U.S. in Middle of Cloud War; US Risks Jobs, Tech Going Overseas: Kirk Offel

As data centers rapidly expand across rural America, communities are weighing the economic benefits against the concerns over land use, infrastructure strain, and long-term impact. There's also a growing national security dimension raising questions about who controls critical digital infrastructure and where it's being built. Earlier, I spoke with Kirk Ophel, the CEO of Overwatch Mission Critical. Kirk Ophel, thanks so much for joining us. Thanks for having me today. I appreciate being here. It's great to have you with us, Kirk. You were up on Capitol Hill today testifying before Congress. Talk to us about what is at stake right now for small businesses, particularly in rural communities. I think, thanks for asking because it's such an exciting topic. There's a lot of fear about what data centers do and what they bring to those rural communities. And what we're simply trying to do is reshape the framework and how people view these facilities. Instead of looking at them as buildings, they should look at them as career field opportunities that not only create a lot of incredible jobs that will build back the middle class, but have massive ripple effects on the economy around it. And I think the concern really in the urban side is what are we doing to have an impact negatively on the way that they use their utilities, water specifically and energy. And those are all very valid concerns. And they're ones that, quite frankly, we're paying a lot of attention to today. But we've evolved much like what we did with the first automobile, which wasn't very efficient, wasn't very safe. It put a lot of strain on local infrastructure. And we saw the same pattern when we electrified the grid. And we saw the same pattern when we created the U.S. railway system. So these are common concerns. Every time there's a concern regarding what is the impact on energy in the local environments and what is the impact on the environment. So we take these concerns very seriously. And what we try to do is we try to reshape the way that we view these data centers because we're partners to these utilities in these urban environments. Now we're no longer consumers of their energy. We will not only not use their energy going forward, but we will become utilities ourselves in the sense that we can close transition and co-generate power back to the grid, thus making that local grid provider in that market more reliable and more resilient. And we haven't done a very good job as an industry of explaining these things. We haven't explained to these communities why this matters and how it impacts them and how it benefits them in the long term. But surprisingly enough, you know, we're not really taking power away from them. What we're trying to do is make a more resilient grid for those neighbors and those communities that we build in. And when we find problems when we're building in those rural markets, we're not flying in companies from out of the state to come solve those problems. Those problems are solved with local plumbers and local electricians and other services that are called. They know how to service in that market because they serve that community. So the topic today in Congress was what is the impact on the supply chain? What is the impact to the rural development because of data centers? And what is the future look like for AI? Now, right now, in our public discourse, we're hearing a lot about AI and how much energy it takes away. The president today, as recently as today, talking about how there's agreements with some of these major companies to have sort of separate off grid facilities. How does a data center differ from sort of the AI discussion that we're hearing? Yeah, there's two different types of things. One is a data center that was there to support. If you're an airline industry, the primary line of business you use to generate revenue is an airplane, and you want some applications to accelerate that speed. They're not there to manage data centers, so they outsource their data centers to cloud providers. And those cloud providers were building these things in a way to support the adoption rate of emerging technology, such as social media. And then we got into a whole nother level of density when we started getting into AI factories. So AI factories are profit center data centers that are designed to create a very unique product that doesn't require water. So we're going into zero water designs, which is great for any community that we go into. If we could get to the point where we use just as much water to cool a closed loop system on a data center as you use water in your car, and you can't use water in a radiator system in your car because it doesn't absorb and reject heat fast enough. So we're using other fluids. We're bypassing water altogether. And from an energy perspective, we're not just putting power back on the grid. We're putting jobs and long-term careers that allow people to have a transparent, predictable, and reliable resources utility. But as a career provider, we want to shift the way that people look at these things as buildings and we want to see them shift to the way that they view it is the opportunity to build back the middle class with a high paying job that does not require a college degree. How important are data centers for national security reasons, but also to diversify access, to shift away from monopolies? Well, there's two very challenging questions. I'll start with national security first, because at the end of the day, everything that we're talking about today on Capitol Hill, as I said to the congressional committee, if we don't solve for this in America, not only will we shift all of those jobs overseas, but the technology goes with it. And that means that we could be placing our future in the hands of countries that maybe they don't share our environmental standards or they simply don't agree with us or share our point on peace throughout the region. So we have to compete from an energy basis against groups because we don't build nuclear reactors and we don't build coal power plants anymore, but China has commissioned more than 10 nuclear reactors every year for the last three and a half, four years. And they still built more than 100 coal power plants last year. We don't do any of those things in America. We're trying to solve this bridging solution with natural gas. And eventually we're gonna get to a safer, more scalable and more sustainable form of energy, which will be nuclear small modular reactors. And we have to protect and defend this lead, this advantage that we have on AI. And the only way to solve for it is with energy. So zooming out, you mentioned China. How much of this conversation connects to the broader tech race with China? Yeah, so make no mistake, we're in the middle of a cloud war right now. So there's say less than 10 companies on this earth that represent more than 75% of the internet traffic of the world. We only chase the CPU and the GPU. Every company in the data center vertical is only focused on what is coming out from a chip perspective or a GPU. And how do we send power to it and reject the heat that comes from it? And right now we're watching different races take place between what was called Famga. And now there's other companies that are adjacent to them that include Oracle and others that are just, they're adopting so much power. Now to put it into perspective, from an energy perspective, let's say from the time that we started this industry to today, we have 55 gigawatts of energy on the US grid. And we're looking down the barrel of being closer to 87 gigs by the end of 2027. Well, at the same time, this industry is on track to triple in the next five years. And we're staring down the barrel of 5 trillion in construction. For every $100 billion that we do in construction, it creates 500,000 new jobs, 800 million in tax revenue, $40 million of labor income, and that's $140 billion boost to the US GDP. So these cloud companies are really competing over who has the most efficient design on chips, servers, racks, and hardware. And we're figuring out how to deliver a higher density of energy to them that requires a less mechanical permutation. And right now, we have the lead in the world, and we're not ready to give that up. Your organization, Overwatch Mission Critical, it has a very unique mission. Not only are you trying to create jobs in rural communities, this is actually a big initiative of the administration. We just saw that with the rollout of some of the healthcare initiatives they had last week. But you're also trying to help veterans. That's correct. Right now, more than one out of four people that work in this industry have come from the Department of War. And that's because the military is the home for the most advanced weapons, machine, and technology ever built. And it, by the way, also serves as one of the strongest leadership incubators ever built. So we have people that could go to college for four years and go into debt, or they could find a skill set that when they come out, they have the next few years trying to figure out how to apply it. Or we have 17,000 veterans transitioning out of the military every month right now. And they're coming away with massively transferable skill sets that have a very high demand in the data center world throughout the globe. And not only that, but the pressure testing, the stress inoculation that comes from a veteran, it means that they already come from a mission-critical mindset. In our industry, we measure mission-critical on downtime. If you can lose a million dollars of revenue or measure your downtime in one second by death, you're considered mission-critical. I would argue that if you served in the military and took the oath, if you rose your hand and taken that oath, you've already been in the mission-critical industry, except it was only measured in your own mortality. So we are doing everything we can to solve the existential threat of this industry, which isn't energy, it's people. We need to create more jobs and new careers. We need data center apprentices to go out and build the power plants that serve these data centers. And those jobs are gonna be filled by transitioning veterans that have already been exposed to those advanced technologies. Kirk Ophel, greatly appreciate you joining us. Thank you. It's been an honor to be here. Thanks so much.