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Paramount Closes Warner Merger in Historic Hollywood Deal · Bloomberg Intelligence

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  Speaker 6: All right, Scarlett, have you seen any good movies this summer?
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  Speaker 1: This summer, yes.
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  Speaker 6: Was the Odyssey the big one?
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  Speaker 3: Yes, I saw the Odyssey.
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  Speaker 1: I saw Tony, the biopic on Anthony Bourdain.
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  Speaker 2: Oh, yes.
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  Speaker 1: You can be thinking of him as just Tony, but yeah.
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  Speaker 2: It's been a.
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  Speaker 6: Pretty good summer for the movies, and in that vein,
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  Speaker 6: it has been a pretty good summer for movie deals.
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  Speaker 6: The Paramount Skydance has closed its acquisition of Warner Brothers Discovery.
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  Speaker 6: It's a $ 110 billion deal. We have media reporter Hannah
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  Speaker 6: Miller here discussing this with us. Hi, Hannah.
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  Speaker 2: Hi.
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  Speaker 6: All right. Tell us about this deal. It is enormous.
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  Speaker 3: Yeah, it's huge.
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  Speaker 4: This is a big deal in the film and entertainment industry. So, yeah, today, Paramount,
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  Speaker 4: Skydance and Warner Brothers closed their merger. And the company
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  Speaker 4: is now called Skydance. And this has two of Hollywood's
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  Speaker 4: biggest film studios, two major streaming services, HBO Max and
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  Speaker 4: Paramount Plus, two major news networks with CBS and CNN.
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  Speaker 4: All of this is united under one ownership. Are those
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  Speaker 4: brands going to stay distinct?
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  Speaker 1: I mean, is HBO and Paramount Plus going to merge
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  Speaker 1: the apps at least? Is CNN and CBS going to
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  Speaker 1: stay separate entities?
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  Speaker 4: Yeah, so right now, it seems like they want to
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  Speaker 4: preserve those brand identities, that there are going to be
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  Speaker 4: these distinct brands underneath the Skydance name. But yeah, I
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  Speaker 4: think the big question is whether the streaming services are
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  Speaker 4: going to be combined. At our recent Bloomberg Screen Time event,
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  Speaker 4: we had Casey Bloys, who is from Warner Brothers. He's
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  Speaker 4: heading up the streaming efforts. And he said, yeah, maybe
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  Speaker 4: a bundle would be an option.
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  Speaker 6: What is the appeal of having a company that is
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  Speaker 6: this big? I mean, obviously David Ellison's been on a
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  Speaker 6: little bit of a tear. What do you think the
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  Speaker 6: goal is here? Is it just like one media company
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  Speaker 6: to rule them all or is there something else going on?
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  Speaker 4: Yeah, so David Ellison has talked about uplifting the entire
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  Speaker 4: film industry with this merger. And he really wants to
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  Speaker 4: invest in content and boost production of films. And as
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  Speaker 4: part of an antitrust settlement, Skydance is actually required to
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  Speaker 4: produce 30 films a year that will be in theaters.
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  Speaker 4: If they miss that measure, they actually have to pay
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  Speaker 4: a financial penalty for each movie that they fall short.
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  Speaker 4: So that's pretty interesting. David Ellison has only... been confident
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  Speaker 4: that they will meet this goal. And his claim is that,
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  Speaker 4: you know, they're going to boost production in Hollywood, that
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  Speaker 4: they're going to bring great movies into theaters, and that
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  Speaker 4: they're going to get people back into seats.
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  Speaker 1: Boost production like with humans as opposed to with AI and,
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  Speaker 1: you know, in Hollywood when so many of the movies
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  Speaker 1: are made outside of the U.S., you know, in cities
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  Speaker 1: like Toronto or Vancouver. I wanted to ask you about
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  Speaker 1: how Warner Brothers is no longer going to be distinct
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  Speaker 1: anymore because it's now completely absorbed because they had this
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  Speaker 1: movie Digger. And I think we talked about this yesterday
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  Speaker 1: with Tom Cruise. And boy, that was. I mean, it
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  Speaker 1: did not deliver, and this was supposed to be the
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  Speaker 1: last hurrah for Warner Brothers.
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  Speaker 4: It is not a great note to end on for them.
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  Speaker 4: And Tom Cruise, he's also a big name for Paramount
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  Speaker 4: with the Mission Impossible series and Top Gun. So it
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  Speaker 4: was a big flop. That being said, Warner Brothers actually
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  Speaker 4: has a lot on the horizon. The new Harry Potter
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  Speaker 4: HBO series is coming out in December.
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  Speaker 1: Does the world need a new Harry Potter series?
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  Speaker 6: I think that's the wrong question, right? They're like building
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  Speaker 6: out this universe. They're doing this with star Wars too, right?
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  Speaker 6: It's like more is more.
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  Speaker 2: Yeah.
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  Speaker 1: But I mean, the movies already exist. Sorry for the interruption.
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  Speaker 4: I agree. No, I mean, that's a big question hanging
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  Speaker 4: over the series. Do people actually want this? Do we
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  Speaker 4: need this?
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  Speaker 1: It doesn't matter. They've done it.
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  Speaker 4: They've invested a ton of money in it. And this
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  Speaker 4: is a multi-year project, at least spanning a decade.
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  Speaker 1: If the seasons continue to get renewed.
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  Speaker 4: So it is a big bet for the company.
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  Speaker 6: What about the entertainment industry overall? How is it doing?
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  Speaker 6: Is this a good moment to be in entertainment? Is
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  Speaker 6: it a growth moment or not so much?
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  Speaker 4: You know, we've seen things pick back up. You know,
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  Speaker 4: people are going to the movies again. You have stuff
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  Speaker 4: like The Odyssey, you know, drawing people into theaters. You
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  Speaker 4: have had smash hits since the pandemic. I mean, Warner
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  Speaker 4: Brothers had the Barbie movie in 2023. So, you know,
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  Speaker 4: there are these bright spots, but there still is a
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  Speaker 4: lot of uncertainty. And I think there's a huge concern
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  Speaker 4: in the industry that this merger will result in layoffs
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  Speaker 4: and job cuts because David Ellison is looking to cut
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  Speaker 4: $ 6 billion worth of costs for Skydance.
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  Speaker 1: Okay, so let's go there right now in terms of
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  Speaker 1: job cuts. Where would you be looking for those job
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  Speaker 1: cuts to take place?
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  Speaker 4: I think they would be pervasive across the company. Yeah,
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  Speaker 4: I don't know if any specific area will be targeted.
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  Speaker 4: But people are on edge. They don't know exactly what
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  Speaker 4: the plans are going to be. And we've seen leaders
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  Speaker 4: try to put forth a positive message. The CEO of CNN,
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  Speaker 4: Mark Thompson, is still continuing to manage CNN post-merger. And
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  Speaker 4: he sent a memo out to employees saying, you know,
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  Speaker 4: I'm in a positive frame of mind about this. I
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  Speaker 4: know we have some trepidations. But he did speak warmly
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  Speaker 4: about the deal overall.
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  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 5: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
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  Speaker 5: you get your podcasts or watch us live on YouTube.
• 6:00
  Speaker 3: Do you take Ubers often?
• 6:02
  Speaker 1: I do, but I arbitrage between Uber and Lyft once
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  Speaker 1: I've used up my $ 15 credit for my Amex Platinum card.
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  Speaker 3: Oh, this is a good system.
• 6:12
  Speaker 1: Yeah. So I have to use up the free credits
• 6:13
  Speaker 1: first before I do anything. And then I start arbitraging
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  Speaker 1: between the two. But I tend to be thrifty. So
• 6:19
  Speaker 1: if I can avoid using Uber, I will.
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  Speaker 3: That is a good strategy.
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  Speaker 6: I mean, we have some very interesting Uber news today. Apparently,
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  Speaker 6: Uber Technologies has just bought a catering firm, Easy Cater Inc.,
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  Speaker 6: for $ 2. 3 billion. We are joined by Natalie Lung, Bloomberg
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  Speaker 6: News tech reporter, to talk all about this and explain it.
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  Speaker 5: Hi, Natalie.
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  Speaker 2: Hi.
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  Speaker 6: So why is Uber buying a catering company?
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  Speaker 2: So most of us know Uber as a ride-hailing consumer
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  Speaker 2: app company, but they do have a pretty big B2B
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  Speaker 2: corporate business as well, allowing companies to call cars for
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  Speaker 2: the executives or even corporate accounts for employees to get
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  Speaker 2: a preferred rate. And so this is a push into
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  Speaker 2: the catering business, the corporate catering business, and this will
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  Speaker 2: boost their delivery unit, which actually makes up nearly half
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  Speaker 2: of their overall business.
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  Speaker 6: So this is not part of Uber Eats?
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  Speaker 2: It will become part of Uber Eats, which is nearly
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  Speaker 2: half of the whole entire business, which would be surprising
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  Speaker 2: because you might think right handling is bigger, but it's
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  Speaker 2: almost on par.
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  Speaker 1: Wait, Uber Eats is already half of Uber's business?
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  Speaker 2: Yes.
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  Speaker 1: And does this deal bring it to more than half?
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  Speaker 2: Potentially, depending on how much this grows. Uber is saying
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  Speaker 2: this will be accretive to the overall business. And it
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  Speaker 2: sets it up actually... pretty well against its rival, DoorDash,
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  Speaker 2: which announced its own catering platform for the workplace earlier
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  Speaker 2: this year.
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  Speaker 6: So when you say business-to-business, will I be able to
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  Speaker 6: order something from the Easy Cater Inc. via Uber, or
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  Speaker 6: is it not for me? Is it for big corporate
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  Speaker 6: events when they're ordering in big plates of food?
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  Speaker 2: Yeah, so these are tools that maybe facilities managers or
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  Speaker 2: event managers in companies would use to bulk order for
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  Speaker 2: employees for events, and they're They even have like a
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  Speaker 2: Slack integration where people can do recurring orders. So yeah,
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  Speaker 2: this is a corporate too. And another point that is
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  Speaker 2: interesting to note that this is Uber's sixth acquisition this year.
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  Speaker 2: And they've really been on a buying spree.
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  Speaker 1: So when you say that they've been making a lot
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  Speaker 1: of purchases, are most of these purchases defensive purchases or
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  Speaker 1: offensive purchases? Because DoorDash, as you mentioned, launched a workplace
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  Speaker 1: catering service in April. So it feels like, you know,
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  Speaker 1: they've done something like that already. Is it we're playing
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  Speaker 1: catch up or is it kind of making sure it
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  Speaker 1: guarantees its lead?
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  Speaker 2: Yeah, it's kind of both. If we look at, let's say,
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  Speaker 2: for the delivery acquisitions, Gatir in Turkey, it's one of
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  Speaker 2: the big players there. And then there's also Delivery Hero,
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  Speaker 2: which is one of the biggest apps in Europe. And
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  Speaker 2: so in that sense, it's defensive against DoorDash, which acquired
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  Speaker 2: Deliveroo last year. And there's also other more competitive strategic platforms.
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  Speaker 2: purchases like the chauffeuring business, Black Lane or the parking app,
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  Speaker 2: Spot Hero. So it's like lateral, horizontal moves and expanding everywhere.
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  Speaker 6: This is a really, it's really interesting to hear that
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  Speaker 6: Uber has been expanding so much and buying so many
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  Speaker 6: things up. I'm just looking, and their stock is down 16%
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  Speaker 6: this year. I mean, it's had a, I mean, it
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  Speaker 6: feels like the market's been so positive this year. Uber
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  Speaker 6: has gone against that trend. What is the strategy here?
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  Speaker 6: Are they just grabbing for anything, or is there kind
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  Speaker 6: of a long game they're playing?
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  Speaker 2: Yeah, Uber investors are sort of hard to please. Like,
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  Speaker 2: even when they post, you know, earnings that beat expectations.
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  Speaker 6: Well, down 16% does feel, if I were an Uber investor,
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  Speaker 6: I would also- be unpleased.
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  Speaker 5: Yeah.
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  Speaker 2: A lot of the story is actually not related to
• 10:03
  Speaker 2: these acquisitions. It's related to the robo-taxi story. You know,
• 10:07
  Speaker 2: people are seeing Waymo expanding and more than a dozen
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  Speaker 2: cities this year, and they have chosen not to partner
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  Speaker 2: with Uber in most of them. And so this raises
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  Speaker 2: the question, the future of, you know, what Uber might
• 10:19
  Speaker 2: become if Waymo becomes more dominant in the future.
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  Speaker 1: Okay, so the Waymo story kind of casts a shadow
• 10:25
  Speaker 1: over Uber. What is Uber's progress when it comes to
• 10:30
  Speaker 1: driverless automated transportation? ride-hailing services.
• 10:35
  Speaker 2: That was a mouthful. They don't make their own cars,
• 10:39
  Speaker 2: but their strategy is to partner with people who make them.
• 10:42
  Speaker 2: They partner with Waymo in two cities, but then in
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  Speaker 2: other cities, they partner with companies like Lucid or Nuro
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  Speaker 2: and in other parts of the world, some Chinese firms
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  Speaker 2: as well.
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  Speaker 3: This is very patchwork.
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  Speaker 2: Yeah, very small scale as well.
• 10:58
  Speaker 6: Is Uber pivoting? Are they turning into something else? How
• 11:01
  Speaker 6: do you see this company evolving? going forward?
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  Speaker 2: They've always been very opportunistic in purchasing and partnerships and
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  Speaker 2: so I see them as trying to be everywhere all
• 11:11
  Speaker 2: at once and you know and there might be times
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  Speaker 2: where that this might be a loss-making endeavor to go
• 11:17
  Speaker 2: into a new market or area but you know over
• 11:21
  Speaker 2: time they will find ways to make it profitable or
• 11:24
  Speaker 2: even withdraw if it doesn't make sense anymore.
• 11:28
  Speaker 1: What does this mean for Lyft if Uber is doing this?
• 11:30
  Speaker 1: How does Lyft respond?
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  Speaker 2: So in terms of the delivery business, Lyft doesn't have
• 11:35
  Speaker 2: a delivery business. So they are much more smaller in
• 11:38
  Speaker 2: that sense. They're only competing on the ride-hailing side. So
• 11:42
  Speaker 2: when robo-taxis sort of become more commonplace, Lyft will sort
• 11:47
  Speaker 2: of have to fight an upstream battle here. Yeah.
• 11:51
  Speaker 1: Have you taken a Waymo, Stacey?
• 11:53
  Speaker 6: I have taken a Waymo, and I loved it.
• 11:56
  Speaker 1: Really?
• 11:57
  Speaker 3: It was really interesting.
• 11:58
  Speaker 6: It's really strange to have a car driving you with
• 12:01
  Speaker 6: nobody in it.
• 12:02
  Speaker 2: Yeah. I don't know.
• 12:03
  Speaker 3: It was a really.
• 12:04
  Speaker 6: strange experience I do like always talking to the drivers
• 12:07
  Speaker 6: and things like that but it was it was it
• 12:09
  Speaker 6: felt like being in the.
• 12:10
  Speaker 2: Future yeah I was just in San Francisco last week
• 12:13
  Speaker 2: so I did try their new model the minivan model
• 12:16
  Speaker 2: for the Ojai it was a pretty good experience like
• 12:18
  Speaker 2: very roomy my luggage was next to my seat yeah
• 12:22
  Speaker 2: I wasn't used to the luggage like sloshing around a
• 12:24
  Speaker 2: bit but yeah it's definitely a very roomy and like look.
• 12:27
  Speaker 6: At you mavericks you get to pick the music yeah
• 12:31
  Speaker 6: wow okay that's a big one Stay with us.
• 12:35
  Speaker 1: More from Bloomberg Intelligence coming up after this.
• 12:41
  Speaker 5: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 12:45
  Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 12:48
  Speaker 5: Auto with the Bloomberg Business app. Listen on demand wherever
• 12:51
  Speaker 5: you get your podcasts or watch us live on YouTube.
• 12:56
  Speaker 6: We are going to continue talking about AI a little bit.
• 12:58
  Speaker 6: We've got the great Ed Ludlow, Bloomberg Tech host, here
• 13:01
  Speaker 6: to talk about some very exciting movements with tech stocks
• 13:05
  Speaker 6: this morning.
• 13:05
  Speaker 4: Hello, Ed.
• 13:07
  Speaker 7: Hello, good morning.
• 13:08
  Speaker 1: NVIDIA, right, is close, not that close.
• 13:12
  Speaker 7: It's not as if I'm like sitting here with my
• 13:13
  Speaker 7: party hat under the desk ready for NVIDIA 6 trillion,
• 13:16
  Speaker 7: but it's getting closer on what is like just post
• 13:19
  Speaker 7: earnings momentum, a sweetener for investors, the biggest buyback in history.
• 13:23
  Speaker 7: But there's something in the news cycle that a lot
• 13:24
  Speaker 7: of people miss, which was this semi-analysis report that talked
• 13:29
  Speaker 7: about how Cerebrus had lost out to NVIDIA for OpenAI
• 13:33
  Speaker 7: running the inference phase on GPT 6.1 SOLT. It had
• 13:37
  Speaker 7: been Cerebrus gear that had run 5.6. And so actually
• 13:41
  Speaker 7: there's some near term going on here. And a lot
• 13:43
  Speaker 7: of people ask me a lot of questions like, oh
• 13:44
  Speaker 7: my goodness, what's going on with Cerebrus? And I was like, no,
• 13:46
  Speaker 7: you've missed the other side of this coin, guys, which
• 13:49
  Speaker 7: is that NVIDIA is still the mainstay of everything in
• 13:52
  Speaker 7: the market for compute.
• 13:53
  Speaker 1: Okay, that's the takeaway here. You mentioned Cerebrus. It was
• 13:57
  Speaker 1: a high profile IPO. There's another IPO that we can
• 14:01
  Speaker 1: look ahead towards and that's Moonshot AI. But this will
• 14:04
  Speaker 1: be an IPO in Hong Kong, I believe next year, Ed?
• 14:07
  Speaker 7: Yeah, and you can tell that they're moving and grooving
• 14:10
  Speaker 7: on it because they're going to the private markets and
• 14:13
  Speaker 7: they're doing deals, which is like so normal. There's been
• 14:17
  Speaker 7: in the United States as a parallel, a sort of
• 14:19
  Speaker 7: like bit of confusion about like, hold on, if OpenAI
• 14:22
  Speaker 7: is going public and Anthropic is going public, like why
• 14:24
  Speaker 7: were they so active in private markets just before? completely
• 14:27
  Speaker 7: normal right to bring in in crossover investors and cornerstone
• 14:30
  Speaker 7: investors and with moonshot very much the same thing you
• 14:34
  Speaker 7: know they kind of closed this chapter of their private
• 14:36
  Speaker 7: market's life with a 50 billion dollar valuation but they
• 14:39
  Speaker 7: also the other data set i would look at is
• 14:42
  Speaker 7: look at the token uh deployment from their open models
• 14:45
  Speaker 7: and they have a lot of traction right now but
• 14:47
  Speaker 7: it looks like hong kong is going to be set
• 14:49
  Speaker 7: for them next year yeah.
• 14:50
  Speaker 6: So one other potential IPO I wanted to ask about
• 14:53
  Speaker 6: was DeepSeek, which is apparently looking to go public. And
• 14:57
  Speaker 6: that's a really interesting company because they are open source.
• 15:01
  Speaker 6: What do you see when you look.
• 15:02
  Speaker 4: At that one?
• 15:03
  Speaker 7: Yeah, I mean, this is less than sophisticated and I
• 15:05
  Speaker 7: apologize for that. But I just look at DeepSeek as
• 15:08
  Speaker 7: like the slightly bigger and slightly more ahead version of Moonshot.
• 15:12
  Speaker 7: You know, like basically DeepSeek is subject to more scrutiny
• 15:16
  Speaker 7: because the US frontier labs have made accusations against it distillation, right?
• 15:22
  Speaker 7: And that's been in the news cycle. But they themselves
• 15:26
  Speaker 7: are very close on a $ 12 billion round led by
• 15:30
  Speaker 7: Tencent in the private markets. And again, all that does
• 15:34
  Speaker 7: is act as a precursor to a massive debut for
• 15:38
  Speaker 7: them you know, a proper Frontier Lab debut in the
• 15:41
  Speaker 7: Chinese markets context at some point between now and the future,
• 15:45
  Speaker 7: should we just say? I found, guys, it's very risky
• 15:47
  Speaker 7: to say, yep, definitely happening, 27. We just don't know
• 15:51
  Speaker 7: in lots of these cases. Things are sliding all the time.
• 15:54
  Speaker 1: Absolutely. Have you used DeepSeq? I mean, is DeepSeq popular
• 15:58
  Speaker 1: in the U.S.? Yeah.
• 16:00
  Speaker 7: You know, it is popular. There are those like in
• 16:03
  Speaker 7: Silicon Valley, right, for want of a better sort of
• 16:05
  Speaker 7: category of people who initially were like making use of
• 16:09
  Speaker 7: it as a comparator to agents or models that were
• 16:14
  Speaker 7: offered by the Frontier Labs. And that people pulled back
• 16:16
  Speaker 7: because of concern about exposing themselves to a Chinese entity.
• 16:22
  Speaker 7: I played around with it, but largely I've used models
• 16:25
  Speaker 7: and tools from the U.S.-based labs.
• 16:29
  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
• 16:36
  Speaker 5: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 16:40
  Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 16:43
  Speaker 5: Auto with the Bloomberg Business app. Listen on demand wherever
• 16:46
  Speaker 5: you get your podcasts or watch us live on YouTube.
• 16:51
  Speaker 1: Google and Constellation Energy deal has shot Constellation Energy shares
• 16:55
  Speaker 1: up soaring on the day. Let's talk a little bit
• 16:58
  Speaker 1: more about this with Will Wade. He is our Bloomberg
• 17:00
  Speaker 1: News energy reporter. And Will, this is not the first
• 17:04
  Speaker 1: long-term agreement that Constellation Energy has made with a hyperscaler.
• 17:08
  Speaker 1: It's done something similar with Amazon too, right?
• 17:11
  Speaker 3: Oh yeah, that was just last week. It was a
• 17:13
  Speaker 3: very similar deal. The hyperscaler agrees to buy power. They
• 17:17
  Speaker 3: commit for a certain price. They don't tell us the price.
• 17:21
  Speaker 3: but for a long time. That gives Constellation the surety
• 17:24
  Speaker 3: of plenty of money coming in for a long time,
• 17:27
  Speaker 3: so they spend the money to upgrade the power plants.
• 17:30
  Speaker 3: And that means there's actually more power. The plants are
• 17:34
  Speaker 3: producing more. They add new equipment, better equipment. So all
• 17:38
  Speaker 3: of a sudden we've got new nuclear capacity, which is
• 17:40
  Speaker 3: something that people really want.
• 17:43
  Speaker 6: Does this mean that Google owns the nuclear power plant,
• 17:46
  Speaker 6: or is it just investing in it?
• 17:50
  Speaker 3: They're agreeing to buy electricity from the company.
• 17:54
  Speaker 6: It's like when airlines buy fuel futures?
• 17:57
  Speaker 3: Sort of like that. Basically, they're buying electricity from Constellation,
• 18:02
  Speaker 3: and Constellation is deciding how to give them the electricity.
• 18:06
  Speaker 3: But they know, and it's all connected, so it's going
• 18:10
  Speaker 3: to be electricity that comes from upgrading these facilities.
• 18:15
  Speaker 1: So do consumers end up benefiting? Does everyone else end
• 18:18
  Speaker 1: up benefiting now that Constellation is upgrading its facilities?
• 18:22
  Speaker 3: Consumers don't really get factored in here. This is the
• 18:26
  Speaker 3: data center companies buying electricity. They don't tell us the price,
• 18:31
  Speaker 3: but generally we know or we think we know that
• 18:35
  Speaker 3: it's a high price. It's higher than consumers are paying generally.
• 18:40
  Speaker 3: So that's a big concern that this is sort of
• 18:43
  Speaker 3: driving up electricity costs. across the board. And we're definitely
• 18:46
  Speaker 3: seeing that. Electricity is going up across the board.
• 18:49
  Speaker 6: Yeah, I know that in areas where there are more
• 18:51
  Speaker 6: data centers, I think around Washington, D.C. is one of
• 18:54
  Speaker 6: the big ones. We've seen electricity prices go up by
• 18:58
  Speaker 6: a lot, sometimes even in the double digits around the D.C.
• 19:01
  Speaker 4: Area.
• 19:01
  Speaker 6: Is that something we can expect to see more of
• 19:03
  Speaker 6: as AI becomes a bigger part of the economy? These
• 19:05
  Speaker 6: companies get bigger. They have to funnel money into this
• 19:10
  Speaker 6: one choke point, which is energy.
• 19:12
  Speaker 3: Yeah, probably. I mean, you identified the area around D.C.
• 19:16
  Speaker 3: We call it Data Center Alley. It's not a big one.
• 19:18
  Speaker 3: It's the big one.
• 19:19
  Speaker 5: Okay.
• 19:21
  Speaker 3: And it is making prices go up.
• 19:24
  Speaker 1: So Constellation signed a deal with Amazon that looks very
• 19:27
  Speaker 1: similar to the one it just signed with Google. Does
• 19:30
  Speaker 1: it have capacity to sign any more deals with hyperscalers
• 19:33
  Speaker 1: or has it tapped out for now?
• 19:35
  Speaker 3: They're kind of at the end of the line here.
• 19:37
  Speaker 3: I actually was texting with them this morning because this
• 19:40
  Speaker 3: is like going to involve like 11 plants and the
• 19:44
  Speaker 3: Amazon one was like another one. They don't have an
• 19:46
  Speaker 3: infinite supply of nuclear power plants. They don't have too
• 19:50
  Speaker 3: much more plants that they can upgrade to deliver new
• 19:53
  Speaker 3: nuclear capacity.
• 19:55
  Speaker 6: You were texting with Constellation this morning?
• 19:57
  Speaker 1: Yeah.
• 19:57
  Speaker 6: What did you ask them?
• 19:59
  Speaker 3: I said, are there any left?
• 20:01
  Speaker 2: And?
• 20:01
  Speaker 3: He said, no, this is kind of it. I mean,
• 20:04
  Speaker 3: he mentioned maybe some small ones in another facility. So
• 20:07
  Speaker 3: it's not nothing, but not a lot.
• 20:11
  Speaker 1: So what about plants that have been shut down in
• 20:17
  Speaker 1: the past? Is that something that Constellation can reopen if
• 20:21
  Speaker 1: it wants to? I would imagine that would take a
• 20:23
  Speaker 1: lot of money.
• 20:24
  Speaker 2: Okay.
• 20:24
  Speaker 3: So Constellation owns Three Mile Island, which they've actually renamed
• 20:28
  Speaker 3: the Crane Clean Energy Center.
• 20:30
  Speaker 1: Wait, they renamed Three Mile Island into the Crane Clean
• 20:33
  Speaker 1: Energy Center?
• 20:33
  Speaker 2: Yeah.
• 20:34
  Speaker 3: That's a rebrand.
• 20:34
  Speaker 6: Got to rebrand that.
• 20:35
  Speaker 2: Yeah. Yeah.
• 20:36
  Speaker 6: Rebrand.
• 20:37
  Speaker 3: I'll let you think about why they might want to
• 20:39
  Speaker 3: do that. So that was actually the first big restart project.
• 20:44
  Speaker 3: It's the second big restart project. There's another one in
• 20:47
  Speaker 3: Michigan called Palisades that was shut down. It's being restarted.
• 20:50
  Speaker 3: There's one in Iowa called Dwayne Arnold. NextEra owns that.
• 20:55
  Speaker 3: They're restarting it. They're going to give that money to
• 20:57
  Speaker 3: a tech company for data centers. There are other reactors
• 21:02
  Speaker 3: that shut down, but there aren't other reactors that shut
• 21:05
  Speaker 3: down and are good candidates for restarting.
• 21:09
  Speaker 1: What makes someone a good candidate or a facility a
• 21:11
  Speaker 1: good candidate to restart?
• 21:12
  Speaker 3: Well, for starters, some of the ones that they shut down,
• 21:14
  Speaker 3: they're already tearing them apart. Like there's Indian Point, north
• 21:20
  Speaker 3: of New York City. I can't tell you how many
• 21:22
  Speaker 3: times something has happened and my editor sent me a message,
• 21:25
  Speaker 3: does that mean they're going to restart Indian Point? And
• 21:28
  Speaker 3: I've talked to the folks there and they're like, we're
• 21:30
  Speaker 3: literally tearing it apart day by day. I've seen there.
• 21:33
  Speaker 3: I've been up there. They're heavy machinery. And I asked them,
• 21:38
  Speaker 3: they're like, You give us enough money, we could turn around,
• 21:42
  Speaker 3: but every day it gets harder and more expensive. So
• 21:45
  Speaker 3: I don't see too many more restart candidates.
• 21:49
  Speaker 2: All right.
• 21:49
  Speaker 6: It seems like there's almost a bottomless demand for energy
• 21:53
  Speaker 6: right now.
• 21:54
  Speaker 2: Yes.
• 21:55
  Speaker 6: And a limited supply, or at least we seem to
• 21:57
  Speaker 6: be hitting up against limits of our supply. Where do
• 22:00
  Speaker 6: you see this going? How is this going to play out?
• 22:03
  Speaker 3: Well, we know when there's a lot of supply and
• 22:05
  Speaker 3: a limited demand, the prices go up. And that's what
• 22:09
  Speaker 3: we're seeing. So, I mean, the data centers really want
• 22:12
  Speaker 3: nuclear power because it's clean and it runs around the clock.
• 22:17
  Speaker 3: They really want clean energy because a few years ago
• 22:20
  Speaker 3: they all promised to deliver lots of carbon-free facilities. And
• 22:24
  Speaker 3: now they're like, well, how are we supposed to do that?
• 22:27
  Speaker 3: Wind and solar is good because it's clean. It's not
• 22:30
  Speaker 3: available around the clock. Gas power is cleaner than coal.
• 22:36
  Speaker 3: It runs around the clock. But there's so much demand
• 22:38
  Speaker 3: that you can't get the gas turbines you need for years.
• 22:42
  Speaker 3: They're backlogged for years and years. So it's actually a
• 22:47
  Speaker 3: big issue right now. There's so much demand for electricity,
• 22:51
  Speaker 3: and there's just not enough ways to deliver it in
• 22:54
  Speaker 3: the immediate future.
• 22:55
  Speaker 1: This feels like a good problem for the management teams
• 22:58
  Speaker 1: of these companies to have as opposed to the opposite.
• 23:02
  Speaker 3: I mean, if people want to buy everything you can deliver,
• 23:06
  Speaker 3: that's a good problem, yeah.
• 23:08
  Speaker 1: How are they managing through that?
• 23:10
  Speaker 3: They're trying to come up with ways to deliver power faster.
• 23:14
  Speaker 3: Like the project we announced this morning, the upgrades, they're
• 23:19
  Speaker 3: going to start having power available in 2028. So a
• 23:23
  Speaker 3: year and a half, two years, that's really fast for
• 23:26
  Speaker 3: a nuclear project. Like the Amazon deal, those things don't
• 23:29
  Speaker 3: come online until 2030.
• 23:30
  Speaker 2: Yeah.
• 23:31
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