GE Vernova CEO Scott Strazik: We can meet energy demands of AI

Welcome back to Squawk Box. We are here at the Aspen Ideas Festival. Nearly three months ago, Gee Vernova completed its spin off from GE. The stock now up more than 25% since that since then and join us right now is GE Vernova's CEO, Scott Tracy. Good morning to you, Andrew. Thanks for having me. I'm thrilled to be here. It's it's nice to see you. I think this is your first, first big interview since it since, since, since this all went down. Curious what it's like then before we can get into what's going on in the energy sector, just being a, a CEO of a public company like this now it's fun. I mean, listen, we're, this is a company that matters to the world. I mean, we're electrifying and decarbonizing the world every day and markets that are really growing. So I see clear opportunities for us and we're having a lot of fun. So one of the conversations we keep saying it here is AI, AI, AI is happening wherever we go here at this conference. Yes. And yet one of the underlying issues is that of energy. You bet how much energy is really being used? I spoke to Mustafa Sulliman, who's the CEO now of Microsoft AI, and he seemed to indicate that he didn't think it was a problem like that. We were, we had enough energy that it was going to be OK. Do you think it will be? Well, I think we can meet the growing demand. I mean, there's clearly a lot of load growth that's coming. AI is one of those factors. EVs, just US manufacturing growth, the reserve margins very clearly in the US are coming down. So we're going to have to invest a lot more into the electrical power system, but we've got the ability to do that. We have the technologies to do it. And with these hyperscalers and technology companies and the balance sheet and their operating history partnering with them, we can grow into this electricity demand. But we've got a lot of work to do. And where do you think it's going to come from in terms of clean energy? Well, it's going to be an all of the above technology. The reality is this is going to be a multi step journey. I mean, with the amount of power that's going to be needed this decade, gas is going to be important, right? We'll decarbonize that gas over time with hydrogen and carbon capture. Wind is going to grow and play a real role. Solar is going to be important, but we're also going to move nuclear to the left. Small modular reactor is going to become a much bigger piece of you actually think it will be. No question it will be. We will be commissioned in the first small modular reactor in Ontario, Canada, 2029. It'll be in Canada. That's not here yet, that's in Canada. That'll be the first one. You got to start somewhere and that'll be the first one and then we'll grow from there. But in the US, this is going to be an important part of the equation. Tennessee Valley Authority, TDA will be our customer launch in the US We're working with with them today. Big concerns or questions over wind, especially offshore wind, Yes, and whether that can be a profitable business. And frankly, and we're going to have the debates tonight. There's also a political question given the positions of President Biden, former President Trump on wind energy. You bet. When you think about wind, I mean, it generates about 7% of the world's electricity today. Most projections think it needs to be two to three times that for us to meet our electrification and decarbonization objectives. Wind is an important part of the equation. That said, the whole industry has gone through a difficult chapter. We're working our way through that right now. I see clear pathways of success at the end of the day, the storming and some of the scary headlines you see in the news today, an offshore wind projects getting cancelled, customers losing a lot of money. I actually think that's really what's going to lead to a reset in an industry. So what has to happen as a result? I mean, the, the, the, the, the losses are in the billions. Yes, starts with price. The reality is when you think about offshore wind prices is going to have to be much more analogous to building a nuclear plant, putting carbon capture and gas. Offshore wind prices are. How do you get those prices there without subsidies? Well, I mean, at the end of the day, there are incentives today to really help, no question. Not just. And you think those go, those go away based on this election? No, I think at the end of the day, this is something that there's real infrastructure investments that's going to be required for us to electrify and decarbonize the world. Those there's going to be incentives in many parts of the world to support these industries, including offshore wind. Everybody here is talking about the debate tonight. Yeah, and everyone's also talking about the role of CEOs in either talking about politics and policy. How do you think about that today? I think in the in the electrical power system, governments matter and policy definitely matters. I mean, we've built this electrical power system over 100 years. We need to completely transform it in the next 20. So I certainly spend time in DC, spend time with Republicans and Democrats. But is it, so do you say in this election there there is a, a, a president that it would be better for your company than than another? When we have these conversations and we talk about the investments that are required, especially in the infrastructure for electrical power really comes back to jobs, innovation, energy resilience, energy security and to a large extent national security. And the reality is the investments that are required for the, for the electrical power system, both parties support those investments. So we're focused on serving both parties.