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The $19B "Nuclear AI" Energy Startup That Couldn't Sign a Single Client

1 week ago
"Nuclear AI startup" Fermi had hoped to build power plants generating 17 gigawatts of electricity, remembers Bloomberg, "three times the amount typically consumed by New York City." Hyperscalers could install their data centers on the site itself and tap directly into that power, which would come first from natural gas turbines and later from nuclear reactors. The pitch ticked so many boxes — artificial intelligence, nuclear energy, political connections — that some investors found it irresistible. Fermi went public in October worth more than $19 billion in market value, despite reporting no revenue or signed customers. Now, the startup's board has fired its top executive, Toby Neugebauer, after months of negotiations failed to secure a single client. Chief Financial Officer Miles Everson left as well... Fermi's stock, meanwhile, has tumbled 84% from its peak. The company's more than 5,000-acre site in the Texas panhandle — dubbed Project Matador, or the President Donald J. Trump Advanced Energy and Intelligence Campus — remains mostly unfinished. And some analysts see a cautionary tale of the market's AI enthusiasm running ahead of reality, with investors betting on companies whose grand projects may never get built... The idea of giving data centers their own, dedicated power supply not dependent on the grid may sound tempting, but former US Department of Energy official Jigar Shah said banks don't want to finance it. The grid, drawing power from many sources, is more reliable than a handful of expensive, on-site plants, he said. He considers Fermi a failure "of monumental proportions" and says similar, off-grid data center projects elsewhere deserve more skepticism than they've received... "We're allowing these types of projects to continue to be viewed as viable when they most certainly are not," said Shah, who ran the department's Loan Programs Office during the Biden administration.... "It was a piece of dirt with a dream," an investor who visited the site in February told the short sellers, Fuzzy Panda Research.

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EditorDavid

Using Drones for Cloud-Seeding Can Trigger Rain, Company Claims

1 week ago
Monday a company called Rainmaker announced their rain-triggering technology had produced 143 million gallons of freshwater for Utah and Oregon residents — making them "the first private company in history to validate the results of cloud seeding operations." The Deseret News reports: Founded in 2023, Rainmaker uses drones to disperse silver iodide into clouds, then they track precipitation with advanced radar. However, Rainmaker — and every other rain-enhancement company — has been up against the notoriously difficult challenge of validation. Since there is no control set to test, and because the weather is chaotic and variable, the Government Accountability Office declares the benefits of the technology to be "unproven." To overcome this evaluation challenge, Rainmaker flies drones in unique patterns when seeding. Then operators compare distinct radar and satellite features with where their drones operated. As of April, Rainmaker found 82 unambiguous seeding signatures, which show their seeding operations directly caused precipitation. In Utah and Oregon alone, the company said its cloud-seeding efforts have added enough water to match the annual usage of about 1,750 households. However, "this figure likely represents only a small fraction of Rainmaker's total generation this season," the company said in their press release... Their drone precision, combined with their radar systems, have produced satellite images proving a direct correlation between the seeding and precipitation. Some images show cloud holes or regions of depressed cloud tops after seeding. Rainmaker's announcement promises they'll "go forward and continue our mission to refill the Great Salt Lake, end drought in the American West and deliver water abundance wherever it is needed most around the world." (Rainmaker currently operates in Utah, Idaho, Oregon, California and Colorado.) The director of Utah's Natural Resources Department told the Deseret News that with cloud seeding, "cost per unit of water is so low; it really is the smartest thing we can be doing with our money," Ferry said.

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EditorDavid

What if Tech Company Layoffs Aren't All About AI?

1 week ago
"Running a Big Tech company during Silicon Valley's AI mania may not necessarily require fewer workers or cost less," writes the Washington Post: Amazon, Google and Meta together have roughly the same number of employees now as they did during an industry-wide hiring binge in 2022, company disclosures show. Growing costs for technical workers and related expenses have often outpaced sales recently. The tech giants' big AI bet hasn't yet paid for itself. That means AI might be killing jobs not through its labor-saving wizardry but by increasing spending so much that CEOs are pressured to find savings, giving them cover to consciously uncouple from their workforces. Marc Andreessen, a prominent start-up investor and a Meta board director, put it bluntly on a recent podcast. Big company layoffs are a fix for overstaffing and changing economic conditions, he said, but AI provides a convenient scapegoat. "Now they all have the silver bullet excuse: 'Ah, it's AI,'" he said... "Almost every company that does layoffs is blaming AI, whether or not it really is about AI," Sam Altman, CEO of ChatGPT owner OpenAI, said at a March conference when he listed explanations for AI's unpopularity in the United States. "Recent history suggests Big Tech companies might not be moving toward a future with fewer workers," the article concludes, "but recalibrating to spend the same, or more, on different people and projects." So in the end, "AI might soon reduce hiring," the article acknowledges, "But the reluctance or inability of the largest tech firms to cut too deeply so far could also show that the path to making a workforce AI-ready — whatever that means — isn't a predictable straight line charting declining headcount."

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EditorDavid