No Priors: Artificial Intelligence | Technology | Startups - Unlocking the Road to Energy Abundance with Base Power CEO and Co-Founder Zach Dell

Episode Date: October 15, 2025

With demand from AI for energy already exploding, our electric grid is facing a crisis. Base Power CEO and co-founder Zach Dell is ready to re-architect its future from the ground up. Zach sits down with Elad Gil to talk about Base Power’s recent $1 billion fundraise from major investors. Zach discusses the role of energy across industries, as well as Base Power's mission to lower electricity costs through vertical integration. Zach and Elad also explore the future of energy, the role of batteries in transforming the grid, and the regulatory challenges facing the energy industry. Plus, Zach pitches why top talent should make their careers in energy generation.   Sign up for new podcasts every week. Email feedback to [e-mail] Follow us on Twitter: @NoPriorsPod | @Saranormous | @EladGil | @ZachBDell | @basepowerco Chapters: 00:00 – Zach Dell Introduction 00:50 – Base Power’s Vision 02:15 – Base Power’s Products and Services  04:00 – What Drew Zach to Working on Power 05:12 – Base Power’s Founding Team 06:58 – Base Power’s Hiring Needs 08:02 – How Zach Hired an Awesome Founding Team 09:51 – How Do We Meet Energy Demands? 12:58 – How Viable is Nuclear Energy? 17:04 – Global Energy Cost Dynamics 17:41 – Future of AI Training Centers 18:32 – What Will Drive Energy Buildout 20:38 – Drivers of Energy Transmission Cost 22:30 – Regulation and the Energy Industry  23:52 – What Zach is Optimistic About in Energy 24:42 – Cultivating Base Power’s Culture 27:26 – Zach’s Philosophy on Capitalization 30:00 – How Base Power Uses Scale 31:57 – Conclusion

Today, in the Pryors, I'm joined by Zach Dell, the founder and CEO of Base Power. Base just announced a $1 billion fundraise from folks like Addition, Thrive, Andreessen Horwitz, Lightspeed, Altimeter, Valor, and myself. Zach previously was at Blackstone, working in different private equity and Thrive, doing investments in various AI and software companies. very excited to talk to him today about not only his company, but also more broadly about the energy industry and how energy is an input into literally everything that we do and consume. That's AI data centers. That's the pencil you're using to write. That's your computer. That's mining. That's basically everything in the world. Energy is a major input. So very excited to talk with Zach today. Zach, thank you so much

for joining me to Dano Pryors. Thanks for having me. Energy is an input into everything in the world that's produced, right? It drives data centers. It drives electric cars, but it also drives all of manufacturing. It the internet. It drives basically every aspect of our lives. And it's a key cost input into everything. So if you have very cheap energy, everything else becomes dramatically cheaper. And that opens up entirely new spheres. You've been working on base energy, excuse me, base power for a couple years now. Can you tell me more about how you landed on what you're doing and what base actually does? Yeah. Our mission is to lower the cost of electricity for all. And we think that is the most powerful thing we can do to promote human prosperity. So to create a world of energy abundance where power is less expensive and more reliable. So I got here by way of finance world. So I started my career at Blackstone. I was on the private equity team there. I spent a couple years at Thrive Capital investing in technology companies and then left Thrive ultimately to start the company with my co-founder, Justin. And I think at those firms, I was able to see a lot of the industry, the value chain of energy, of different kinds of technologies like solar and storage, and see this kind of paradigm shift unfolding, where

if you look at the last five decades of energy, it's really been defined by coal and then natural gas, And it seems pretty clear now that based on where the cost curves are going, the next five decades of energy are going to be defined by solar and storage. And there's really no energy technology platform company built around that thesis. And so that is really the kind of vision and the idea around which we started the company a couple years ago. And you just closed literally a billion dollars in new financing, which I think brings your total over time to $1.3 billion. What is that money going to go to? What products do you provide? What services?

Like what are you currently doing? Yeah. So the capital really is going to accelerate our vertical integration, which allows us to ultimately lower costs for consumers. So our strategy at the highest level is to develop a compounding cost advantage through vertical integration. So we design batteries, we make them, like literally manufacture them, we install them, own them, operate them, and we sell power directly to a homeowner. So to answer your second question specifically, when you sign up with base, we become your electricity provider. So today we're only available in Texas. We're now we sell power to deregulated customers who can choose their electricity provider.

do sell our technology to the regulated utilities in Texas, and then they offer our services to their customers. So when you sign up with base, we install our battery on your home. When the grid's up and running, we use that battery to serve the grid. When the grid goes down, you get that battery to back up your home. And we're able to save our customers on the order of 10 to 20% a month on their electricity. So as we invest further, as we build new generations of the technology, our costs will go down, our returns will go up. We'll be able to share those returns, so to speak, with the customer in the form of lower and lower prices, driving the price of the electron down, driving the availability or the reliability of the electron up, which is really

our mission. And so you basically have these batteries you install in people's homes. It's sort of smart batteries, so it can interact with other batteries across the network, and it basically responds to different power availability and fluctuations and allows you to then make money off of that. Exactly. Yeah. Another way to think about is we're building the world's largest distributed power plant, right?

So we install these energy assets all over the grid, and we use software to connect them effectively and bid them into the market intelligently, and we use all the income that we generate from that to drive down costs for our customers. How did you decide to work on this problem in particular? You had a great vantage point working at Blackstone and Private Equity,

which is a generalist team at Thrive, who've done investments in companies like Open AI and Stripe and others. And so you've seen like a wide swap of the world between those experiences. Who'd you in on energy in this particular? Yeah, it's a great question. I mean, I first got really fascinated

with energy in college and I actually worked on a project in the energy space there and actually worked on a number of projects. One in particular was to develop a solar farm and put panels in the ground and sell the power back to the local utility and do it in this very kind of financially engineering-oriented way. And so I'd been studying the energy value chain, so to speak, from a finance perspective

for a long time. And then I think at Thrive, I was exposed to this pattern match of companies that were going after big incumbent-dominated industries where the leader in the space was not technology-focused, engineering-led, or R&D-driven. And it happened in autos with Tesla. It happened in aerospace with SpaceX. It happened in defense with Anderil. and it wasn't being done in energy.

And it turns out energy is the biggest industry of all of those, and it's the most important. And so I was really inspired to go build that modern power company of the electric era, engineering-led technology focused, R&D-driven, and what I think is the largest and most interesting category in the economy. And as part of that, you had to build a very multidisciplinary team. You have people working on hardware. You have people working on mechanical engineering, on software, on a variety of things. what was the founding team like and how big are you now, what sorts of people? Yeah, this business is a complex coordination problem. We have to be good at a lot of things at the same time.

And so the way to buy down execution risk, so to speak, is to build a world-class team of people across a bunch of different domains. So if you look at myself and my co-founder, we have very different skill sets, right? Justin is very operational and technical. He led manufacturing it, SpaceX. He led manufacturing it. Anderil, our first hired Jared Green, our head of software, led the laser depology team at Starlink's the team that built the mesh that connects all the satellites in space.

Not only is the world-class software engineer, but he understands firmware and mechanical engineering and power electronics. And our next couple of hires, you know, Cole Jones, our head of growth, who ran go-to-market at Starlink, Dana Paz, our head of deployments, who led manufacturing engineering at Anderol. And some other early team members who, you know, Suzanne Dang, who ran procurement at SpaceX for 10 years, are head of supply chain. Andy Ross, our head of manufacturing, who led Model 3 battery manufacturing at Tesla. Dino Sasserides, our head of hardware, who led powerwall engineering at Tesla.

and worked on the design of the Powerwall 3. So we've been able to pull together an incredible group of people with domain expertise across all of these different functions. And I think one of the really special things is that if you think about those five, six leaders of the company, like all of them

were part of our first 10 hires, right? And so as we went from 10 to now 250 people to answer your other question, the culture of the company is really defined by those core leaders and those people who are now leading teams, they were once the IC. They were doing all the IC work.

And now the leaders are still doing IC work. I still do IC work every day. So just Justin, as you know. And so it's a big part of our culture to kind of lead from the front. And we'd able to pull together a really incredible team. That sounds like an amazing mix. There are specific areas that you're hiring for right now or looking for key talented? Yeah.

So as part of our announcement, kind of the big theme here is join the charge, right? It's a call to action to the most talented engineers, operators, and creatives in the world to come join us on what we think is the most interesting, exciting and important mission out there in technology right now. And so we're really hiring across all teams, software, hardware, finance, go-to-market, business development, regulatory policy, deployments engineering, manufacturing engineering, you know, specifically some areas where we're really focused right now are firmware, power electronics, mechanical engineering, design engineering, all kinds of software engineering, basically, everything from, you know, very low-level firmware to, you know, front-end to back-end, cloud engineering, and everything in between. So, you know, right now, as you noted, you know, we've raised, you know, 1.3 billion

in the last 18 or so months. We've got more demand than we can serve. We're standing up. up our first factory in Austin to produce our product at really large scale. And really the constraint is great talent. And so we want to put the word out there that we're open for business and we want to bring more great people down to Austin to join our team. How did you inspire such heavy weights to join you to act as I sees early on? Because often I think founders struggle with both what's the seniority of people to hire as well as how to convince somebody who's actually led a major part of SpaceX or Andrewill or one of these core companies that are still growing like crazy themselves.

You can convince people like that to join you so early. I think it's pretty obvious that the best people want to work on the hardest problems and the biggest, most important miscarons, right? Like very capable people want an opportunity to put a dent in the universe. And what we are going after impacts the whole planet. It impacts industry. It impacts homeowners. It's very visceral.

People think about, you know, well, my power bill has been going up every year the last 10 years. And my power outers are becoming more frequent than they've ever been. Like, this is a problem that actually needs solving. And then, look, I think the best people really largely are most people are looking for three things. One is they want to have fun at work. They want to do interesting work. They want to work with smart people that are nice to be around. They want to be pushed.

They want to be challenged. Number two is just a massive kind of never-ending list of hard problems. I think you see at companies, you know, hire a bunch of really great people, come up with a bunch of really awesome things. And then over time, they kind of struggle to retain the top talent as the problems become less and less interesting. If you peek under the hood at a base, which you have, you know, with the best of them, you'll see that the list of hard problems to solve is really mind-blowing. And we kind of unlock the ability to solve new problems as we enter new markets and release new products and the energy space is big and it's complicated, it's hairy.

So it's a massive bucket of hard problem to solve. And then, look, I think the third is economic upside, right? You know, we're going after what we think can be one of the largest, you know, opportunities in the economy, one of the biggest companies in the world. And if we're successful, you know, it's going to be very big. And so there's a really exciting upside case there for top talent. So as we were discussing earlier, energy is one of the most important markets for humanity or most important industries because it drives everything else. And it drives the cost of everything from AI to the car you're driving to the pencil that you use to write, et cetera, because it's input into everything. You know,

projections that we were discussing earlier said that the demand for energy may be going from a 2% component at annual growth rate a year to closer to 10%. And so the question is, how do we actually fill the supply side of that? Where does all this new production come from to make sure that those needs are met? Yeah. A, do you think those projections are correct? And B, how do you think about how we solve for that? I do think directionally, the demand projections are correct. And I think that, or actually, potentially understated. I think there's a massive amount of electricity demanded coming. Now, how do we serve it is the question. You'll hear people talk all the time about, oh, we're running out of energy. We have no energy. That's not.

really true. We're not using the energy that we have in the most effective way possible. And another way to think about it is, you know, the U.S. grid kind of max peak is somewhere on the order of 700 gigawatts, but average demand across the country is closer to like 300 gigawatts, right? So we've got another 3,400 gigawatts, you know, up to 700 gigawatts if you believe that, you know, that peak is going to grow to a terawatt of latent capacity. And, you know, the way to access that capacity is by time shifting electricity, right, using batteries and software. And so, you know, we think that our technology layer is going to unlock a bunch of latent capacity on the grid, help us meet that demand. But we will also have to

build more generation, right? And there's tons of smart people and interesting companies that are working on. What do you think are the most promising aspects of generation? So, I mean, I think we've seen a lot of this progress happen in solar, right? The solar cost curves have been, you know, aggressive, to say the least, and they've played out, right? And now the cost largely been driven by Chinese subsidies, because I know the Chinese government subsidized a lot of very early solar production. It's been driven by CAPEX. And then by demand curve takes over. Yeah, it's been driven by CAPEX. A lot of the CAPEX has been subsidized by the Chinese government and through Chinese companies. A lot of CAPEX has come from U.S. companies and companies in Europe. And so it's been

driven by CAPEX. I think solar will continue to get cheaper to deploy. Batteries will continue to get cheaper to deploy. And I think Texas is now the biggest deployer of solar. Is that correct? Solar and wind. And wind. And it's interesting because I was looking at these cost curves or projections. And it looks like solar is now a couple years ahead of where people thought it was from a deployment perspective. Do you know what percentage of the U.S. market is now solar in terms of actual energy production? It varies a lot by state. Texas is about 20% right now in the fuel mix. And it's on the higher end.

I think California is higher, closer to 30. And you have states like New Mexico, Nevada, Utah, Arizona that are up in that range. And then, I mean, it's funny. I think you pointed out to that. Sorry, go ahead. Well, if you look at the map of the U.S. and you map solar penetration as a percentage of a fuel mix, it pretty closely maps like where the sun. is, right? A ton of solar in the sunbelt, and you don't have a ton of solar in parts of the

country where the sun is less prevalent. Now, as the cost to land solar and storage on the grid goes down, I think you'll kind of turn on, so to speak, other geographies where solar used to not make sense and now it does make sense. But there's tons of investment going into other forms of generation. Nuclear obviously has been a topic of conversation across the country, and I think there's a lot of great work happening there, but right now it's too expensive. Do you think it will incredibly take off? Because, you know, I looked into the cost structure for nuclear before, and there two or three drivers. One is, honestly, just environmental delays and the cost of debt as you get delayed. And so you have these big project financing things that you raise money for. And then

if you're delayed a couple years, the costs go up so dramatically that it makes it an uneconomical project. And because people are so used to these delays, they always build giant projects. Because we're like, if we're going to take the hip, we may as well take the hit big. People are now moving towards these smaller and more modular reactor systems. Do you think that will actually credibly take off? Because solar was never an issue of safety. I mean, excuse me, there was never an issue of safety. It was never an issue of some aspects of cost. I mean, again, it was almost like these imposed delays through environmental lobby or nimbism or other things that often seem manufactured. But do you think it's kind of dead in the water going

forward? I don't think it's in the water. I hope it takes off. I think it has to get a lot cheaper and it has to get a lot faster. My opinion is that the rate of solar deployment will go up so fast as the cost continue to go down that it might just not matter. It will have so, it'll be so easy and low cost it deploy solar and storage that the economics of building nuclear. reactors just won't make sense. And is storage, really the core component of it? Yeah, because, I mean, you have to, you know, the sun is only shining so many hours of the day, right?

So you need, you need storage to, to confirm that solar. And that's because you can't really transmit, like, long distances on the grid, right? And so I think that's the transmission costs. Yeah. And so what matters is the landed cost of the electron, right? And so solar and storage is the way that you get that landed cost down. And I hope that we're able to come up with breakthroughs and nuclear to drive down the landed cost of a nuclear generated electron.

But right now we're not in a world where it's really competitive with solar. But at base, like, we are fans of all kinds of energy generation, right? We're really more competitive, so to speak, with poles and wires than we are with solar, wind, nuclear, geothermal, hydroelectric, et cetera. Batteries move energy through time, right? Poles and wires move energy through space. If you're generating all your electrons via a nuclear reactor, you still need to move that power, right?

Because unless you have reactors everywhere in everyone's backyard, which, you know, I don't think is all that likely, you have to have a lot of these reactors everywhere. You need to move the power, you have to match up the generation of the power with the supply with the demand, right? And so we think having storage demand side really helps you smooth that curve out. So you're basically really moving from a centralized grid to a distributed grid. Correct. And that's the core insight of what you all are doing. And to your point, solar is the best way to create that a core insight for energy generation in general. That's right. Yeah. And you'll see us over time come out with new products that are distributed

in manner, technology defined, that help us lower the cost of and increase the reliability of energy. If you look at a lot of the things that people talk about as things that open up, with lower energy or open up entirely new markets. I mean, one is just AI and data centers with these massive buildouts. We're going to need energy for them. There's things like desalination. Like, you should be able to produce water

anywhere where there's like an ocean or anything else. Yeah, green hydrogen, electrolysis. I mean, the cost per megawatt and per kilowatt is an input to all these processes. And as we drive that cost down, you know, take desalimization. For example, right now it's kind of an emergency use case every once in a while thing.

if it was five times cheaper, like this would be something that we did all the time in lots of places. Now, again, geographically defined, where do you have salt water, where do you now have it? But, you know, we'll see a massive boom in large-scale infrastructure technology projects as we drive down the cost of electricity. And, you know, boring stuff, too, like heavy industry and building, you know, refineries and things like that that really matter that keep the economy going. We'll just see more of it as we drive down the cost of electricity. And do you think those will all centralize next to cheap energy or cheap power? It's nuanced. I think at the limit, yes, more of the highly capital-intense energy-dependent use cases will go towards a low-cost energy parts of the world. And I do think you'll have energy hubs where there's, you know, a ton of highly available low-cost power and a bunch of heavy industry goes there. But as you know, there's nuance in all these things and there's technology. There's geographic implications here where it's like, well, you need X, Y, or Z in X, Y, or Z place because of this other reason that does not. have to do with the cost of electricity. So I think largely it will concentrate to the low-cost

electricity places. What do you view is the low-cost electricity places of the globe today? Right now, unfortunately, it's China. And we got to make the United States. Is that because of solar? It's supply and demand. It's because they built that a massive amounts of supply. And it's all the above, right? They built nuclear reactors. They built solar farms. They built wind farms. They built a ton of battery storage. They have tons of high-voltage transmission. And so our hope and really what we're working on is kind of stimulating this build out of the U.S. I think Texas will be a low-cost place to build energy technology, but build all technology due to the cost of energy.

And I think other parts of the country will pop up as energy hubs as different states and policymakers and regulators really embrace that. Okay. And then one thing that I've heard some people talking about increasingly is if you look at the cost of energy and then you look at the overlay regulation, especially relative to AI, it suggests that a lot of the big, at least training center buildouts where you take a bunch of data and you train a new model on it are going to basically happen in the U.S. in the Gulf. They're not going to happen in Europe because of rising energy costs as well as

because of some of the extra regulations. It's not going to happen in parts of Asia because of security or other concerns. Do you think that's a correct view of the future in terms of most AI training is just going to be in two parts of the world and they're going to be effectively a U.S. domain? I think the highly energy intense workloads will converge around the low-cost electricity places. You'll see a lot of that go to the Gulf. You'll see a lot of that. Go to Texas. And you're seeing that now, right, with Stargate and Abilene and all the big projects that have been announced in the Gulf. So I do think that that is likely to continue playing out in that way. Yeah. And then what do you think are the biggest drivers of future energy adoption

from a technology perspective? And then I'd love to get your perspective from a regulatory perspective. You mean what will drive more build out of energy technology? Like what's lacking today or what technology is most promising or what do you think are the most interesting ships happening from yeah. I mean, besides what you're doing in my book a little bit. I think batteries are the key. Batteries are the unlocked to the energy transition and will continue to drive out cost. both the hard cost and the soft cost, right? I mean, you have the cells and the modules and the power electronics and the bus bars and the current collectors

and all the things that go into a battery, but then you have the EPC cost, you know, getting the battery in the ground, the logistics, the transportation, all the software that goes on top of it, monetizing these assets, and there's cost to attack in all parts of the stack. And so I think that battery storage will define the next chapter of the energy transition.

And I'm super hopeful that new kinds of generation will break through as super economic, and I hope that breakthroughs happen in nuclear. And, you know, there's some interesting companies working on geothermal and hydroelectric. And I think that has a lot of promise. But, you know, as we discussed, energy is a geographically defined problem in parts of the Pacific Northwest. And in Canada, where there's tons of hydro, it makes a ton of sense to use that as a generation type. And, you know, in Texas, you don't have a lot of that, but you do have a bunch of wind and a bunch of solar. And so I think it'll look a little different in different parts of the world.

But really, you know, another way to think about this is like, look at the cost of an electron, right? basically anywhere across the country the cot is really made up of two components one is the cost to make the electron the second is the cost to move the electron the cost to make the electron has gone down really significantly of the last 20 years largely driven by the build out of solar

but the cost to move the electron has gone up very significantly because our infrastructure is aging and utilities have this kind of perverse incentive structure to build instead of innovate and so costs are going up you know the generation technology

solar wind nuclear hydrogeothermal they're really attacking the cost to make it we're really attacking the cost to move it this one's going down already. This one is going up. So I think most of the opportunity is to innovate and to drive out costs, which really all that matters in the commodity industry, which energy is, is opportunities around transmission, distribution, and power and driving those costs down. Could you talk more about the incentives that exist for utilities and why the costs of transmission are actually going up versus down? Yeah. Utilities are regulated monopolies.

And the way that the regulated entities work is that they earn a rate of return, a pre-definite rate of return on the CAPEX that they invest in that's set through some regulation. Yes, by the Public Utility Commission typically in the given state. And so, and this is kind of all governed by FERC, the Federal Energy Regulatory Commission outside of Texas, which is not governed by FERC, so it's some complexity here. What is the reasoning behind regulating the rate of return that a utility can have? Like, why don't they want it to be higher? Well, they do want it to be higher, and they often argue that it should be higher. I mean, there's a big history lesson here, which is kind of how the grid was built on in the early 1900s and then World War II and the Fed

basically ask all the grids, the Eastern Interconnect and the Western Interconnect and Texas to connect. And Texas basically said, no, we're going to have our own grid. And then, you know, Urquot was born in the 70s and in the late 90s or early 2000s, Bush and Rick Perry and some other cowboys in Texas basically said, hey, we're going to have a competitive industry. We're going to competitive market. We're going to deregulate this thing. We're going to invite competition. We're going to open it up to price signals. That's why you saw so much investment in the early 2000s. So that happened in Texas specifically. Why didn't that happen in the rest of the country?

Well, it started in California, actually. then Iran happened. And that put it into that pretty quickly, but Texas carried the torch. And so you had a massive buildout of solar and wind in Texas in the early 2000s. And I think that was really constructive for the industry. And, you know, will that happen in other parts of the country? I don't know. I think there is reason for regulation in some parts of this. And, you know, if you have neighborhoods, like, it doesn't make sense to have seven different power lines running through the neighborhood, right? It's like you should have shared infrastructure to some extent, but it's an old, highly regular. I mean, it's really the only part of the economy that is still

regulated in this way, right? If you look at trucking or airlines or telecom, you know, all of these industries deregulated over the last 50 years except electricity. What do you think prevented it? I think there's some just like market fundamentals that we talked about around like, you know, don't have more than one wire going to a home kind of thing. Partially just the difficulty of building out this infrastructure. I mean, the grid is the most complicated engineering machine ever built. It's it is a wild, wild system. And maintaining it and expanding it is really hard. And so I can see why it makes sense to do that in a kind of concentrated or at least, you know, regulated, centralized way. But there are other parts of the country that have some amount of retail

competition in the Northeast. And you are seeing some, you know, more, more innovation happen in those areas. What do you think are the regulations that are most prohibitive in terms of our energy future? So if you're able to remove two or three regulations, what would they be? Yeah, I think we got to make it way easier to permit building energy technology. Like we need, you know, we talk about demand going up. We need more supply, right? Well, what's holding back supply. A lot of is permanent. Just like interconnection cues need to go be shorter, permits need to go faster. That I think is one of the biggest things. And then the broader point I'd make is exposure to price signals, right? Like more competition. You know, markets are reasonably

efficient and giving market participants access to price signals such that they can, you know, monetize flexibility. And really what I mean by that is if you're able to move when you consume power around when power is available, you should be compensated for that. And that's not really the way the industry works today, and I think it hopefully will move in that direction. What are you most optimistic for or thinking about from a positive perspective for the energy future of this coming? I'm a pretty optimistic guy by nature, and I really am inspired by and believe in kind of human ingenuity. You know, over the last 50 years, the electricity industry has not been the place that the most talented engineers and operators have gone, you know,

out of school or, you know, breaking into their career. It's not like, I'm going to go work in electricity. I'm going to go work in utility. So I have a ton of optimism that comes. I have a ton of optimism that comes from this idea that the nation and our kind of really talented young people will wait up to the idea that this is an incredibly important problem and we need to send our best and brightest to go work on it. And I hope a lot of them come work at base, but I hope other companies get started in this space to attract the best and the brightest to come solve these really hard engineering problems in the category, in the energy space to help drive cost down and reliability up. So I visited your office a few times now. And one of the things that

released it out to me is the energy that you feel is, no pun intended. As you sort of walk around, everybody seems very motivated, very driven, very on it. And it's kind of like a buzzy space and culture. How did you guys? Was that purposeful? Did that just happen through the people that you hire? Like, how did you approach that? A bit of both. I think culture largely is the people that you hire and those people define kind of the early culture. And then you can, it's a bit of nature nurture, right? You can kind of tend to the culture and make sure it gets better and moves in the direction and you want it. And so I'd say, you know, the things that we really value as part of our culture. You know, the first thing that comes to mind is working with urgency and focus,

right? And I think it's really easy to have urgency without focus. And companies often get themselves into trouble by just like, you know, the whole 996 thing and the like, like, yeah, we do 996. We probably do more than 996, but we don't really talk about it in that way. And it's like just kind of natural to how we operate. But we have an extreme focus. And we ruthlessly prioritize the most important things. Everyone at the company knows what the North Stars of business are. They know how the thing they're working on ladders up to the North stars, we talk about our business very openly. So, you know, as you've seen, team has lunch and dinner together, lunch, dinner, table conversations are really about like our long-term vision.

Where are we going? What kind of new things should we be thinking about? And, you know, you walk around in the office and the place looks like a Best Buy because there's just TVs everywhere, as you've seen, right? Metrics everywhere, all the stuff that matters at the company is visible for everyone to see. And so that gives you a level of focus where it's like, if it's on a TV, it must matter. And it was on TV, it probably doesn't matter, right? And that really helps people prioritize. And then I think, you know, we try to be an organization that people, yeah, I say the word organization that kind of makes my skin crawl, right? Like, we try to be small and lean and nimble. But as a group, we, we see can get feedback, right, to each other. And we're really open

with each other. And it's a very flat structure. You know, I sit next to and work with interned all the time. And, you know, there's not like a, oh, managers, manager, manager kind of concept where people are very open with each other. And we really invest in young talent and try to train them directly with like very quick kind of open direct feedback. And that has helped a lot of us, including myself, level up in a very short amount of time. A lot of us are young and largely in experience. And so we learn from each other kind of in real time. And I think, you know, we think about our business as a competitive endeavor, right? Like we are competitors and we are here to win. And we frame a lot of the stuff we're doing in terms of competition. And we're not

afraid to say that. And we're very proud of that. And I think that's a very unique part of our culture. And the last thing I'll say is we like to have fun. And, you know, we like to laugh and smile and high five and make jokes. And, you know, we take our work very seriously, but we don't take ourselves too seriously. And I think people love being a part of that. They want to have fun at work, right? If you're going to be there, you know, five, six, seven days a week, like, you better be having fun. And so over the last 18 months, you've raised $1.3 billion, I think $1 billion just now that you're announcing. And it was from a real who's who list. It's thrive, valor, addition, light speed, Altimeter, A16Z, I'm lucky enough to, or me and my firm are lucky enough to be involved.

And I think the fact that you have this private equity and investment background means that you view the lens of capitalization, how you raise money for a company very differently. And that's not only the traditional venture money, which you sell shares in the company in exchange for cash, but also using debt or other more complex structures relative to what you're doing. So I'd love to hear more about how you think about that. Yeah. So we are in a highly capital-intense industry.

And our ability to access low-cost capital is a real, competitive advantage. So that differently, if you and I are building a thing to go sell to someone else, and you have to pay 10% interest on the capital to build the thing, and I only have to pay 5% interest on the capital to build that thing, I'm going to have more money left over. I can charge less for the product, and I can outcompete you. Right. So in this endeavor, we have to figure out a way to access really low-cost capital over time, but there are different kinds of capital. Right. So when we make investments, we invest in operating expenses, OPEX, which is the cost to run the business day to day, pay the engineers, pay the rent, buy the snacks,

that kind of thing. And then we have capital expenditures, CAPEX, which is really the large investments we make in batteries and inverters and manufacturing lines and all the imports to go into those things. On an operating basis, on the OPEC side, we have a pretty clear path to operating profitability and actually, you know, near-term timeline because the business, you know, generates a lot of cash and revenue and our operating base is low and we're quite efficient. And so we can, that, the business can be profitable quite quickly. And then on the CAP-X side, our ability to raise and deploy low-cost capital here is just a massive, massive competitive advantage, right?

So, you know, one thing I've said to the team is like, this billion dollars is necessary but not sufficient to achieve our mission. You know, in the game that we're playing, which is to build a global energy technology market leader, a billion dollars is the ante to sit at the poker table, right? We're competing against the biggest and most well-capitalized companies on the planet. And so we have to run down that cost of capital curve very quickly and raise billions of dollars in a short timeline to be able to compete with them. So over time, as we prove out the predictability and strength and kind of value of our

cash flows, we will be able to access those lower cost pools of capital, which are typically the largest kind of pools of capital in the world. The largest pools have the lowest cost, right? And so as we access those, we'll continue to invest in CAPEX while, you know, getting to operating profitability on the OPEC side and be in a position to really control our destiny in the capital markets. Yeah, it's amazing. I think there's a lot of businesses that people talk about is having scale effects.

and the bigger the scale, the more the economics of the business get better, right? And so you mentioned one example. Steelmaking has some aspects of this, depending on the model that you're doing. Payments, actually. Yep. Has this model, the more payments that you have, the lawyer interchange fees go on the back end. So if you're Stripe or someone else, you get a real advantage from having real scale. So it's interesting to see how you folks are really using that to your advantage.

Totally. I think you see this mostly in commodity industries where cost is a source of competitive advantage, right? And what we sell is a commodity. There's no sexy electrons, right? electricity is a commodity. I think so. Right. It depends on who you ask.

Right. So our whole strategy is built around driving the cost down for the customer. And as we get to more scale, our cost structure goes down, right? Scale economies. As our cost structure goes down, our returns go up. As our returns go up, we pass those returns onto the customer in the form of lower prices. When you have lower prices and you're selling a commodity product, you get more demand. You get more scale.

You get more scale. Your cost go down, right? And that's the fly wheel that you create. And so, you know, why raise $1.3 billion in 18 months? It's like, well, because we need to get that flywheel going really fast because we got, you know, to compete with these really large, well-capitalized companies. Now, we're doing a ton of stuff with technology, obviously, to come down the cost curve in a way that they can't. And that's really how we win. That's the real advantage then.

Exactly. This is the technology development and innovation versus just the money basis, which is useful. Like 90% of the cost down comes from technology and innovation and 10% comes from cost to capital. But you really, you want that 10% too. And if you can't, you know, like I said, about the ante is like if you can't get the billion dollars and you can't really go compete on a business. global scale, you're not going to be relevant. Zach, thanks so much for doing me, No Pryors. Thank you for having me.

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