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It has been a hard few years for climate tech. But we recently got a bright spot: Earlier this month, Gigascale Capital announced it had raised $250 million to build the physical infrastructure driving decarbonization. That was notable in part because Gigscale’s founder is Mike Schroepfer, Meta’s former chief technology officer, who has gone deep on climate tech since leaving the company in 2022.
On this episode of Shift Key, Mike joins Rob to discuss why Gigascale chose this moment to raise $250 million, what’s greenwashing (and what’s not) in AI, what the American manufacturing industry does better than China’s, and why Gigascale has not engaged in “climate hushing.”
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
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Here is an excerpt from their conversation:
Robinson Meyer: Where do you see that innovation happening in the hardware cycle? I mean, we’ve named SpaceX, obviously, but aerospace is, I think, kind of famously one of the last remaining sectors where China is still trying to catch up to Western firms in terms of cost competitiveness, in terms of sophistication. And then when we talk about, like, solar, it sounds like there’s a lot of cost to lose, but it’s still kind of piggybacking on the back of a fundamentally Chinese-dominated process. And obviously the Form Energy story is awesome, they have a great product, but also it’s — I’m not going to say it’s a one-off, but it does seem that they have this battery chemistry that is not related to the lithium-ion chemistry that nobody else has, and they’ve been able to get there first.
America is great at innovation, but we’ve struggled to convert that innovation over the past 10 years in the world of hardware into actually great products. And so, do you have a thesis about how that is going to change going forward, or where in the cycle we need to intervene, or where Gigascale can intervene to make sure that that innovation actually gets carried through into real products that that change the marketplace at climate level scales?
Mike Schroepfer: I mean, I guess I just fundamentally disagree with that statement. Let’s talk about some of the most valuable companies in the world, Nvidia and SpaceX. You know, Nvidia is still one of the world’s best. And I mean, you could say it’s manufactured at TSMC, but it’s fundamentally ... they’re designing a chip, you know. SpaceX is the only company that’s landing rockets every other week, and they’ve been doing it for a decade. Tesla really pioneered the electric vehicle, and I can go on and on and on. In terms of, you know, I built tens of millions of square feet of data center space. AI, the U.S. is still ahead, and AI, probably one of the most consequential technologies. Yes, the AI itself is software, but it’s on the back of massive infrastructure build. Where are all these data centers? They’re in the United States. That’s where all the training is happening, and that involves a bunch of infrastructure build.
Part of why I got into this was, I, you know, it’s reading all this stuff about how the U.S. and the West doesn’t know how to build anything anymore, and everything’s late and expensive. And like, we were out there building data centers, and I was like, these things are like plus or minus 3% on time, on budget, every single time — like, what the heck. And when I like looked at it, the thing everyone is missing is like, yes, when you make every project a special snowflake project, it’s a disaster. Every custom home ... even like electrical projects, right now, you know, if you go spec a transformer, it’s like, you hire an engineer and they write the specs, and they do a design doc, and they send it over, and like, why does this take forever? It’s because it’s like a custom bespoke wedding cake, basically every single time. It’s like, no, no, no, no. What’s the Costco sheet cake equivalent for transformers? I just roll in, and I’m buying them, you know, by the palette.
That’s what Heron Power is doing, is saying, like, no, no, we have a 5-megawatt transformer. It’s software controlled, so your voltages can be determined like at runtime. Cool, cool, you don’t need to custom-design this thing, and that’s an entirely different process. And that’s the way we build data centers, is like every single building looked the same from the sky. It was an L-shaped building, then we made an H-shaped building. It’s four data halls, and we would just like roll through and build the same thing over and over again. But Nvidia, part of the reason so valuable is like the, you know, same chip, basically with a couple small variants in my gaming PC is the thing that’s in my data center, but the core R&D was the same. And when we do that and we concentrate R&D and technical innovation, and then replicate the thing out, the U.S. is sort of unmatched in that.
You can find a full transcript of the episode here.
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Previously on Shift Key: What J.P. Morgan’s Chief Climate Advisor Is Telling Energy Startups
This episode of Shift Key is sponsored by ...
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Music for Shift Key is by Adam Kromelow.
