I, just wanna say again thanks to the all in, for pulling together this amazing, team.
Speaker: 3
18:38
And Hill and Valley.
Speaker: 6
18:40
Yes. And Hill and Valley too. Thanks, Christian. Yeah. We, when when we look back on this day, when historians look back on, the the the challenge of our times, which is, like the summit called winning the AI arms race, I think one of the things they’re gonna conclude is that the reason why The United States won the AI arms race was because of president Trump.
Speaker: 6
18:59
And and I’m not saying that as a political statement. I’m saying that the policy of the Trump administration is more energy fast and an understanding of how important it is, for the AI arms race. And so with that, as you’ve just outlined, we’ve got a huge challenge ahead of us. You know, China, is deploying everything.
Speaker: 6
19:18
I mean, they added 94 gigawatts of coal last year, one gigawatts Denver. They’re they’re 60 over 60% of their power is still coming from coal. They’re just pouring, pouring that on. The Wall Street Journal ran an article yesterday talking about what a great job that China was doing with EVs and with solar.
Speaker: 6
19:34
And I read the whole article. They never mentioned coal. It’s two thirds of their electrical power. And and so then just by definition, I mean, two thirds of the the EV cars in China should have a bumper sticker that says powered by coal. So they are this is a we’re in a race of our lifetime. They’re also doing nuclear. They’re doing hydro. They’ve got no permitting issues.
Speaker: 6
19:54
I mean, they build a hydro dam. It’d be like the equivalent of us putting a dam on the Grand Canyon, what they’re doing on the Yangtze. So we’ve got real competition. We can lead in technology, but we haven’t been leading on electric production. So the National Energy Dominance Council, part of the job that Chris and I have, is helping through cut red tape, produce more electricity, whether it’s hydro, geothermal, nuclear, and and and, of course, l l n g vatsal gas is a key part of this.
Speaker: 6
20:20
And then bringing back coal and making sure that we stop shutting down base load in America, has been a key part of what we’re doing.
Speaker: 5
20:28
Yeah. And just just to riff off that, where United States gets electricity today in bryden, natural gas by far, then nuclear, then coal. Those three sources are 75 of US electricity, and 90% of what matters, which is electricity that’s there whether the sun’s shining or the wind is blowing.
Speaker: 5
20:48
But we had in the previous administration’s plans to remove three and a half gigawatts of ai. We’re gonna stop that. There’s plans between now and 2030 to close to close a 100 gigawatts of power plants. A 100 gigawatts. And we’re stopping most all that.
Speaker: 5
21:06
Yeah, just Ai see the head nodding. Ai? If we need to add a 100 after the meetings they had this morning, I think it’s more than a 100 gigawatts in the next five or seven years. The first thing to do is stop subtracting a 100 at the same time you sana to add a 100. But I think America became great by big bold people making big bold investments. That’s where we got here.
Speaker: 5
21:26
And then we’ve just drifted off track the last bunch of years, and made it so hard to build something, so easy to stop something, and just a crazy love affair with intermittent, unreliable energy sources.
Speaker: 2
21:39
Ai talking about solar. Why are you so down on solar? This is the cheapest thing you can install. Batteries are here, and they’re being produced at an incredible rate. Why ai we so anti solar? Or why are you so anti solar?
Speaker: 5
21:52
Oh, I’m not anti solar.
Speaker: 2
21:53
But why do you keep saying then that, like, this unreliable solar, if you put batteries on
Speaker: 5
21:57
it, it’s totally reliable? If you take all the batteries in The United States, you can store five minutes of power. Ai minutes.
Speaker: 2
22:03
Of the entire country. But if we’ve had many days in California and in Texas where solar has been the majority of it, so why are you so down on solar? It can be the majority on a sunny day
Speaker: 5
22:14
in the summertime. Yeah. That’s not what matters. In PJM, where we are right now, at peak demand this year, 97% of electricity, wind, solar, and batteries delivered 3%. That’s when it matters. If you’re 20% Well,
Speaker: 2
22:29
you’re cherry picking DC? You’re cherry picking DC. Let’s talk about California and Texas. These were very voluminous states in terms of population.
Speaker: 5
22:37
Absolutely. Let’s talk Texas. So the peak demand times in Texas have been cold speak, low they’re high pressure systems in the wintertime. Yep. Wind and solar go on vacation. They’re 35% of the capacity in Texas, 8% of the delivered power at peak demand.
Speaker: 2
22:51
Talking about two weeks. I live in Texas. Yeah.
Speaker: 5
22:54
But but those are the two weeks that matter. Right?
Speaker: 2
22:56
No. The other 50 are the ones that matter, actually. Sure.
Speaker: 5
22:58
In in in in in Yuri, when they weren’t ready, over two hundred people died. We we don’t want people to die. We want the lights to go on when people need them. And and it’s the system cost that matters. If you’re not there at game time, all you are is a parasite on the systems that is
Speaker: 0
23:14
there at any time. Let me redirect this, back to AI because,
Speaker: 5
23:19
Good idea.
Speaker: 3
23:21
Ai idea.
Speaker: 0
23:21
So if you if you actually forecast the growth of just the servers and then the robots and all of these things, we’re sana need terawatts and terawatts. That’s on one side. And so the obvious solution would be to build, ai? To drill, to do what we need to do. And then on the other side is this latent fear that some people have that this will somehow upset the apple cart, sustainability, the climate, etcetera.
Speaker: 0
23:49
How do we create the logical bridge so that people really understand that this is all possible, that this is not gonna destroy the earth and that we can get this abundant energy? Especially because as you guys have said very well, if we don’t do it and somebody else has marginal costless energy, they will de facto win.
Speaker: 0
24:11
So how how do we frame the argument so that people can understand this better?
Speaker: 5
24:14
Yeah. I’ve I’ve been writing and talking about that for twenty years and and you’re a 100% right. And to me, it comes down to the same thing AI is focused on, which is on data and facts. We’ve increased atmospheric c o two by 50%, 100%. It absorbs infrared radiation. It’s been a force for warming. That’s all true.
Speaker: 5
24:32
But if you look at the trade offs on it, it’s not in the top five problems the planet focuses. And what has been the biggest source of decarbonization, not just in The United States, but globally, has been market forces. Cheap natural gases displace coal. And and what what’s what’s a lower carbon energy source? Nuclear. That’s on all the time.
Speaker: 5
24:52
So this administration, all in to get the nuclear industry moving again, natural gas is the fastest growing energy source on the planet. Get out of the way of that. Let natural gas grow. It’s the cheapest source of electricity in The US.
Speaker: 3
25:05
When you
Speaker: 5
25:05
I’m pro solar as well. I just don’t want taxpayers to pay for it. I want businesses to pay for it. But solar’s sana keep growing. Solar’s gonna keep growing.
Speaker: 0
25:12
When you got a nuclear expansion I just wanna talk about nuclear expansion for one second. So, how do we actually build these things faster, have the capability and the, you know, the technical construction know how so that these aren’t fifteen year projects? But also, how do we incentivize the states to basically get out of the way, or ai, you know, these other organizations that can launch the frivolous lawsuits, slow it all down?
Speaker: 0
25:38
How do we do that?
Speaker: 5
25:40
So a lot a lot of regulatory firm things. One, we’re working on FERC. Right? FERC has this inefficient queue system that just gets gummed up with mostly stuff that’s never gonna happen. FERC came out yesterday with a new system where you’re gonna prioritize things that matter. They’re gonna move through faster. You saw the Supreme Court decision on on NEPA.
Speaker: 5
26:00
We gotta get NEPA back to where it was, a process check on the environment, not an avenue for lawfare to stop things and kill things. So there’s structural changes. There’s just common sense reforms. We’re gonna get rid of Clean Power Act two point o that says you’re gonna have to have carbon capture and storage, you know, fifteen years out on any natural gas is what’s gonna power Ai, let’s just be honest.
Speaker: 5
26:22
What’s gonna be the main source of new electricity in The United States by far and away? Natural sai. Just because it’s cheapest, fast, it’s reliable and dependable. Solar is gonna play a role, nuclear is gonna play a role, hydro, geothermal, stop closing coal, lots of pieces, but it’s dominantly gonna be natural gas.
Speaker: 5
26:38
It’s the fastest growing energy source, not just in The US, but in the whole planet. There’s a reason for it. It’s cheap, it’s massively abundant, It burns clean. The machinery lasts longer than machinery burning oil or coal or something else. But it’s a meh businesses.
Speaker: 5
26:54
Doug and I are not here to tell anyone what to build and what not to build. We’re here to get roadblocks out of the way so capitalism and and consumers and investors can decide what happens.
Speaker: 2
27:05
Solar is cheaper than coal plants. Right?
Speaker: 5
27:07
So
Speaker: 3
27:07
Okay. So some some of the, some of the the the the Just
Speaker: 2
27:11
a fact.
Speaker: 3
27:11
The scalability of nuclear Meh
Speaker: 5
27:13
is simple as that.
Speaker: 3
27:14
Meh. The scalability of nuclear, I think, is unbounded. And what we’ve seen in China in the past couple of years is these generation four nuclear reactors. This pebble bed reactor is probably the most elegant, beautiful energy system designed in human history. It’s incredible.
Speaker: 3
27:29
What it can do, the scalability, the the cleanliness of it, how it works. We have no effort in this country today to build and deploy meh four reactors because there’s no economic incentive. It The path to get there is so far, the cost is so ai. What can the Energy Dominance Council what’s what what are you guys doing in your roles to make Meh four reactors?
Speaker: 3
27:48
Because everyone’s like, go back to the AP 1,000, these old Westinghouse designs from, like, fifty years ago and build that for nuclear. Why can’t we build for the future? What can we do to create the incentive to make this work?
Speaker: 6
27:58
Ai, I was gonna sai, I mean, the one thing that’s already happened if if people are interested in nuclear, which doesn’t help us in the near term race that we’re in. The near term race, as Chris said, is gonna be won by us, getting natural gas power online and stop shutting stuff down.
Speaker: 6
28:12
But President Trump signed four executive orders on nuclear about six weeks ago. And there’s been a flood of capital, fresh capital coming in. We’ve got a bunch of venture capital going towards, you know, over over close to a dozen different, SMR startups. There’s a lot of interest going on in that field.
Speaker: 6
28:29
Chris’ work with the National Labs redirecting that. I mean, Euclid’s got a future, but it’s it’s not the thing we need in the next twenty four months right now. That’s gotta keep moving ahead. President Trump’s exec board has helped that, but we’ve gotta get focused on getting more power right now.
Speaker: 6
28:44
Nuclear is the single biggest issue I work on.
Speaker: 5
28:46
We will have three next generation meh four reactors critical in Idaho National Lab next summer. We have we’re supplying HALU, the fuel for these next generation reactors to the we’ve already committed to five and we’ll give it to a dozen of these next generation reactor companies.
Speaker: 5
29:04
We worked in the one big beautiful bill to keep in the nudge the the tax credits for nuclear because the government smothered the industry and killed it for three decades. Even a free market guy like me thinks we need to get a little help to get it started.
Speaker: 3
29:19
How far away are we till it’s free market running?
Speaker: 5
29:23
Probably ten years. Ten years. Ten years. Because it’s just a learning curve. With the the the small modular reactors, you gotta build up the supply chain. You gotta build up and build them in volume. The cost can come down dramatically. The first ones As
Speaker: 3
29:35
you guys look at your energy demand curves, do you account for this revolution happening in physical AI? Because every time I look at it, it’s data centers this and buildings that, but no one talks about physical AI, which is batteries in robots, and some people are estimating hundreds of millions or billions of these things being built at once.
Speaker: 3
29:52
Trillions. Is this part of the the energy calculus as you think about demand?
Speaker: 5
29:56
It it it it is it is a meaningful part of it. And and and yes, the more you look at that, the more you see increased consumption of energy there and the more excited I get. The more we can build things at scale, the better we can get the economics. One one other data point.
Speaker: 5
30:10
We put out at the Department of Energy, we got 16 locations to build data centers. We sai, who wants to come build one? We’ll permit them right away. We’ll help you build power generation right next to it. We got 300 responses.
Speaker: 5
30:21
We we will announce tomorrow the first four of those sites that will be developed, and then you’ll hear many more coming behind that.
Speaker: 0
30:28
How do we solve the, the supply chain issues around the turbines and the other enabling technologies that we need for things like nat gas? Because I I agree with you. I have a data center project in Arizona. It’s a gigawatt. It’ll be $25,000,000,000 of capital, but we’re stuck in this weird situation where onshoring the the nat gas turbines are extremely difficult.
Speaker: 0
30:51
Then, you know, you see certain people will just buy the nat gas entire plants and then ship them over. So how do we solve the supply chain constraints to generating the energy we need?
Speaker: 6
31:02
Well, I would say if it if again, back to the immediate need right now. We need more power, and we need power for factories that are producing Ai, like using Jensen’s word, which I think everybody should stop saying data centers. Because a data center if you have a data center the the way America thinks about them, you’re processing a shopping claim.
Speaker: 6
31:19
You know, it helps the the seller, the buyer, and maybe a third party. If you’re processing a health care claim, it’s a provider, a payer, and a patient. But in an AI, it’s general purpose technology. Right. We’re we’re actually literally manufacturing every day over and over more intelligence. And so that’s different. It’s not data centers.
Speaker: 6
31:36
It’s AI factories. And we’ve taken a look at NEDC at the supply chain. If any of you arya trying to build an AI factory and you need power, and you haven’t talked to Chris and I and our team inside the White House at the National Energy Dominance Council, you need to come and talk to us because we’re mapping out, talking to everybody in the industry.
Speaker: 6
31:54
We’re we’re a neutral party, but we’re saying, here’s where the shortages are. We’ve talked about things like the Defense Production Act. We’ve talked to companies that are producing turbines. Everything we’re doing, we say, hey, you’ve got to amp up because some of these people are sleeping on the sidelines and they don’t think there’s gonna be real demand.
Speaker: 6
32:08
And we’re saying if anything, the demand is underestimated. So we’re trying to jack up the supply into the supply chain, but please contact us. We’re there. Think of us not we’re not a group that writes papers.
Speaker: 5
32:19
We’re a group that helps
Speaker: 6
32:20
people bit we we help people build projects. That’s what we do also.
Speaker: 2
32:23
I can’t wait to visit.
Speaker: 3
32:24
Just just build a data center, Jake Allen. You’ll get an invite. So Ai factory. AI factory.
Speaker: 2
32:31
We got enough data.
Speaker: 7
32:32
Secretary Bergen Wright, can you, as we finish up, hit on the point we were talking about a little bit earlier, which is that you take a step back. The focus here upstream on these ai ram energy to critical minerals is not just you have a new arya, obviously, on the AI side and there’s huge demand and this build out’s important for national security, this build out is important for winning, the AI race, but the derivative impact is what’s most interesting.
Speaker: 7
32:52
Right? These are thousands of jobs, tens, hundreds of thousands of jobs, then on any of these manufacturing build outs, particularly in factories, nuclear, capabilities, they’re going to lead to usually 10x the amount of indirect jobs as well. Back to Chamath’s point on the supply chain for these things. Can you talk a little about the job impact now that we’re seeing?
Speaker: 7
33:07
And then if we’re successful here in this building capacity, how many jobs are we talking about? How much how how much can we actually help the middle class here?
Speaker: 6
33:13
Well, it’s a fabulous question, Christian. And I’m so bullish on The US economy because there’s, our our friend, Scott, who was just on here before us. But, I mean, you take the combination of of lower taxes, dramatically lower regulation, accelerated permitting ai, just accelerating permitting.
Speaker: 6
33:28
There could be a trillion to a trillion and a half dollars stuck in this two to four year federal government permitting thing. We accelerate that expenditure of vatsal. The on shoring, the greatest economic developer in history, bringing foreign direct investment back to The United States, president Trump with these tariffs.
Speaker: 6
33:45
You know, what what we announced in Pittsburgh is $15,000,000,000,000. That’s coming back. So with AI, software has always been the one thing that extended human capability more than any other in our lifetimes. And now with AI, it it’s just a massive multiplier of that. But to make the factory happen, we’re sana have an explosion in in jobs in the trades. Yeah.
Speaker: 6
34:05
I mean, you’re gonna be able to skip college, go directly into develop a bryden, you know, make a 150
Speaker: 3
34:10
A 100.
Speaker: 6
34:11
Yeah. A 150. A 120 to start in my home state. And and again, and for people that are spending money on-site selection, I’ll tell you one thing. You sana build it faster, go to where the stranded gas is, build your power plant there, build the AI factory next to it. You don’t have to permit a transmission ai. You don’t have to permit a pipeline. Those are the two things.
Speaker: 6
34:31
Linear infrastructure has been weaponized by the people that are opposed to energy development in this country. They ai the blocking of those things. I say pipeline. You say protest. 100%. You know, so go to the go to the same place and co locate. President Trump himself has said in speeches, we’re gonna let you operate off the grid.
Speaker: 6
34:48
We can build all this stuff and and and keep rates for electricity for small businesses, consumers down because we’ve gotta add to the supply. But, you know, which if you’re gonna go to where the gas is, there’s sweet places to go. The Marcellus, the Permian, or the Bakken.
Speaker: 6
35:00
And, and you can save tens of millions hiring site selection guys. Go find the people with stranded gas and get going.
Speaker: 3
35:06
Great. Alright. Well Secretary Ai, secretary Bryden, thank you for being with us. That was great. That was great. Well done.
Speaker: 1
35:11
Thank you.
Speaker: 3
35:11
Really great.
Speaker: 0
35:12
Appreciate it. Thank you.
Speaker: 3
35:13
Nice to
Speaker: 2
35:13
see you, brother. Yeah. Nice to see you. Ai, Jake.
Speaker: 3
35:18
Welcome back.
Speaker: 4
35:18
Nice to see you.
Speaker: 3
35:19
How are you?
Speaker: 4
35:20
Nice to see you.
Speaker: 2
35:20
Howard, I noticed you had that incredibly smooth ai tequila at your birthday. How was it? Take us through it. Every sip.
Speaker: 3
35:28
Fourteen minutes. Just let’s get let’s get to it. Let’s get to it. Yeah.
Speaker: 2
35:32
Smooth?
Speaker: 3
35:32
Yeah. Well, thanks for being
Speaker: 2
35:34
a great advocate.
Speaker: 3
35:34
Gonna kick us off.
Speaker: 0
35:36
So the White House just rolled out a massive deal with Japan, which obviously plays a critical part of the semiconductor supply chain. Could you tell us a little bit about what the nexus is between this new exciting trade deal with Japan and how it fits with our the current debate around winning the race on artificial intelligence?
Speaker: 4
35:54
So it was fundamental for Japan to lower their tariff because their car industry and their manufacturing industry is fundamental to their economy. And they paid a $550,000,000,000, what the president likes to call, a signing bonus. Right? The greatest signing bonus of all time.
Speaker: 4
36:15
So they’ve committed $550,000,000,000 to finance projects in America that are important to the president and to American infrastructure. So we can build power. Means we could build 10 nuclear power plants. We could build fabs. Right? We could build critical minerals. We could do shipbuilding. Power, power, power.
Speaker: 4
36:36
We could do anything, and they will finance it, and we split the profits of the project 90% for America and 10% for Japan. And I don’t think people can actually understand how powerful that is. This is the national security sovereign wealth fund of the United States of America funded by president Trump’s tariff policy
Speaker: 2
37:03
Right.
Speaker: 4
37:04
That produced that kind of money committed to America. It’s
Speaker: 2
37:09
Would that actually go into congratulations. Will that go into a sovereign wealth fund that you’ve been talking about and the president has been talking about?
Speaker: 4
37:17
No. I think this is this is separate. The what the president says about the Sovereign Wealth Fund is we do a sovereign wealth fund that invests when we’re done paying off our deficit. Okay. Right? First, we gotta pay off our deficit Some
Speaker: 5
37:29
work together.
Speaker: 4
37:31
Ai to make money. So what this is is this is the Japanese government says Ai will finance ai I will pay for.
Speaker: 0
37:38
Right.
Speaker: 4
37:39
Not finance. I will pay for. You wanna build a nuclear facility? Build it. You wanna build 10 nuclear facilities? You go build them. You wanna go build a pipeline, you go build it. You wanna build, fabs, you go build it. Whatever you think is necessary, you build it, we’ll pay for it.
Speaker: 4
37:55
You net lease it to an operator, and we’ll split the lease payments. 90 for you, 10 for Japan. It’s a blockbuster if there ever was one.
Speaker: 0
38:06
But it’s an incredible deal structure. How do how do you get to that?
Speaker: 4
38:10
Well, I got to that. So this I came up with this idea in, in January, and then I kept restructuring it to try to figure out how to do it because I met with some, Japanese senior executives while, before before inauguration day. And they said, you know, I understand your tariff policy, but Japan’s never gonna open. Right? They’re just never gonna open.
Speaker: 4
38:36
I mean, in in 1850, Perry took an armada and tried to break it open. In 1850, he couldn’t open it. So, opened the Japanese market. So come up with another idea. And the other idea was they buy it down. And so what structure we used, how they did it, they offered us.
Speaker: 4
38:53
They originally started offering us loans or loan guarantees, and the president’s like,
Speaker: 0
38:56
I don’t
Speaker: 4
38:57
need someone else to loans. Ai, I don’t need to borrow money from someone else. And then ai, we figured out that, really, it just needed to be committed capital to back projects that we want. And so it was five months in the making, and and I’m me talking to the president about about doing different structures.
Speaker: 4
39:15
And eventually, in the middle of last week, we came to the structure. The president said, okay. I like it. Let’s bring him in and talk. And then the president made the deal better.
Speaker: 2
39:26
Are you gonna replicate this? Is this ai a new blueprint, or is it unique to Japan, which is protectionist sana its own unique culture?
Speaker: 4
39:34
Well, I mean, the problem that Korea has is they’re staring at it. You know? They view themselves deeply competitive to Japan. They both produce huge amounts of cars. They both produce huge amounts of electronics. They both do these things. And now they’re looking at the price. Right. And they’re thinking, ouch.
Speaker: 4
39:52
So, you know, how quickly did they come to see me? Let’s sai, when we announced the deal and, they were in my office, today. Mhmm.
Speaker: 2
39:59
So The Koreans were. Oh, yeah. Fantastic.
Speaker: 3
40:02
How much how much have you prioritized market access for American businesses into some of these countries versus some of the other kind of, trade considerations? Where does it prioritize? And we’ve talked about this a lot, particularly as it relates to Ai. And I think that part of this is in the, the action plan and in the EOs being signed later today. But this is a broader question for American businesses.
Speaker: 3
40:23
I work in agriculture. It’s very hard to access overseas markets, and there’s not a lot of parity. Is that become key to some of these conversations, and where does it sit on the priority rung?
Speaker: 4
40:34
That that’s the priority rule. So the rule is you must open your market. Open, open, open. And and let’s be clear, these markets have never been open. We have Stockholm syndrome in America. These markets have never been open. There’s tariffs. There’s nontariff trade barriers.
Speaker: 4
40:53
Like, you can’t sell an American car in these locations whether you want to or not. You’re not allowed or they won’t buy them because the seat belt is like this or that this is like, they make these rules. Right. So we are demanding the markets are open, and the issue with Japan was they were never gonna open it. Mhmm. So what are we gonna do?
Speaker: 4
41:12
And the answer was, ai, that’s where it came up with this, you know, signing bonus. Right?
Speaker: 2
41:18
So reciprocity or something interesting if you want us something more bespoke?
Speaker: 4
41:23
Vietnam, completely open. Indonesia, completely open. Philippines, mostly open. Small deficit, relatively higher tariff. Right? So it’s all there’s a sort of a lot of levers, and you pull those levers
Speaker: 3
41:38
When are
Speaker: 2
41:38
you gonna wrap all this up? This has been, like, a a really shocking and now, I think, kind of, you know, more mundane, methodical approach. So when does it all wrap up and we can ai put the tariff issue behind us?
Speaker: 4
41:52
Okay. So on August 1, whatever hasn’t been settled will be settled. You
Speaker: 3
41:59
get the debt.
Speaker: 4
41:59
Tariffs go into effect. Right? So all this 10%, they’ll all just pop up to some higher number. He sent the letter to a lot of people. Right? And now nothing stops them from negotiating the next day, but they’re paying on that day. So that’s next Friday. I mean, that’s not that far away. Mhmm.
Speaker: 4
42:18
So we’re very busy because a lot of people are now coming to the table with their best best offer, but the price has gone very, very high. Mhmm. And let’s be clear what that price is. You will open your market to America. You will open it to ranchers, farmers, fishermen.
Speaker: 4
42:36
You will open it you know, you couldn’t sell lobster to all these places. Like, for instance, Indonesia is completely open except for two products. Muslim country, no pork, no alcohol. Right? We’re talking India, obviously, no beef. Right? I mean, you do things like that. You say, but we need it open.
Speaker: 4
42:55
If they don’t want it open, there’s your tariff. It’s 26%, 27%, 31%, 19%, whatever it is. And then if you decide to open it later, come on. But that’s what we’re doing.
Speaker: 3
43:08
You’ll find out over time what other kind of regulatory processes they have put in place. This is always the issue. When any any of us work in foreign markets, you’ve worked in foreign arya, sai you go in, and then you find out, well, there’s this thing I gotta do. And this thing takes eighteen months or thirty six months, and they make it hard to get the permit or the whatever you need. There’s always a way.
Speaker: 3
43:28
Does this become, like, a continuous policing exercise for your department? And how does this become part of American trade? Like, is this sai ongoing kind of kind of iteration iterative process here?
Speaker: 4
43:40
They bought their tariff rate down by opening the market. So if they mess with that, they’re messing with the president. And I don’t know if you guys have seen him on TV, but that doesn’t really work well.
Speaker: 0
43:55
Yeah.
Speaker: 4
43:55
Okay? So the idea is he’s making the deal, he’s closing the deal. So the way we we talk about it together is I set the table. Right? And he closes the deal. And and he is the best negotiator because he’s just he’s done this his whole life, and he’s the president of The United States.
Speaker: 4
44:14
So that’s amazing power, and he wields it to get the best deals
Speaker: 2
44:18
for him. Let’s talk about the big issue, China. Where are we sana wind up with China? Reciprocity, TikTok, the whole shebang. Is this gonna be one big grand arya? Taiwan, TikTok. There’s so many issues. Is there any way to thread the needle on this?
Speaker: 4
44:33
I I think the way I think about, China is draw a line. K? There’s below the line, like, they sell us, baby clothes, and we sell them soybeans. That stuff, we need to do more of it. We sana buy more of that. They wanna buy more of ours. We need to open that, get this detente stuff, you know, where we’re just flowing below the line.
Speaker: 5
44:58
Got it.
Speaker: 4
44:59
Above the line would be, you know, our best chips. Blackwell chips, h, you know, two hundreds and one hundreds. Right? We don’t wanna sell them our best stuff. They don’t wanna sell us hypersonic missiles either. Right? We would say if it was open, we’d say, well, let’s dig a couple of your hypersonics.
Speaker: 4
45:15
Let’s see what you got. Sure.
Speaker: 2
45:16
Yeah.
Speaker: 4
45:16
And so that’s not happening. So that’s above the line. And then the question is, what’s the line? That’s the proper negotiation.
Speaker: 3
45:24
Mhmm.
Speaker: 4
45:25
Right? Be open below the ai, let’s get it on good for both economies. Above the line, we’re competitors. Let’s just call it what it is and and stick with it. And then what we can really negotiate when we’re together is the line.
Speaker: 2
45:39
Where’s TikTok in all this? Jacob and I are both pretty, adamant. This is spyware. This is something that should not be on a 100,000,000 Americans’ phones. It is way too dangerous. They’ve proven themselves to use it to spy on journalists already. And the fact that they won’t divest from it, I think, tells you everything you need to know. They see this as a critical weapon against The United States.
Speaker: 2
46:01
Where what do you think? What does the administration think?
Speaker: 4
46:03
Well, the the president is reasonably positive about TikTok ai it goes into American hands and it’s controlled by American technology. Right? I think that’s his view, was that they’ve gotta be out of it. It’s gotta be on an American technology stack, and it’s gotta be owned by Meh, period.
Speaker: 4
46:22
And then how we work it on through there, we’ll figure it out. Right now, it it’s sort of in that,
Speaker: 2
46:29
straddling the line for you?
Speaker: 4
46:30
You’re sorta staring at each other, but eventually, that’ll get sorted out. Ai I think that deal will happen and, America will buy TikTok because the alternative is just shuts it off and that just seems illogical.
Speaker: 0
46:42
Can I go back to the above the line, below the line? Love that love that saying that. How do you think about the and you talked about the chips. How How do you think about these export controls to various countries and various regions? What’s your risk calculus about where those things should be?
Speaker: 0
47:01
And and if I could just actually add a question that builds on top of that. You’ve talked about creating AI economic zones where trusted partners could get preferential access for American technology. So could you describe a little bit what your vision is for that?
Speaker: 4
47:14
I think what we’re wrestling with, and this is we’re really discussing literally the intellectual wrestle we’re going through now, is is the idea that we are comfortable with allies buying significant numbers of chips, right, and having a large cluster, provided that cluster is, operated by an American a trusted American operator, and the cloud is a trusted American operator sai that we know that giant cluster is surrounded by
Speaker: 2
47:44
us. Right.
Speaker: 4
47:44
Right? As you go down from there, right, that’s where we go. Okay. If they want a smaller cluster, would you expand the number of people who are trusted? Right? And the answer would be probably yes. Right? And then when you go down from there to a smaller and smaller cluster, right, how do you deal with that?
Speaker: 4
48:03
So I think it’s cluster size is sort of the a way of thinking rather than saying, you know, because I went to Poland, and I was in I was in Poland on a on a mission for the for the government, and the prime minister of Poland chases me down and says, what did I do to America to be tier three?
Speaker: 4
48:24
And I was like, I thought you were part of Europe. You know? Like, I didn’t understand what it could possibly be the issue. So Ai think the answer is, ally or not.
Speaker: 0
48:34
Right.
Speaker: 4
48:35
Cluster size and who controls it or not. I think once once you sort of wrestle with those ideas and anybody who has ideas along those lines and you wanna come and talk to us about it because this is this is really the thinking right now, and we’re sort of debating that right now.
Speaker: 2
48:50
Howard, I just wanna say thank you for it’s so great to have a sharp negotiator and and such a creative mind representing America. It makes me feel, like, really great about the country.
Speaker: 0
49:00
90% curious. They’re they’re meeting ram. Yeah.
Speaker: 3
49:02
I mean fun. That is all we How
Speaker: 2
49:03
do we get 90% curious? I love it. Yum yum.
Speaker: 0
49:06
Sounds like I
Speaker: 2
49:07
love it. You’re a New Yorker. Yeah?
Speaker: 4
49:09
I I am. But the Where are you? Which one? Ai. New York.
Speaker: 1
49:13
I
Speaker: 4
49:13
grew up on Long Island.
Speaker: 2
49:14
Got it.
Speaker: 4
49:15
My kids arya grown in Manhattan, but, the negotiator in chief is Donald Trump.
Speaker: 5
49:19
Ai nice that he’s got you.
Speaker: 4
49:20
He’s right ai. He’s amazing.
Speaker: 3
49:21
Well, thanks for coming. We’re gonna make, make some room for the president. He’s gonna get ready. Howard, thank you for joining us. That was great. That’s good. Thank you.