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Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets.

On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets.

Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.

Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.

Today, we'll look at why shares of the Danis drugmaker Novo Nordisk could drop the most since late December.

Today, we'll look at why shares of the Danis drugmaker Novo Nordisk could drop the most since late December.

Plus we'll discuss why the department Storeles gave a week sales outlook for the year.

Plus we'll discuss why the department Storeles gave a week sales outlook for the year.

But first we begin with the computer technology company Oracle.

But first we begin with the computer technology company Oracle.

This week, the company shares fell out here gave a sales and profit forecast for the current quarter that fell short, and analyst expectations for more.

This week, the company shares fell out here gave a sales and profit forecast for the current quarter that fell short, and analyst expectations for more.

Guest hosts Isabelle Lee and I were joined by Anna Rock RNA Bloomberg Intelligence Technology Analysts. We first asked Anorrock for his take on Oracle and why investors reacted negatively to its earnings.

Guest hosts Isabelle Lee and I were joined by Anna Rock RNA Bloomberg Intelligence Technology Analysts. We first asked Anorrock for his take on Oracle and why investors reacted negatively to its earnings.

Yeah, the little bit likeness in for Q that you alluded to is primarily due to supply challenges, which is, you know, the data center expansion everybody's undertaking, so the realization of revenues from that. I'm to be honest, a bit surprised about the stock reaction because the company gave two or three really interesting nuggets for us to chew on. The first one was very large bookings in quarter or so their remaining performance obligations of the contracts booked, you know, spiked up sixty three one hundred and thirty billion, and along with that for their FI twenty six which starts in June, and FY twenty seven, they talked about sales growth of fifteen percent twenty percent, respectively. So those are very strong numbers. So we are a bit surprised about the reaction.

Yeah, the little bit likeness in for Q that you alluded to is primarily due to supply challenges, which is, you know, the data center expansion everybody's undertaking, so the realization of revenues from that. I'm to be honest, a bit surprised about the stock reaction because the company gave two or three really interesting nuggets for us to chew on. The first one was very large bookings in quarter or so their remaining performance obligations of the contracts booked, you know, spiked up sixty three one hundred and thirty billion, and along with that for their FI twenty six which starts in June, and FY twenty seven, they talked about sales growth of fifteen percent twenty percent, respectively. So those are very strong numbers. So we are a bit surprised about the reaction.

How did Oracle and other companies really react to Chinese upstart Deep Seek. I mean they release an open source AA and that torpedo basically the whole a outlook that I mentioned it under earnings call and any of their statements.

How did Oracle and other companies really react to Chinese upstart Deep Seek. I mean they release an open source AA and that torpedo basically the whole a outlook that I mentioned it under earnings call and any of their statements.

Yeah, so they were already talking about some of that impact. But these guys reported very strong bookings. But I think your question is probably the most important one right now, because I think one reason for the stock selling off despite these bookings could be, you know, do this does this trait continue going forward in the next two years or so? And I think that's really why people may be skeptical that there twenty percent growth they are talking about two years from now. You know how dependable that is depending on you know, do the companies such as the cloud vendors keep on spending very aggressively on capital.

Yeah, so they were already talking about some of that impact. But these guys reported very strong bookings. But I think your question is probably the most important one right now, because I think one reason for the stock selling off despite these bookings could be, you know, do this does this trait continue going forward in the next two years or so? And I think that's really why people may be skeptical that there twenty percent growth they are talking about two years from now. You know how dependable that is depending on you know, do the companies such as the cloud vendors keep on spending very aggressively on capital.

Expenditures, margins, profit margins? Would you learn at Oracle kind of some folks are calling that out.

Expenditures, margins, profit margins? Would you learn at Oracle kind of some folks are calling that out.

Yeah, so we we.

Yeah, so we we.

Think that to go down next year. They really did not address that issue because I think they're going to talk about it in four Q See when you take up your capis from seven billion to fourteen to sixteen to twenty over the next know, just let's say two years, it's going to have an impact on profitability because the business that's coming in it's less profitable than your core database business or your applications business. So we think margin is going to be dented by one hundred to two hundred basis points next year. Consensus doesn't have that figured it in their outlook at this point. We think those numbers do come down.

Think that to go down next year. They really did not address that issue because I think they're going to talk about it in four Q See when you take up your capis from seven billion to fourteen to sixteen to twenty over the next know, just let's say two years, it's going to have an impact on profitability because the business that's coming in it's less profitable than your core database business or your applications business. So we think margin is going to be dented by one hundred to two hundred basis points next year. Consensus doesn't have that figured it in their outlook at this point. We think those numbers do come down.

Our Thanks to anorog Run, a Bloomberg Intelligence technology analyst.

Our Thanks to anorog Run, a Bloomberg Intelligence technology analyst.

This week, I was at Sarah Week's Global Energy Conference in Houston, Texas. It's where all the energy CEOs and officials meet to discuss policy and make deals, and I had the pleasure I was speaking with Larry Coben, CEO of Energy Energy.

This week, I was at Sarah Week's Global Energy Conference in Houston, Texas. It's where all the energy CEOs and officials meet to discuss policy and make deals, and I had the pleasure I was speaking with Larry Coben, CEO of Energy Energy.

Energy Energy is involved in energy generation and retail electricity, and it provides energy and related services to residential, industrial, and commercial customers.

Energy Energy is involved in energy generation and retail electricity, and it provides energy and related services to residential, industrial, and commercial customers.

Larry Coben and I discussed power demand and energy and I first asked him if rising power growth is driven primarily by data demand and AI.

Larry Coben and I discussed power demand and energy and I first asked him if rising power growth is driven primarily by data demand and AI.

I think it's a lot of things. It's also on shoring of manufacturing. For example, here in Texas, there's a one gig Samsung plant that's going to be opened in a couple of years. It's the Internet of Things, it's smart homes, people are just it's electric cars. People are just using more electricity in ways that they never did before. And as a result of that, that's part of the demand cycle. Obviously, data centers are a big part of it. But data centers aside. All of the people who build data centers also are involved with cloud and a whole slew of other services search that we don't think about because we've had them for so long, but growth for those is increasing every.

I think it's a lot of things. It's also on shoring of manufacturing. For example, here in Texas, there's a one gig Samsung plant that's going to be opened in a couple of years. It's the Internet of Things, it's smart homes, people are just it's electric cars. People are just using more electricity in ways that they never did before. And as a result of that, that's part of the demand cycle. Obviously, data centers are a big part of it. But data centers aside. All of the people who build data centers also are involved with cloud and a whole slew of other services search that we don't think about because we've had them for so long, but growth for those is increasing every.

Bit as much.

Bit as much.

And you guys are one of the largest independent power producers in the United States, right, so you can really take advantage of this. Where is the biggest demand for what kind of power? Give me some insights into the conversations you're having right now.

And you guys are one of the largest independent power producers in the United States, right, so you can really take advantage of this. Where is the biggest demand for what kind of power? Give me some insights into the conversations you're having right now.

Sure, I think you know competitive markets. The two biggest ones would be Texas and PJAM in the northeast. Texas is a primary focus for us that we do have a strong PJM presence. One of the things we like about Texas is it has a friendlier permitting environment and it has one Public Utilities Commission.

Sure, I think you know competitive markets. The two biggest ones would be Texas and PJAM in the northeast. Texas is a primary focus for us that we do have a strong PJM presence. One of the things we like about Texas is it has a friendlier permitting environment and it has one Public Utilities Commission.

And one governor.

And one governor.

Urkatt has thirteen states in it, plus the District of Columbia. So that's fourteen commissions, fourteen governor like people, and FIRK, which doesn't have any jurisdiction here. So but I think you're going to see data centers in all of these places and every and in other places where economic growth is going on.

Urkatt has thirteen states in it, plus the District of Columbia. So that's fourteen commissions, fourteen governor like people, and FIRK, which doesn't have any jurisdiction here. So but I think you're going to see data centers in all of these places and every and in other places where economic growth is going on.

It's not going to be limited. But I think Texas is going to be first.

It's not going to be limited. But I think Texas is going to be first.

Do you think that the hyperscaler hype about how much they're going to spend on power demand is real.

Do you think that the hyperscaler hype about how much they're going to spend on power demand is real.

Right to fall short?

Right to fall short?

I think yes, I mean it won't. It will not fall short. It may even go up.

I think yes, I mean it won't. It will not fall short. It may even go up.

Okay.

Okay.

And the reason I think that is, you know, it's interesting after Deep Seek, everybody was super concerned about that, and then three of the hyperscalers came out.

And the reason I think that is, you know, it's interesting after Deep Seek, everybody was super concerned about that, and then three of the hyperscalers came out.

Essentially doubled their capital commitments.

Essentially doubled their capital commitments.

Now if they actually, after looking at Deepseek, decide it's going to be twice as much, then that gives me a great deal of comfort.

Now if they actually, after looking at Deepseek, decide it's going to be twice as much, then that gives me a great deal of comfort.

The power demand is going to be there.

The power demand is going to be there.

And you know, I know everybody's talking about GEVNS paradox because everyone has now googled it for the first time. I'm actually old enough to remember what it was originally. But you know, I think people will start using this more and more. I already see it in our business. We are using enormous amounts of AI and customer service and we're only just scratching the surface.

And you know, I know everybody's talking about GEVNS paradox because everyone has now googled it for the first time. I'm actually old enough to remember what it was originally. But you know, I think people will start using this more and more. I already see it in our business. We are using enormous amounts of AI and customer service and we're only just scratching the surface.

Speaking of you're going to be developing five point four gigawatts by twenty thirty two, right, how much of that is going to be fully contracted and how much of that will be more merchants spot price?

Speaking of you're going to be developing five point four gigawatts by twenty thirty two, right, how much of that is going to be fully contracted and how much of that will be more merchants spot price?

You know, we have.

You know, we have.

One point five gigs that is shovel ready that will probably go Most of that will go directly into the Texas market. Okay, anything we build beyond that, I would anticipate would be fully contracted for related either to a data center or another kind.

One point five gigs that is shovel ready that will probably go Most of that will go directly into the Texas market. Okay, anything we build beyond that, I would anticipate would be fully contracted for related either to a data center or another kind.

Of large user along the way. We are not in.

Of large user along the way. We are not in.

The business of taking merchant risks some of the other folks are. We actually like to protect our downside and give ourselves a lot of optionality to the upside so that we don't have to care whether the growth is two percent or ten percent. Both of those are ginormous for us.

The business of taking merchant risks some of the other folks are. We actually like to protect our downside and give ourselves a lot of optionality to the upside so that we don't have to care whether the growth is two percent or ten percent. Both of those are ginormous for us.

So what kind of pricing are we talking about for a gas fire plant.

So what kind of pricing are we talking about for a gas fire plant.

For renewable for other power? Like, what does it look like right now?

For renewable for other power? Like, what does it look like right now?

I mean gas fired plants. We think they're going to be done for fifteen hundred to two thousand a kW installed. The ones that are shovel ready because we started on them five years ago will be much less. But if you're not in the business actively doing it, you're going to have a hard time hitting the top end of the range. Renewable pricing hasn't changed dramatically. It's just that the load curve is changing as people need. There's more twenty four to seven power use coming in. And you know, sun doesn't shine at night, wind doesn't always blow.

I mean gas fired plants. We think they're going to be done for fifteen hundred to two thousand a kW installed. The ones that are shovel ready because we started on them five years ago will be much less. But if you're not in the business actively doing it, you're going to have a hard time hitting the top end of the range. Renewable pricing hasn't changed dramatically. It's just that the load curve is changing as people need. There's more twenty four to seven power use coming in. And you know, sun doesn't shine at night, wind doesn't always blow.

But renewables aren't dead. They're going to be sure.

But renewables aren't dead. They're going to be sure.

Yes, actually I am sure, okay, because there's still a place for them when they're working in conjunction with gas plants, I mean part of our portfolio. Now we actually shut off our fossil fuel plants during the day when there's a lot of salta in win in Texas. We buy from the grid their power and sell it to our customers, generating it ourselves. Those options are still going to be available, at least in competitive markets.

Yes, actually I am sure, okay, because there's still a place for them when they're working in conjunction with gas plants, I mean part of our portfolio. Now we actually shut off our fossil fuel plants during the day when there's a lot of salta in win in Texas. We buy from the grid their power and sell it to our customers, generating it ourselves. Those options are still going to be available, at least in competitive markets.

Well, speaking of your renewable unit is thirty percent of your annual earnings right, and it's twenty percent of the renewable market share here in the US.

Well, speaking of your renewable unit is thirty percent of your annual earnings right, and it's twenty percent of the renewable market share here in the US.

How much do you think that can grow for you?

How much do you think that can grow for you?

I are renewable. You know, we generally actually contract for renewables rather than own them. It's a strange thing because we own two coal plants. Everyone else gets cheaper renewable capital than we do, even though we're a big company and quite good at this, and as a result, what we generally do is contract for that power from other developers.

I are renewable. You know, we generally actually contract for renewables rather than own them. It's a strange thing because we own two coal plants. Everyone else gets cheaper renewable capital than we do, even though we're a big company and quite good at this, and as a result, what we generally do is contract for that power from other developers.

Right now, we've.

Right now, we've.

Got two gigs and we're probably going to have a solicitation for more going forward. So I still see it as an integral part of our strategy, and a lot of them also will be driven by what the customers want. So the end of the day, we are in the customer service business, not the electricity business. So it's our job to sell you the kind of electrons that you want in terms of you know, time, place, and and fuel generation. So if you want green electrons, decarbonized electrons, we will have them and we will sell.

Got two gigs and we're probably going to have a solicitation for more going forward. So I still see it as an integral part of our strategy, and a lot of them also will be driven by what the customers want. So the end of the day, we are in the customer service business, not the electricity business. So it's our job to sell you the kind of electrons that you want in terms of you know, time, place, and and fuel generation. So if you want green electrons, decarbonized electrons, we will have them and we will sell.

Them to you.

Them to you.

Thank you.

Thank you.

In terms of in terms of the actual agreements, how many agreements are you talking about that's like, hey, we're going to sign like yeah, yeah, well we like your electricity will sign in versus like firm demand.

In terms of in terms of the actual agreements, how many agreements are you talking about that's like, hey, we're going to sign like yeah, yeah, well we like your electricity will sign in versus like firm demand.

Here's your paycheck.

Here's your paycheck.

You know we do this every day.

You know we do this every day.

We actually supply power already to every one of the hyperscalers. We have the second largest commercial CNI electricity book in the country and the largest natural gas one. So we sign those kind of arrangements. Some of them are short terms, some of them are long term. I think the new data center ones will all be at least ten and probably closer to twenty years.

We actually supply power already to every one of the hyperscalers. We have the second largest commercial CNI electricity book in the country and the largest natural gas one. So we sign those kind of arrangements. Some of them are short terms, some of them are long term. I think the new data center ones will all be at least ten and probably closer to twenty years.

ABE is we won't.

ABE is we won't.

Want to dedicate our site to something that's less than that. B. We won't want to build a dedicated power plant for less than that. And see if you're going to pay all that money for those chips and to build a data center, which actually costs more than a power plant, you're going to want that kind of stability.

Want to dedicate our site to something that's less than that. B. We won't want to build a dedicated power plant for less than that. And see if you're going to pay all that money for those chips and to build a data center, which actually costs more than a power plant, you're going to want that kind of stability.

For an extended period of time.

For an extended period of time.

So I think a lot of those are going to be fixed price deals off market with power scale. They will still be in front of the meter because people will want to be connected to the grid, but they will definitely be long term fixed contracts.

So I think a lot of those are going to be fixed price deals off market with power scale. They will still be in front of the meter because people will want to be connected to the grid, but they will definitely be long term fixed contracts.

How soon you're signing more.

How soon you're signing more.

Of those.

Of those.

Stay tuned? Fair question?

Stay tuned? Fair question?

You know my next earning is call is may it will not be then, okay, but you know we're working on these as fast as we possibly can.

You know my next earning is call is may it will not be then, okay, but you know we're working on these as fast as we possibly can.

They're complicated.

They're complicated.

People, you know, think electricity is just like flicking a switch. It's super complicated. But we are making substantial progress towards some very interesting trends. Actions talking both to hyper scalers and to developers were.

People, you know, think electricity is just like flicking a switch. It's super complicated. But we are making substantial progress towards some very interesting trends. Actions talking both to hyper scalers and to developers were.

I let you go, though. What makes it complicated? Is it the pricing?

I let you go, though. What makes it complicated? Is it the pricing?

Is it?

Is it?

How to structure the deal?

How to structure the deal?

Like is your power going to the grid and then selling back to the hyper scale?

Like is your power going to the grid and then selling back to the hyper scale?

Like?

Like?

What makes it so hard?

What makes it so hard?

You need interconnection agreement, You need a construction agreement, you need a turbine agreement. Now you know we have all of these in place generically, but they all need to be site specific. You need to decide how big a data center you want to put on the site. How fast are you going to grow that data center? So are you going to start at two hundred megs and go up two hundred a year? Do you want to start at a gig? So what makes it complicated is putting all of those pieces together. And what people forget is actually for this type of data center is new, unlike existing data centers where people have done lots of them. There aren't a lot of AI data centers out there yet. But it's complicated, but so is general power plant development. All the permitting in those things. So it's nothing that we're worried about, something we actually think we're pretty good at.

You need interconnection agreement, You need a construction agreement, you need a turbine agreement. Now you know we have all of these in place generically, but they all need to be site specific. You need to decide how big a data center you want to put on the site. How fast are you going to grow that data center? So are you going to start at two hundred megs and go up two hundred a year? Do you want to start at a gig? So what makes it complicated is putting all of those pieces together. And what people forget is actually for this type of data center is new, unlike existing data centers where people have done lots of them. There aren't a lot of AI data centers out there yet. But it's complicated, but so is general power plant development. All the permitting in those things. So it's nothing that we're worried about, something we actually think we're pretty good at.

But hyberkailers are willing to put down that money. You're showing up knocking on your door.

But hyberkailers are willing to put down that money. You're showing up knocking on your door.

They're there, they're there. Okay, they're there.

They're there, they're there. Okay, they're there.

We're there, and you know, because of the agreements Wen asked last week, the turbines and the contractors are there.

We're there, and you know, because of the agreements Wen asked last week, the turbines and the contractors are there.

All right, thanks to Larry Coben, CEO of nerg Energy. All right, coming up, we're gonna have more from the Sarah Week Energy Conference and a conversation with CEO of ge Vernova.

All right, thanks to Larry Coben, CEO of nerg Energy. All right, coming up, we're gonna have more from the Sarah Week Energy Conference and a conversation with CEO of ge Vernova.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via b I go on the terminal on Paul Sweeney.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via b I go on the terminal on Paul Sweeney.

And am Alex Steele and this is Bloomberg.

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You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Apple Corplay and Android Auto with the Bloomberg Business App, listen on demand wherever you get your podcasts, or watch us live on YouTube.

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We move next to the drug and pharmaceutical space. This week, shares of the Danish drugmaker Noko Nordisk dropped the since December twentieth.

We move next to the drug and pharmaceutical space. This week, shares of the Danish drugmaker Noko Nordisk dropped the since December twentieth.

That's after Novo said that people treated with the obesity drug Kagri Semma showed underwhelming weight loss, and a clinical trial of people with diabetes For.

That's after Novo said that people treated with the obesity drug Kagri Semma showed underwhelming weight loss, and a clinical trial of people with diabetes For.

More guests, Isabelle Lee and I were joined by Sam Fazzelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals analysts, who first asked Sam where Novo is now in a fast growing market for weight loss treatments.

More guests, Isabelle Lee and I were joined by Sam Fazzelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals analysts, who first asked Sam where Novo is now in a fast growing market for weight loss treatments.

Fifteen point seven percent is what they lost in the sixty eight big trial, and then when you correct that for the placebo, so obviously you tell people to also diet, et cetera, that falls down to twelve point six percent is not a big number. Therefore, people are upset and this was supposed to be the drug that is going to beat or hope they hoped would beat potentially or be their main way of competing with zeppetite from or Munjaro from Eli Lilly. The reality is it's actually in this trial it seems about in line with what cha Zeppetite gave us. So it's not that it's that bad. It's just these guys set themselves up a while ago saying twenty five percent in OBEs, twenty percent or so in obi's diabetics. Diabetics for some reason respond less. And of course both of those have been lower. We had that one the first one in the obesity population before Christmas, if you remember, and this one. So this market is so awful, with the sea of red everywhere that it's really difficult to parse out specific company thing or people are just miffed taking a.

Fifteen point seven percent is what they lost in the sixty eight big trial, and then when you correct that for the placebo, so obviously you tell people to also diet, et cetera, that falls down to twelve point six percent is not a big number. Therefore, people are upset and this was supposed to be the drug that is going to beat or hope they hoped would beat potentially or be their main way of competing with zeppetite from or Munjaro from Eli Lilly. The reality is it's actually in this trial it seems about in line with what cha Zeppetite gave us. So it's not that it's that bad. It's just these guys set themselves up a while ago saying twenty five percent in OBEs, twenty percent or so in obi's diabetics. Diabetics for some reason respond less. And of course both of those have been lower. We had that one the first one in the obesity population before Christmas, if you remember, and this one. So this market is so awful, with the sea of red everywhere that it's really difficult to parse out specific company thing or people are just miffed taking a.

Step back when it comes to the reintroduction of legislation to modify the Inflation Reduction Act. How does large pharma sit amidst all of.

Step back when it comes to the reintroduction of legislation to modify the Inflation Reduction Act. How does large pharma sit amidst all of.

Those Oh, just a small question then, right, No, I mean, look, at the end of the day, a lot of these folks are being told you're going to have your within that context, We've done a lot of analysis on this. Every year fifteen drugs are chosen to be negotiated for price by the Medicare plans. So and it's possible that novos we go V is going to be part of one of those four twenty twenty six or twenty twenty seven, I can't remember exactly that's what's happening with these guys, but there a lot of farmer companies have said, look, we can manage this. It's within our realms to be able to cope. And so I think the market is generally accepted that IRA isn't that bad for the farmer industry.

Those Oh, just a small question then, right, No, I mean, look, at the end of the day, a lot of these folks are being told you're going to have your within that context, We've done a lot of analysis on this. Every year fifteen drugs are chosen to be negotiated for price by the Medicare plans. So and it's possible that novos we go V is going to be part of one of those four twenty twenty six or twenty twenty seven, I can't remember exactly that's what's happening with these guys, but there a lot of farmer companies have said, look, we can manage this. It's within our realms to be able to cope. And so I think the market is generally accepted that IRA isn't that bad for the farmer industry.

SAM talk to us about kind of these generic weight loss drugs, and I guess they're I don't know if they're generic or if they're a different term.

SAM talk to us about kind of these generic weight loss drugs, and I guess they're I don't know if they're generic or if they're a different term.

But compounded compound phrase.

But compounded compound phrase.

Look for how effective are they should and how safe are they?

Look for how effective are they should and how safe are they?

Well?

Well?

I mean, look, you the companies buy active from somebody and they make it in the pharmacy and they sell it to you. Right, so it's usually a needle and as yringe, right, a needle and syringe in a wile. And how safe are they?

I mean, look, you the companies buy active from somebody and they make it in the pharmacy and they sell it to you. Right, so it's usually a needle and as yringe, right, a needle and syringe in a wile. And how safe are they?

Who knows?

Who knows?

No one's done trials on them. I think the FDA has to believe, even they do go through rigorous and assessment that the active that they're buying isn't going to kill people. And I don't think that there's been that much issue. But then at the end of the day, it's not the branded drug, it's not the drug that the manufacturers live and die by if there's an issue. So the reality is they should be out of the way anyway because they can only sell what are essentially on patent drugs which they're not supposed to write if there's a shortage, and the FDA said there's no shortage for either of the drugs from Novo or Lilina, so those folks have to take them off the market.

No one's done trials on them. I think the FDA has to believe, even they do go through rigorous and assessment that the active that they're buying isn't going to kill people. And I don't think that there's been that much issue. But then at the end of the day, it's not the branded drug, it's not the drug that the manufacturers live and die by if there's an issue. So the reality is they should be out of the way anyway because they can only sell what are essentially on patent drugs which they're not supposed to write if there's a shortage, and the FDA said there's no shortage for either of the drugs from Novo or Lilina, so those folks have to take them off the market.

Going back to this tagrisema, if Nova plants take regulatory approval in the first quarter of next year, what happens if it gets approved and if it doesn't.

Going back to this tagrisema, if Nova plants take regulatory approval in the first quarter of next year, what happens if it gets approved and if it doesn't.

Yeah, so look, these are all drugs that are in the evolution of the pipeline of the company, so we go. V from Novo is often viewed as less impactful in terms of efficacy than Lili's Monjaro. So here comes Novo with something that matches it with a slightly different mechanism that potentially can help you maintain a little bit more muscle rather than what you get with some of these earlier versions like Pickov. So that's the idea, but they still have to prove that and then of course there'll be another generation that we'll call triple therapy from Lily. So basically what they're trying to do is to keep raising the bar and raising the bar on efficacy and raising the bar on giving you the good weight loss e, less muscle, morephat our.

Yeah, so look, these are all drugs that are in the evolution of the pipeline of the company, so we go. V from Novo is often viewed as less impactful in terms of efficacy than Lili's Monjaro. So here comes Novo with something that matches it with a slightly different mechanism that potentially can help you maintain a little bit more muscle rather than what you get with some of these earlier versions like Pickov. So that's the idea, but they still have to prove that and then of course there'll be another generation that we'll call triple therapy from Lily. So basically what they're trying to do is to keep raising the bar and raising the bar on efficacy and raising the bar on giving you the good weight loss e, less muscle, morephat our.

Thanks to Sam Fazelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals Analysts.

Thanks to Sam Fazelli, Bloomberg Intelligence, Director of Research for Global Industries and senior pharmaceuticals Analysts.

This week, I was at SMP Globals Sarah Week Energy Conference in Houston, Texas.

This week, I was at SMP Globals Sarah Week Energy Conference in Houston, Texas.

It's where all the energy CEOs and officials meet to discuss policy and make deals.

It's where all the energy CEOs and officials meet to discuss policy and make deals.

HI the pleasure of speaking with Scott Straisik, CEO of ge Vernova.

HI the pleasure of speaking with Scott Straisik, CEO of ge Vernova.

Gevnova is a gas and wind turbine manufacturer and it was spun off a year ago by General Electric.

Gevnova is a gas and wind turbine manufacturer and it was spun off a year ago by General Electric.

I spoke to its CEO about the company's grid investments and artificial intelligence and energy, and I begin by asking Scott what he thinks the biggest change is leading the company in the last.

I spoke to its CEO about the company's grid investments and artificial intelligence and energy, and I begin by asking Scott what he thinks the biggest change is leading the company in the last.

Year, and I'm proud of the first year, but most importantly it's really just the beginning for us because a lot of these trends, whether it be AI, whether it be the electrification of these industries, it's really just starting. So our end markets continue to strengthen. I think there's a more reality based focus on both the need for gas and nuclears, so the demand cycle for both of those continues to get even stronger today than where we were twelve months ago. And it really then comes back to how do we deliver safely and in a high quality way to serve this incredible market that we're walking into.

Year, and I'm proud of the first year, but most importantly it's really just the beginning for us because a lot of these trends, whether it be AI, whether it be the electrification of these industries, it's really just starting. So our end markets continue to strengthen. I think there's a more reality based focus on both the need for gas and nuclears, so the demand cycle for both of those continues to get even stronger today than where we were twelve months ago. And it really then comes back to how do we deliver safely and in a high quality way to serve this incredible market that we're walking into.

Your backlog is huge, right, it's like seventy three billion dollars, right? Can you give me perspective, like how much of that is AI demand driven?

Your backlog is huge, right, it's like seventy three billion dollars, right? Can you give me perspective, like how much of that is AI demand driven?

How much of that is like wind stuff? How much of that.

How much of that is like wind stuff? How much of that.

Is transformers which is the stuff you got to plug.

Is transformers which is the stuff you got to plug.

Into the grid.

Into the grid.

You bet.

You bet.

It's still a very small proportion of our backlog is directly attached to AI. I mean, when you really think about even data centers in total, there's only about sixty gig goofs of data centers globally today, and only fifteen percent of that it's really explicitly related to AI. Most of it's still cloud and storage. So that's why there's so much growth to come, because we're really just starting. But I'm sure us sitting down a few years from now, it's going to be a larger proportion of our backlog.

It's still a very small proportion of our backlog is directly attached to AI. I mean, when you really think about even data centers in total, there's only about sixty gig goofs of data centers globally today, and only fifteen percent of that it's really explicitly related to AI. Most of it's still cloud and storage. So that's why there's so much growth to come, because we're really just starting. But I'm sure us sitting down a few years from now, it's going to be a larger proportion of our backlog.

How much do you think it would be best guess.

How much do you think it would be best guess.

Oh, it's going to be a lot more. There's no question about dear. No, I don't think we get to that proportion. But it's going to become more AI centric, and it's becoming even more US based because the amount of growth that we're going to see in the US the rest of the decade relative to the rest of the world, it's going to be more tomorrow than it's certainly been the last five to ten years.

Oh, it's going to be a lot more. There's no question about dear. No, I don't think we get to that proportion. But it's going to become more AI centric, and it's becoming even more US based because the amount of growth that we're going to see in the US the rest of the decade relative to the rest of the world, it's going to be more tomorrow than it's certainly been the last five to ten years.

In the meantime, you cannot get a CEO on the stage at Sarah Week that isn't talking about GeV Ronova because everyone's buying your gas turbines at the end of the day. How much of this is firm contracting. How much of that is just like, yeah, we like it, we're gonna buy it. Can you give me some insight into that.

In the meantime, you cannot get a CEO on the stage at Sarah Week that isn't talking about GeV Ronova because everyone's buying your gas turbines at the end of the day. How much of this is firm contracting. How much of that is just like, yeah, we like it, we're gonna buy it. Can you give me some insight into that.

Well, we're very firm in contract, certainly with our gas turbine, our transformer, our switch gear backlaw really through twenty seven into twenty eight right now, I would expect by the end of the summer will be largely sold out.

Well, we're very firm in contract, certainly with our gas turbine, our transformer, our switch gear backlaw really through twenty seven into twenty eight right now, I would expect by the end of the summer will be largely sold out.

Through the end of twenty eight with those equipment.

Through the end of twenty eight with those equipment.

But we're also looking to kind of find ways to get better every day and a culture of continuous improvement, and if we can increase capacity smartly as we figure out this ramp, we'll do that. But for context, last fall we announced a really almost thirty five percent increase in supply from twenty five levels to twenty seven. So thirty five percent increases a lot. It doesn't mean we stop there, but we've got to get there first and then re evaluate what the art of the possible really is.

But we're also looking to kind of find ways to get better every day and a culture of continuous improvement, and if we can increase capacity smartly as we figure out this ramp, we'll do that. But for context, last fall we announced a really almost thirty five percent increase in supply from twenty five levels to twenty seven. So thirty five percent increases a lot. It doesn't mean we stop there, but we've got to get there first and then re evaluate what the art of the possible really is.

Okay, So to that point, what are the issues with execution?

Okay, So to that point, what are the issues with execution?

Then?

Then?

Like, it's a lofty goal, right, you're investing six hundred million dollars to plants in the US.

Like, it's a lofty goal, right, you're investing six hundred million dollars to plants in the US.

It's a lot.

It's a lot.

How fast can that happen? And what are the roadblocks for you?

How fast can that happen? And what are the roadblocks for you?

It's got to happen in the next two years, you know, really, this company is going to look very different between now and the summer at twenty six.

It's got to happen in the next two years, you know, really, this company is going to look very different between now and the summer at twenty six.

What's the biggest hurdle for you to get that done?

What's the biggest hurdle for you to get that done?

Workers?

Workers?

Right, We're going to add over We're going to add over fifteen hundred employees. That's a combination of engineering and craft labor. That's all in the US. Take gas as an example. We've got to add over five hundred heavy duty pieces of machinery into our global factories to drive this growth in this ramp. So that's a lot in existing factory footprints. We're highly capable of doing it, but it's a lot between now and let's say the fourth of July of next year. So I like our chances, but there's a lot of work to do.

Right, We're going to add over We're going to add over fifteen hundred employees. That's a combination of engineering and craft labor. That's all in the US. Take gas as an example. We've got to add over five hundred heavy duty pieces of machinery into our global factories to drive this growth in this ramp. So that's a lot in existing factory footprints. We're highly capable of doing it, but it's a lot between now and let's say the fourth of July of next year. So I like our chances, but there's a lot of work to do.

Talk to me about the wind part, okay, because that's sort of like the cousin no one wants to talk about right now, or the oncle. If someone came to you and said, hey, Scott, I'd like to buy your wind business, would you be like, yes, take it off my hands.

Talk to me about the wind part, okay, because that's sort of like the cousin no one wants to talk about right now, or the oncle. If someone came to you and said, hey, Scott, I'd like to buy your wind business, would you be like, yes, take it off my hands.

No.

No.

I don't think it's that simple.

I don't think it's that simple.

I think at the end of the day, we've got a big onshore wind business today. Even in the US, we have over thirty five thousand wind turbans that are spinning creating electricity today. We see real opportunities to repower that existing install base using the infrastructure that's already been built, but putting longer blades onto the wind turbines that helps the world.

I think at the end of the day, we've got a big onshore wind business today. Even in the US, we have over thirty five thousand wind turbans that are spinning creating electricity today. We see real opportunities to repower that existing install base using the infrastructure that's already been built, but putting longer blades onto the wind turbines that helps the world.

We think that there's a role for wind, and with that role for wind.

We think that there's a role for wind, and with that role for wind.

We're focused today on just operationally running this business better every day, waiting for the growth and inflection that comes. So we really are a believer in and all the above technology suite. But we'll also look at our portfolio every day with a steely eye and on what creates value for our shareholders. But there's no binary yes or no answer to that question. But we're focused on running these businesses better and ultimately creating value.

We're focused today on just operationally running this business better every day, waiting for the growth and inflection that comes. So we really are a believer in and all the above technology suite. But we'll also look at our portfolio every day with a steely eye and on what creates value for our shareholders. But there's no binary yes or no answer to that question. But we're focused on running these businesses better and ultimately creating value.

All right, So sticking to the wind.

All right, So sticking to the wind.

The other part of your business, which I think is so cool, are the transformers.

The other part of your business, which I think is so cool, are the transformers.

So yes, you can have.

So yes, you can have.

All the wind farms you want, all the solarer that you want, but if you have to plug it into the grid, so I think it is like a big socket.

All the wind farms you want, all the solarer that you want, but if you have to plug it into the grid, so I think it is like a big socket.

I'm sure it's much more complicated than that. But talk to you about the growth.

I'm sure it's much more complicated than that. But talk to you about the growth.

There, because everyone talks you about AI and data demand, but like, that's where the potential growth is.

There, because everyone talks you about AI and data demand, but like, that's where the potential growth is.

Walk me through the percentages.

Walk me through the percentages.

And that's also for context where a lot of our first interactions really came to be more intimate with the hyperscalers. I mean, we did over half a billion dollars of direct electrical equipment with the hyperscalers and orders last year withsformers.

And that's also for context where a lot of our first interactions really came to be more intimate with the hyperscalers. I mean, we did over half a billion dollars of direct electrical equipment with the hyperscalers and orders last year withsformers.

With switch gears attached to their data centers.

With switch gears attached to their data centers.

That's a business that we see substantially growing from here. Two years ago, our backlog coming into twenty twenty three was about six billion dollars equipment backlog. It's north of twenty billion dollars today. So it's a growth rate.

That's a business that we see substantially growing from here. Two years ago, our backlog coming into twenty twenty three was about six billion dollars equipment backlog. It's north of twenty billion dollars today. So it's a growth rate.

It'll stay growing.

It'll stay growing.

Our backlogs certainly will grow at that same level for another year here to expanding margins. So this is I think we can have debates between nuclear gas when what are the power generation sources that are going to power the world?

Our backlogs certainly will grow at that same level for another year here to expanding margins. So this is I think we can have debates between nuclear gas when what are the power generation sources that are going to power the world?

Regardless, we need to invest in the grid.

Regardless, we need to invest in the grid.

Yes, and that then leads us to transformers. Before I let you go, North America's what like twenty twenty five percent of your business right now? Uncertainty is quite high. We saw it with the nfib A survey of small businesses. Is now a good time to invest in the US and what part of that business do you think it could be in the next five years.

Yes, and that then leads us to transformers. Before I let you go, North America's what like twenty twenty five percent of your business right now? Uncertainty is quite high. We saw it with the nfib A survey of small businesses. Is now a good time to invest in the US and what part of that business do you think it could be in the next five years.

I think it's a great time to invest in the US.

I think it's a great time to invest in the US.

Yes, We've gone through multiple decades with very little load growth, and it's really impossible to underwrite a case that we don't need substantially more electrical equipment and supply here over the next decade. And yeah, that's data centers, but it's not just that we're reindustrializing parts of the US to an extent that is going to require more electrical load. You know, EVS, home heating, there's a lot of other factors and beyond that, we just need to modernize what we have for resilience and energy security.

Yes, We've gone through multiple decades with very little load growth, and it's really impossible to underwrite a case that we don't need substantially more electrical equipment and supply here over the next decade. And yeah, that's data centers, but it's not just that we're reindustrializing parts of the US to an extent that is going to require more electrical load. You know, EVS, home heating, there's a lot of other factors and beyond that, we just need to modernize what we have for resilience and energy security.

Aw big of a percentage could the US or North America be in your portfolio in five years?

Aw big of a percentage could the US or North America be in your portfolio in five years?

It's going to grow as a proportion, for sure, but it's not the only market. We're continuing to see real growth in Asia and in Europe. But we're very bullish on the US and we're going to keep investing in the US. You cited the six hundred million dollars and fifteen hundred jobs attached to that, but that's not the end, that's just the beginning as we continue to serve this market.

It's going to grow as a proportion, for sure, but it's not the only market. We're continuing to see real growth in Asia and in Europe. But we're very bullish on the US and we're going to keep investing in the US. You cited the six hundred million dollars and fifteen hundred jobs attached to that, but that's not the end, that's just the beginning as we continue to serve this market.

All right.

All right.

Thanks to Scott Straisik, CEO of g e Vernova. Coming up, we'll have more from the Sarah Week Energy Conference and a conversation with Joe Dominguez, the CEO of Constellation Energy.

Thanks to Scott Straisik, CEO of g e Vernova. Coming up, we'll have more from the Sarah Week Energy Conference and a conversation with Joe Dominguez, the CEO of Constellation Energy.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies in one hundred and thirty industries. You can access Bloomberg Intelligence via Big in the terminal.

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I'm Paul Sweeney and I'm Alex Steel, and this is Bloomberg.

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You're listening to the Bloomberg Intelligence Podcast. Catch the program live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty Move.

You're listening to the Bloomberg Intelligence Podcast. Catch the program live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty Move.

Next to the retail space. This week, the department store Coles said that comparable sales this year will drop as much as six percent.

Next to the retail space. This week, the department store Coles said that comparable sales this year will drop as much as six percent.

This comes as the company has been making sweeping changes in an attempt to get back on track after three years of declining sales.

This comes as the company has been making sweeping changes in an attempt to get back on track after three years of declining sales.

For more guestsos Isabel Lee and I were joined by Mary Ross Gilbert, Bloomberg Intelligence, senior equity analysts covering retail. We first asked Mary about Cole's guidance and why came in weaker than expected.

For more guestsos Isabel Lee and I were joined by Mary Ross Gilbert, Bloomberg Intelligence, senior equity analysts covering retail. We first asked Mary about Cole's guidance and why came in weaker than expected.

With regard to.

With regard to.

Cole's guidance, First of all, I think they're really hoping to beat the numbers, but they're expecting their comp sales to be down five to seven percent in this coming year. And if you look at the performance in the fourth quarter, their revenues came in sort of in line, fairly close. Their comp sales were down about six point seven percent.

Cole's guidance, First of all, I think they're really hoping to beat the numbers, but they're expecting their comp sales to be down five to seven percent in this coming year. And if you look at the performance in the fourth quarter, their revenues came in sort of in line, fairly close. Their comp sales were down about six point seven percent.

But when you look at.

But when you look at.

What's going on this so for a business was up thirteen percent on a comp basis, that means that the rest of their categories and they're mostly apparel related, were down double digits. So it's it's very concerning because that's so for a business since they brought it in is now one point eight billion in annual revenues. Meanwhile, they lost about three billion in revenues and now we're looking for further declines this year. So that's what's really concerning. Now we have a new CEO. This is the third CEO in four years, Ashley Buchanan, and you know, he gave a quick peek at what he sees are the opportunities they need to really get their merchandise assortments right. They did bring back in private label jewelry and petites, because those were some of the things that they took out when they brought in some new brands and they found that they were alienating their core customer. Another issue was on the promotional side. They always have these great little coupons, but what they did was they had raised the number of brands that were excluded from the promotions to an all time high in twenty twenty four. Their objective is to reduce that to make it more compelling. So they have a number of strategies that they have to employ here and it's going to take time. So that's why the outlook for this year looks dismal, along with the fact that the consumer climate, particularly for their low income cohort are challenged by still high inflation and just an uncertain environment with the ramifications of higher tariffs.

What's going on this so for a business was up thirteen percent on a comp basis, that means that the rest of their categories and they're mostly apparel related, were down double digits. So it's it's very concerning because that's so for a business since they brought it in is now one point eight billion in annual revenues. Meanwhile, they lost about three billion in revenues and now we're looking for further declines this year. So that's what's really concerning. Now we have a new CEO. This is the third CEO in four years, Ashley Buchanan, and you know, he gave a quick peek at what he sees are the opportunities they need to really get their merchandise assortments right. They did bring back in private label jewelry and petites, because those were some of the things that they took out when they brought in some new brands and they found that they were alienating their core customer. Another issue was on the promotional side. They always have these great little coupons, but what they did was they had raised the number of brands that were excluded from the promotions to an all time high in twenty twenty four. Their objective is to reduce that to make it more compelling. So they have a number of strategies that they have to employ here and it's going to take time. So that's why the outlook for this year looks dismal, along with the fact that the consumer climate, particularly for their low income cohort are challenged by still high inflation and just an uncertain environment with the ramifications of higher tariffs.

Among the many things that jumped out to me is why are they're bringing back find Jewelry. How do you square that with a struggling consumer base. They're not the latest retailer to cast out on the strength of the US consumer.

Among the many things that jumped out to me is why are they're bringing back find Jewelry. How do you square that with a struggling consumer base. They're not the latest retailer to cast out on the strength of the US consumer.

Yes, Isabelle, So it's a good point, but it's important that you have that for a gifting option. And these items are not It includes not just fine jewelry but also costume jewelry and that category. Because they did bring it back in, their sales were flat. So that shows that that strategy of bringing it back because it's very important for gifting. And once again, if you look at the promotions that they offer for a jewelry, they have buy one item, get the second item like half off or something like that. So they do have some compelling value that they're bringing the consumer there. It's important for gifting, so for example for Valentine's Day and then also for the holidays.

Yes, Isabelle, So it's a good point, but it's important that you have that for a gifting option. And these items are not It includes not just fine jewelry but also costume jewelry and that category. Because they did bring it back in, their sales were flat. So that shows that that strategy of bringing it back because it's very important for gifting. And once again, if you look at the promotions that they offer for a jewelry, they have buy one item, get the second item like half off or something like that. So they do have some compelling value that they're bringing the consumer there. It's important for gifting, so for example for Valentine's Day and then also for the holidays.

What are they saying, Mary about tariffs and their ability to pass along price increases or conversely take it in their margin.

What are they saying, Mary about tariffs and their ability to pass along price increases or conversely take it in their margin.

Yeah, so tariffs, it wasn't a huge topic on their call, and if you look at the past, they weren't really impacted. They were able to pass it on. And I think what they do is they work with their vendors and they source So if you look at their private slash exclusive labels, that business they're able to you know, they haven't disclosed exactly how much they source from China, but they're able to basically work with their vendors on you know, creating that price the product at a price point that fits into their value equation. And so the last time around, if you looked at twenty eighteen twenty nineteen, they really didn't call out a specific impact related to tariffs. They said that they were they were okay, they were able to offset it with either cost savings or just the way that they were able to price it in. You know, in terms of building the margin.

Yeah, so tariffs, it wasn't a huge topic on their call, and if you look at the past, they weren't really impacted. They were able to pass it on. And I think what they do is they work with their vendors and they source So if you look at their private slash exclusive labels, that business they're able to you know, they haven't disclosed exactly how much they source from China, but they're able to basically work with their vendors on you know, creating that price the product at a price point that fits into their value equation. And so the last time around, if you looked at twenty eighteen twenty nineteen, they really didn't call out a specific impact related to tariffs. They said that they were they were okay, they were able to offset it with either cost savings or just the way that they were able to price it in. You know, in terms of building the margin.

How about store visits calls? Isn't the only ones struggling with that. I myself have just shopped basically online. How are they attempting to attract customers back in store?

How about store visits calls? Isn't the only ones struggling with that. I myself have just shopped basically online. How are they attempting to attract customers back in store?

Yeah?

Yeah?

So Isabelle. Actually their stores performed better. Now remember they were you know, the sales were down, but they outperformed online. So you know, earlier in the year we had seen where online did better than in store, but actually, you know, the stores are are doing better than online. So they're actually and we're seeing that from a number of retailers where we do see really good performance in store. And if you look at off price, I mean that's really based and built on in store visits.

So Isabelle. Actually their stores performed better. Now remember they were you know, the sales were down, but they outperformed online. So you know, earlier in the year we had seen where online did better than in store, but actually, you know, the stores are are doing better than online. So they're actually and we're seeing that from a number of retailers where we do see really good performance in store. And if you look at off price, I mean that's really based and built on in store visits.

Our thanks to Mary Ross Gilbert Bloomberg Intelligence senior equity analysts covering retail.

Our thanks to Mary Ross Gilbert Bloomberg Intelligence senior equity analysts covering retail.

This week, I was.

This week, I was.

At SMP Globals Sarah Week's Energy Conference in Houston, Texas. It's where all the energy CEOs and officials meet to discuss policy, make deals, and talk to shareholders. I had the pleasure of speaking to Joe Domingaz see of Constellation Energy.

At SMP Globals Sarah Week's Energy Conference in Houston, Texas. It's where all the energy CEOs and officials meet to discuss policy, make deals, and talk to shareholders. I had the pleasure of speaking to Joe Domingaz see of Constellation Energy.

Constellation operates to the largest fleet of nuclear reactors in the US, and the company recently signed its largest ever power purchase agreement with Microsoft.

Constellation operates to the largest fleet of nuclear reactors in the US, and the company recently signed its largest ever power purchase agreement with Microsoft.

It's a deal that will restore Constellation's three Mile Island nuclear plant, and it shows that carbon free electricity is more valuable when it's available around the clock. I began the conversation with Joe Dominguez by talking about the company and asking about recession and slowing growth and whether he's noticing any of that At Constellation.

It's a deal that will restore Constellation's three Mile Island nuclear plant, and it shows that carbon free electricity is more valuable when it's available around the clock. I began the conversation with Joe Dominguez by talking about the company and asking about recession and slowing growth and whether he's noticing any of that At Constellation.

We don't see an end in sight right now. We're starting to see it get rationalized, and by that I mean we're not seeing the same request for data centers popping up in five or six utilities. So I think the hyperscalers are beginning to figure out where they want to go. And it's not the frenzy of activity, but in terms of the deal pace, it continues the same way we saw it last year.

We don't see an end in sight right now. We're starting to see it get rationalized, and by that I mean we're not seeing the same request for data centers popping up in five or six utilities. So I think the hyperscalers are beginning to figure out where they want to go. And it's not the frenzy of activity, but in terms of the deal pace, it continues the same way we saw it last year.

And how are the deals? Like, how is it to get them done? Is it hard?

And how are the deals? Like, how is it to get them done? Is it hard?

Is it coming up with the structure the money?

Is it coming up with the structure the money?

Like?

Like?

What is it?

What is it?

It's not hard, but they're complicated because they're multi billion dollar deals, right, So we're talking about twenty year deals for power that sometimes could cost five or ten billion dollars. So like any commercial deal of that scale, it's going to take a long time to negotiate, and each time you need to do that with a new party, you have to go through all the terms and conditions again. But I think we're going to get some some deals done this year.

It's not hard, but they're complicated because they're multi billion dollar deals, right, So we're talking about twenty year deals for power that sometimes could cost five or ten billion dollars. So like any commercial deal of that scale, it's going to take a long time to negotiate, and each time you need to do that with a new party, you have to go through all the terms and conditions again. But I think we're going to get some some deals done this year.

Can you give me some hints, like in maybe areas, what kind of deals?

Can you give me some hints, like in maybe areas, what kind of deals?

Like what kind of power?

Like what kind of power?

Well, I think nuclear continues to be very attractive for the hyperscalers because it operates twenty four to seven, it's cleaned, so it meets their environmental goals, and it matches up really well from a reliability standpoint.

Well, I think nuclear continues to be very attractive for the hyperscalers because it operates twenty four to seven, it's cleaned, so it meets their environmental goals, and it matches up really well from a reliability standpoint.

So let's go to money then for a second.

So let's go to money then for a second.

So coming up with the deals is very interesting, particularly the one you do with Microsoft to restart three Mile Island.

So coming up with the deals is very interesting, particularly the one you do with Microsoft to restart three Mile Island.

Are your costs going up right now.

Are your costs going up right now.

A little bit?

A little bit?

But it's really labor inflation that we mostly see now. Remember we have existing nuclear plants that are already built, so a lot of the cost of the raw materials that you're saying, you know, potentially impacted by tariff's in the long run. But in escalation through inflation, we're not seeing much of that tiny bid on uranium pricing. But most of what we're seeing is labor contracting.

But it's really labor inflation that we mostly see now. Remember we have existing nuclear plants that are already built, so a lot of the cost of the raw materials that you're saying, you know, potentially impacted by tariff's in the long run. But in escalation through inflation, we're not seeing much of that tiny bid on uranium pricing. But most of what we're seeing is labor contracting.

If you wind up seeing an increase right even in labor, how does that change in your contracts, Like you already said it, you have to go back to them and say, hey, listen, we got to renegotiate my costs.

If you wind up seeing an increase right even in labor, how does that change in your contracts, Like you already said it, you have to go back to them and say, hey, listen, we got to renegotiate my costs.

Are going on now.

Are going on now.

There's no reopeners up or down for those sorts of inflation, So.

There's no reopeners up or down for those sorts of inflation, So.

You're really shaking on that risk.

You're really shaking on that risk.

Sure, yeah, we're taking it on for over twenty year period. And that's the importance of being able to do this with nuclear right we know exactly what our cost structure is going to be within a range for ten and twenty years.

Sure, yeah, we're taking it on for over twenty year period. And that's the importance of being able to do this with nuclear right we know exactly what our cost structure is going to be within a range for ten and twenty years.

Harder to do with our.

Harder to do with our.

Natural gas assets, where we don't know what the price of natural gas is going to be ten years out, or whether we're going to have a carbon tax, or what the changes in environmental regulations are.

Natural gas assets, where we don't know what the price of natural gas is going to be ten years out, or whether we're going to have a carbon tax, or what the changes in environmental regulations are.

Going to be So how do you manage that risk?

Going to be So how do you manage that risk?

Well, I think what's really difficult to do that In the case of natural gas, I think there what you're doing is something that looks more like an index product that is indexed either inflation or natural gas prices.

Well, I think what's really difficult to do that In the case of natural gas, I think there what you're doing is something that looks more like an index product that is indexed either inflation or natural gas prices.

When you talk about the different parts of your business, how much of the capex that you're spending is going to new stuff, beefing up old stuff, or just replacing and making sure everything stays on track.

When you talk about the different parts of your business, how much of the capex that you're spending is going to new stuff, beefing up old stuff, or just replacing and making sure everything stays on track.

Yeah, So for us alex we face a critical decision as to whether to relicnse the nuclear plants for another twenty years, and we're facing that across the fleet. So when you say new, if we don't do this, it's going to be retired, very much like Three Mile Island was retired. So the distinction between keeping existing open and something that's truly new is immaterial.

Yeah, So for us alex we face a critical decision as to whether to relicnse the nuclear plants for another twenty years, and we're facing that across the fleet. So when you say new, if we don't do this, it's going to be retired, very much like Three Mile Island was retired. So the distinction between keeping existing open and something that's truly new is immaterial.

Right.

Right.

If it's gone, it's gone. It's the same as if it were never built. So we are investing all of our moneies to secure that fleet for the future, and we're also doing uprights and restarts and other things like that. In terms of a percentage to your question, I would say ninety percent of our spend is in the existing assets and getting them ready to run for decades.