The Private Company Bringing Nuclear Enrichment Back to America (Scott Nolan, CEO of General Matter)

[00:00] If you think about all economic activity, any major strategic thing the S. is trying to do, or any country is trying to do, it ultimately gets back to energy. And we think that the way that energy is going to grow in the decades ahead is nuclear. It is the cleanest, safest form of baseload. It just hasn't been the cheapest. And so we want to make it the cheapest. The S. is the first to develop enrichment during World War II, obviously. And during the Cold War, we were doing a tremendous amount of enrichment.

We were something like 86% of worldwide enrichment capacity. Now we're really in last place. And so we're trying to restore that on S. soil [00:30] The Biden administration set a goal of tripling nuclear by 2050. They made international commitments for that. And then the Trump administration increased that to quadruple to 4x by 2050. And so this is a completely bipartisan thing that nuclear is going to grow 3 to 4x in the coming decades. So that now puts it at a $10 billion market in the S. alone. China and Russia are now really the providers of something like 70% of new reactors built internationally.

And that the S. has lost a lot of influence over this area. Despite having great reactor designs, we haven't been deploying them. [01:00] to fuel them. And so, Russian and Chinese contracts often come in very long fuel relationships that we've been unable to compete with. So it was really this wake up call for the industry of, "Hey, we need to move faster. We need to do things differently." [01:17] Scott Nolan spent a year looking for an American nuclear enrichment company to invest in at Founders Fund. He could not find a single one.

[01:26] Concerned by America's dependence on adversaries like Russia, [01:30] and certain that enrichment would only become more essential. [01:34] As demand for energy rises, [01:36] Scott decided to found a company of his own. [01:39] General Matter. Now, less than a year after its unveiling, [01:43] And General Matter has already closed on a facility in Paducah, Kentucky, [01:48] and was recently awarded a $900 million contract [01:52] from the Department of Energy. [01:54] These are just the first steps [01:56] of what Scott hopes will become the dominant American enrichment company [02:01] built to power the next century.

[02:04] In today's conversation, we discuss how nuclear enrichment works, [02:08] and why it matters. [02:10] The parallels between general matter and Scott's former employer SpaceX [02:15] Lessons learned from Peter Thiel [02:18] and the future of energy in the age of AI. [02:22] I'm Mario. [02:23] And this is The Generalist. [02:26] Well, Scott, uh, [02:27] I have been super looking forward to this for a long time. One, because I... [02:31] Really enjoyed getting to know you through the Founders Fund series and thought you'd had such an interesting [02:36] history. And then when you took the rafts off of general matter, it was clear that you were [02:42] going to build one of the most ambitious companies [02:46] of hopefully the next 50 years or beyond.

So I'm super excited to talk nuclear enrichment and all things related to energy today. [02:56] Yeah, thank you for having me on. [02:58] Excited to be here. And as you said, last time we talked, [03:01] I think we were deep in stealth building the company. Didn't mention anything about it, but [03:06] We've been at this for over two years at this point and just came out of self. [03:10] in April of last year. So excited to share a lot more. [03:13] Yeah, I'm excited to maybe set some of the big picture for people up front so that, you know, we can sort of understand why this is so important.

[03:22] To start with, I think it's worth sort of noting that [03:25] I think what you're doing is maybe a... [03:28] a first ever to build a venture-backed American nuclear enrichment facility. Is that [03:34] Is that fair to say? [03:36] That's right. So big picture on what we're doing. We are [03:39] the American Enrichment Company, enriching using American technology here in the, and specifically a focus on uranium for nuclear energy. [03:48] And so, like you said, we will be the first [03:51] private company to [03:53] develop technology to enrich uranium in the

S. and to bring a commercial facility online. [03:59] We can talk more about that facility later, but we do think this is one of the most important things we could possibly be working on. [04:05] If you think about all economic activity, any major strategic thing the S. is trying to do or any country is trying to do, [04:12] it ultimately gets back to energy. [04:14] Energy's upstream of all economic activity. [04:17] And we think that the way that energy is going to grow in the decades ahead is nuclear. [04:21] It's, it is the...

[04:23] cleanest, [04:24] safest form of baseload. [04:25] It just hasn't been the cheapest. [04:27] and so we want to make it the cheapest and so if nuclear is the way that things grow [04:32] that energy grows in the US and abroad. [04:35] fuel is a necessary input for that. So if fuel is upstream of energy and the one missing step in the fuel supply chain for nuclear, [04:42] is enrichment. [04:43] And so we are bringing enrichment capability back to the S. where the S. used to be the leader. [04:49] Now we're really in last place.

[04:51] And so we're trying to [04:52] you know, restore that on S. soil this decade. So that's the big picture of what we're working on. We always just say, you know, enrichment's upstream of fuel, fuel's upstream of [05:01] of energy at energies upstream of everything else. So we think this is one of the [05:05] the most fundamental capabilities we need to bring back to the US. [05:09] You know, in researching this episode, the history piece that you alluded to there was so interesting to me that America really. [05:16] was the, obviously the leader in sort of nuclear technology in general, but then also an enrichment for a really long period of time until it did sort of slip back into the last place.

And so you're sort of revitalizing something that was once a core competency that has really degraded massively over the past couple of decades. [05:35] That's right. [05:36] That's right. The S. is the first to develop enrichment. [05:39] during World War II, obviously, and then quickly use that for nuclear energy. [05:44] And during the Cold War, we were doing a tremendous amount of enrichment. We were something like 86% of worldwide [05:50] enrichment capacity [05:52] That was through a combination of different sites in the, you know, Paducah, Kentucky, [05:56] Oak Ridge, Tennessee.

[05:58] and Portsmouth, Ohio. [05:59] And the S. was... [06:01] By far the leader. [06:02] And then with the folder, [06:04] you know, Berlin Wall in the end of the Cold War, we started offshoring that and shutting down our own capability. [06:10] to let foreign allies and now foreign adversaries do that for us. [06:14] It seemed to make economic. [06:16] you know, sense, but I think strategically it was a mistake. [06:19] And now we're seeing that with the growth of nuclear, we really need it back. And so that's that's what we're trying to do.

We'll get more into the weeds on this, I'm sure, and and also into this next question. [06:30] For folks just to sort of give themselves a rough sense in their heads, I'm sure many people know about it, but what is the right way to think about like what enrichment fundamentally is doing and why that's so important? To make nuclear fuel, there's really five steps. [06:44] The first one is that you need to get uranium out of the ground. So that's mining and milling. [06:50] is what that's referred to as. [06:51] You then take that mind product and you convert it into a gas.

That's a conversion step, step two. [06:57] Step three is enrichment. [06:59] where you're really just separating that gas, [07:01] And then you turn it back into a solid and a deconversion step. [07:05] And then finally, you do fuel fabrication to get your fuel pellet type. And there's a range of different pellet types. The enrichment step is really [07:12] you know, it's really a refining step, it's a separation step, [07:15] There are no chemical reactions involved. There's even no nuclear reactions involved. [07:19] So it's really a refining process, a separation process.

[07:24] completely inert process working with [07:27] chemicals to separate different isotopes of uranium. And so the isotope that we want, that reactors need to [07:35] to conduct fission. [07:37] is you 235. [07:39] And so we want to separate out the others, primarily U-238. [07:43] which does not aid in [07:45] the fission reaction. And so, [07:47] You know, if you're talking about reactors that most people are familiar with, the classic light water reactor with the cooling towers. [07:54] Those run on uranium that's enriched to about 3% to 5%. [07:59] U-235 out of the ground, it's only a 0.7%.

So we need to get that level of U-235 up, which is where the refining comes in. [08:07] And then if we're talking about modern reactors, SMRs, small modular reactors, [08:12] Typically, they're going to want to use something called Halo. [08:15] which is enriched to just under 20%. [08:18] And we can talk about why that is, but [08:20] But what we're trying to fundamentally do is take something that comes out of the ground at 0.7%, U-235, and refine it or enrich it up to either 3% to 5% or 19.75%. For someone who wasn't familiar with your background...

[08:35] and maybe wasn't familiar with Founders Fund, it would sound extremely strange that a venture investor after 13 years of investing in great companies would say, "I'm the right person to bring nuclear enrichment back to America." But if people do know the story of your firm and your background, it really starts to make a lot of sense in many ways. And so I'd love to talk a little bit about that and [09:01] hear from you where the parallels are in your own story and maybe even just beginning to [09:07] at the beginning, which is [09:09] You know, as I recall you telling me in interviewing you for the Founders Fund series, you really were the sort of kid who was just constantly tinkering with things and building rockets and deeply interested in sort of.

[09:22] engineering to the extent that kids, you know, can show that proclivity. [09:26] Yeah, and that was always an interest of mine, and [09:29] It first showed up in Rockets, as you mentioned, and [09:33] you know, did rockets all throughout high school and college and designed them and built them. [09:37] Which led to me working at SpaceX right out of school. [09:40] End. [09:41] You know, if you think back to 2002, [09:43] working on a private space company, [09:45] was not something a lot of people were thinking about. It was...

[09:48] It was kind of a weird, unusual thing. [09:50] And I think I joined in 2003. [09:53] And I think Elon was thinking about the company in 2001, 2002, and a lot of people told him, don't do it. That's a really weird thing to be excited about. [10:00] In the midst of this. [10:01] you know, internet era, even com. [10:04] And so... [10:05] SpaceX was maybe something that was off people's radar at that point, but there was a lot of thematic overlap where [10:12] The goal of that company was to bring back

S. capability and space launch to make it competitive. [10:18] And by reducing the costs and increasing reliability, you know, make there be a lot more activity in space. [10:24] And so. [10:25] I was extremely aligned with Ed coming out of college. [10:28] had worked on rockets for years, [10:30] It was the thing that I really wanted to do, even though [10:33] A lot of people questioned it. And then obviously we see the benefits of now of having the S. in the lead on space launch, where the S. is doing something like 90% of mass to orbit.

[10:43] And with China as number two. And if we had never done that, we'd be looking to China for all our space launch capability. That would be a bad situation. So... [10:53] So I started my career in space, then went to Founders Fund. [10:57] I think, [10:58] That might have looked also like a non sequitur in a lot of ways. [11:02] But... [11:02] I think the piece that was the same for... [11:06] for both of those was: [11:08] was this framework of what should you work on. [11:11] And the framework I...

[11:13] I kind of found that I think [11:15] Peter at Founders Fund did a great job of articulating a few years back. [11:19] What is this, these three criteria? [11:22] where the criteria are basically [11:24] You know, what is something important? [11:26] that [11:27] is otherwise not going to happen, [11:30] that you are uniquely capable of working on. You know, early in my career that was that was space. I had a master's in aerospace engineering, very obvious to go work in space. [11:39] I thought space was important. [11:41] I thought it was something that really no one else was working on besides SpaceX, not in the proper way.

[11:47] and that I could contribute to uniquely. And then [11:49] After SpaceX. [11:51] you know, went to, went to Founders Fund. [11:53] And at Founders Fund, [11:55] We have to remember, go back to 2010, [11:58] There wasn't a ton of interest in engineering-driven companies at that point. [12:02] You know, with my background in engineering plus some business experience that I'd gotten in a couple of years prior, [12:08] It seemed like that combination... [12:10] would satisfy the formula too, where it would be, okay, what's something important? [12:13] Funding. [12:14] engineering-driven companies.

[12:16] that's maybe otherwise not going to happen the right way. [12:19] And I think at that point, if you were an engineering-driven company, [12:22] Most VCs would want to go find a business person to be the founder. [12:26] to be the CEO. So a lot of replacement of CEOs in those days. [12:31] Um, [12:32] And then where the skills could uniquely line up. [12:35] And the combination of engineering and business background felt like that was right. And Founders Fund [12:40] was doing something that no one else was doing at that point.

[12:43] and so, [12:44] So yeah, 12 years for trying to back the right companies. [12:47] full-time with founders fund and then now [12:49] um general matter where [12:51] same exact formula you know [12:53] Spent over a year looking at the space. [12:56] realized that nobody else was really doing a commercially driven [12:59] S. Enrichment Capability. [13:02] Nobody was trying to bring the cost down dramatically to get more nuclear. [13:05] It felt like if we didn't do it, nobody would, and that this was extremely important for the reasons we mentioned earlier.

[13:11] you know, being upstream of nuclear, being upstream of all energy growth. And then finally, [13:16] You know, oddly, [13:17] I felt like my background was really... [13:19] pretty ideal for this, where while I was looking around for [13:23] you know, a team that we could maybe assemble to go do this and then realize that I should, I should be the one to lead it. [13:29] And I was just given a long background in engineering. [13:33] a lot of which would be relevant to the [13:35] you know, the... [13:37] the business and the technology that we would develop.

[13:39] Some business background and ability to get US clearance, which I'd had before, prior to SpaceX. [13:45] And the ability to raise capital for what would be a pretty capital intensive. [13:49] project. So, you know, very different area than aerospace, very different area than venture capital, but felt like it satisfied the three criteria. Going back to SpaceX in 2002, 2003, I'm [14:02] Not sure of the exact numbers, but I think you maybe have mentioned before that it was somewhere around 30 people at the time. Is that, is that right? [14:08] When I was an intern, it was 30 something.

And then I wrapped up school for six months and came back and it was maybe 50 something. So still early days, I think. [14:18] I think a lot of people think 50 People is a big company, and I probably thought that at some point in my career, but... [14:23] I now realize how, how early that was. [14:26] You know, I think we've, [14:27] probably many, many people who are obsessed with technology and company building know sort of some of the pieces of the SpaceX story, or at least what's, you know, the public version of it.

But even thinking about the intangibles, I imagine there was [14:40] a really clear energy to that group of people and a really clear sense of mission that, you know, couldn't have been stronger in many ways at that early stage, pre any proof when you're in the midst of failed launches. [14:55] Are there certain things that you've taken from those days in particular and tried to sort of breed into... [15:02] the general matter culture or certain almost granular or really tactical practices that [15:09] you know, you took from those days, [15:12] picking a really ambitious project and saying, you know, this is how we sort of march towards it bit by bit at the cadence that we need to, knowing that, you know, this is maybe a far, far off goal, but we need to make progress towards it.

[15:24] Yeah, I think we could go into a lot of different lessons learned from SpaceX and a lot of [15:29] Heuristics, rules of thumb, you know, the algorithm, all those things that a lot of people have talked about. [15:34] And we can talk about those. I think the most important thing [15:38] was that [15:39] At SpaceX, we were just trying to solve a very specific mission, reduce the cost of launch. And yes, this would have all these huge downstream implications like the ability to [15:48] develop Mars at some point, the ability to [15:50] get something like Starlink, [15:52] just much more activity in space, commercialized in space.

[15:55] On a day-to-day basis, most people didn't really think about that. We didn't really focus on that. [16:01] The real focus day to day was just whatever was immediately in front of us. What technical challenge should we have to overcome? [16:08] to achieve the mission of reducing the cost of launch. And so everything was hyper-focused on that. We had one metric, [16:14] It was dollars per kilo into low-Earth orbit. [16:18] How do we solve that? [16:20] And so I think the big thing was that we had a very clear mission.

[16:24] And everyone believed that the mission was really important. [16:27] And then... [16:28] The reality is that on a day-to-day basis, you just focus on the details and execution. [16:32] And so I think that's, [16:34] You know, that's something that we have at General Matter also. [16:37] So, [16:38] Everyone knows why we're doing this. [16:41] We know that there's this complete lack of S. enrichment, which means that the S. can't produce its own fuel for its own reactors, which are about 20% of the grid, and can't produce any of the fuel.

[16:51] for advanced reactors, which is the future of nuclear. [16:54] And so. [16:56] We know that this is really important. We do have a very clear metric. The clear metric is [17:00] the price of enrichment, [17:02] Let's just focus on [17:04] dropping the price of enrichment. There's a lot of ways to do that. [17:07] while maintaining safety and reliability or increasing them. And we can talk about why those things are not [17:13] at odds and then on a day-to-day basis we're focusing on on the details of execution and so um [17:20] I think both have this parallel of [17:23] Pick a really important mission.

[17:25] Allying the team around how to solve that mission. [17:28] Amen. [17:29] everybody just kind of gets to work. And then there's a lot of ways in the day-to-day that we try to do that effectively. [17:35] During the decade plus you spent at Founders Fund, you've obviously worked with [17:40] some other amazing company builders, you know, someone who was on the podcast before Trey Stevens, you know, has built an amazing business with Andrew, obviously Peter Thiel, and many others that you've invested in. When you sort of reflect back on the person you were when you joined the fund and the person who started General Matter, [17:59] What did you notice were sort of maybe the biggest shifts in [18:03] your own thinking, your own sort of [18:05] model for how to address these kinds of problems.

Like I imagine you were, you must have been already a highly ambitious person to work at SpaceX, but perhaps there were even some [18:16] Yeah, augmentations to that or shifts to it. [18:18] Yeah, when I started at Founders Fund in 2011, I did have that SpaceX. [18:22] experience, [18:23] Behind me, I had... [18:24] you know been [18:25] been part of [18:27] what would become one of the most important companies and got to see [18:30] how that was built from the very beginning. [18:32] I think when I began at Founders Fund, [18:35] um, [18:36] A natural focus was to focus on early stage.

[18:39] probably the first few years I was there, [18:42] um, [18:42] you know, it seemed as though the right answer was to just [18:46] work with a lot of companies, [18:48] to [18:50] let them get off the ground to fund their initial development [18:53] and to have a reasonable number of shots on goal in the BC. [18:58] framing. [18:59] And the idea was that if [19:01] Maybe if you got involved early and had insight about the technology and realize that there was a real opportunity. [19:07] you could [19:08] you know, you could do better as an investor by being in earlier and getting rewarded for that early insight.

[19:13] you know, towards the end of the 2010s. By that point, I think I'd realized that, [19:18] that [19:20] It's better to concentrate. [19:21] That's notes. [19:22] Instead of having a lot of bets, [19:25] with early stage companies, [19:26] where there's so much execution, there's so much that still has to happen beyond the initial insight. [19:32] It can be better to just work very closely with a team that you really believe in, [19:36] and, [19:37] uh, [19:38] just fully concentrate all of your time and energy into [19:41] a tiny handful of efforts.

And so, [19:44] really by the end of the 2010s, early 2020s, [19:49] I pivoted that strategy of working with a lot of different companies that were all working on really interesting, important things. [19:55] but being spread kind of thin across them and, [19:58] and not concentrating capital into [20:00] to any of them to the extent that [20:02] that we might want to [20:04] to taking an approach of [20:06] working really deeply with companies that I thought [20:09] were underappreciated, and doing something huge. [20:12] So it went from this idea of early concepts, early technologies being the interesting thing, [20:18] to these really, really huge missions being the much more important thing.

[20:22] So some of the really larger investments [20:26] post 2020 were [20:28] Uh, the boring company. [20:30] Neuralink. [20:32] a handful of others. Prior to that, really, I think around 2018, [20:37] company called Nubank down in Brazil that was doing something really important around fintech. Yes. So it was... [20:43] I think that was the primary evolution over about a decade was interesting ideas, interesting ideas, [20:49] interesting technologies, [20:50] compelling. [20:51] compelling technologists, [20:53] to then really just focusing on companies that were executing against a really huge mission. [20:58] then try to put all the energy there.

[21:00] You mentioned that, you know, you spent a year looking for, you know, the nuclear enrichment company that you then went on to build to take it even a step. [21:09] you know, back in this sort of process that brings us to general matter. When did this sort of even appear on your radar as something worth thinking about, a problem that needed to be solved, you know, in some dynamic that at least even opened your aperture for it? Founders Fund had always been, [21:26] interested in nuclear. We've done a few nuclear investments over the decade.

[21:31] Prior. [21:32] And I think it's one of these retro technologies. [21:35] If you think back to the 50s and Founders Fund's tagline for a while was, [21:40] uh we wanted flying cars we got 140 characters and yes [21:44] You know, the flying car thing was really something from the 50s when people believed that technology would make their lives much better. [21:50] And if you think back to that era, [21:52] the two really exciting sectors that people thought about [21:56] were space and nuclear. [21:59] Those were really the two primary ones.

There may have been things around [22:03] agriculture and nutrition and longevity. [22:05] but from a pure perspective, [22:07] hardware technology standpoint, it was [22:10] It was energy in space and it was nuclear in space. [22:13] And SpaceX did the first one and Founders Hunt first invested in 2008. [22:18] And then from about 2011 onward, we'd been looking really closely at nuclear. [22:23] We didn't have a couple of companies. [22:26] We'd been tracking the space. [22:28] over the time I probably met [22:30] almost every [22:31] nuclear founder that passed through Silicon Valley.

[22:34] And it was an area I always thought was this huge, promising area that [22:37] just had not lived up to its potential. You know, you fast forward over that decade to [22:42] 2022. [22:44] And Founders Fund had been talking for a couple years with a company called Radiant. [22:49] and radiant. [22:51] was making an SMR, a small modular reactor, a microreactor, that fit in a shipping container and made about a megawatt of electricity. [22:58] Wow! [22:59] And what Radiant told us was something we'd heard before, but we went into more depth around it and [23:04] Founders Fund made an investment in Radian at their Series A.

[23:08] And what Radium told us was... [23:10] you know, we prompted the question of what's hardest about the company? [23:14] And we thought the answer was going to be, [23:17] getting through NRC approval and getting a license to [23:20] to deploy and operate this reactor. [23:23] And they said, [23:24] sure that's [23:26] That's something we need to do, but there's a pretty clear path and we're not too worried about it. And the NRC is actually great to work with. [23:33] And the hard thing is getting fuel. [23:36] And so, you know, they said, we can only get our fuel from Russia or maybe China.

[23:41] and it's difficult to get from Russia, and it's extremely expensive. [23:44] And it's really... [23:45] You know, it's a challenge. [23:47] And so I said, [23:48] Okay, that's strange. I know that you need this fuel that's enriched up to... [23:51] almost 20% [23:53] is enriching to that level much harder [23:55] Why not the US enrichment companies? [23:58] and the nuclear fuel companies, [23:59] make make the fuel that you need [24:02] "This halo," Radian said. [24:04] What do you mean S. enrichment companies? They really are not. [24:07] And that led to a whole series of...

[24:11] of work in 2023, [24:13] realizing okay the advanced reactor sector [24:16] may not succeed without a source of fuel, and they can't wait forever. They're mostly startups. [24:22] and 20% of our grid runs on [24:25] Low Enriched Uranium, [24:26] in light water reactors that are already deployed, 94 of them across the country. You know, if 20% of our grid is dependent on foreign suppliers, that doesn't seem good. [24:37] And you look into this further and you realize that 25% of that is Russia. [24:42] and the rest is Europe. [24:44] but the Russian component...

[24:45] is now under a ban? [24:47] And that band goes into full effect on January 1st, 2028. And so... [24:51] we will have about a 25% shortfall. [24:54] in fuel supply in the S. at that point. And then you think forward to even things like, well, what about [24:59] You know, what about our aircraft carriers and our submarines? [25:03] They're operating on a stockpile that [25:05] won't last forever. So clearly this [25:07] The supply chain in the S. has to come back. [25:10] and, [25:11] We can't do it in a way that's just [25:13] um you know it needs to be subsidized forever and doesn't compete internationally.

[25:18] And we can blame... [25:19] other countries for subsidizing their industries but [25:23] ultimately we need to compete and we can't make excuses and so [25:27] our approaches [25:29] you know, if this is going to work, we need to, [25:31] We need to do this commercially and we need to stand on our own two feet and therefore we've got to [25:35] Bring the cost down. [25:36] a lot. And so that's, that's kind of how we arrived at this. That's how we realized the need. [25:41] And all throughout 2023, I was looking for companies that were [25:45] getting started enriching uranium.

Is anyone doing this? And [25:50] um by august of of 2023 realized that nobody was and that it would require [25:56] a new company to go do it. [25:57] Why do you think no one had... [26:00] recognized that as a sufficiently interesting opportunity or decided to go after it was, you know, the market. [26:07] deemed unattractive in some sense? Was it just deemed extremely difficult? It seems so... [26:15] so obviously important when you tell this story, but these things can often be disguised for, you know, before someone sees it as clearly as you did clearly.

[26:25] Yeah, I think [26:27] you know, if we talk about the 2022-2023 timeframe, [26:32] Even working on an advanced reactor was deemed probably a strange thing to do. [26:37] And this was one level of abstraction from that, maybe two levels. [26:42] First, you have to care about advanced reactors. [26:44] then you need to care about [26:46] fuel and then you have to realize that enrichment is a missing piece so [26:49] It's not something a lot of people would naturally come across or think about. You know, again, this was pre-any Russian uranium ban.

[26:57] It was pre any growth in AI data centers and that boom that's really been a big tailwind for nuclear and made us realize that. [27:04] Yes. Need more energy production. And so I think, I think it was just something that people, [27:09] weren't thinking about they were barely thinking about reactors certainly not thinking about fuel [27:13] And, [27:14] I think it's only in the last couple of years that it's really become obvious to most people how important this is. And then there's probably a few other ways to get at this, I think.

[27:23] you know, we will be the first [27:25] private company to go do this. [27:28] And... [27:29] there may be an element of [27:31] you know, wondering if this is even the territory for a private company. [27:35] And only through... [27:37] Long conversations with the DOE were... [27:39] you know, [27:40] Did we realize that this was a need and that this would be supported? [27:44] And so I think it's just the type of space that's a little bit off the map. [27:48] And, [27:49] seemingly [27:50] you know, something that, [27:51] the private companies hadn't done before, [27:54] And I think it was also viewed as something that [27:56] Couldn't be very profitable.

[27:58] There was just the domain of [28:00] you know, nation states subsidizing the activity for strategic purposes. [28:05] and not something that you could bring down the costs and compete with [28:08] adversaries who were maybe subsidizing their production. Maybe it took being very close [28:14] to the SpaceX story to really realize that even when the costs look like they're not coming down in a sector, [28:21] Um, if that is, [28:23] You know, if that is a sector that's been dominated by government efforts that have a different goal than reducing costs or being purely commercial, [28:32] or if it's dominated by cost+ players, [28:34] That's a big incentive to bring.

[28:36] and you probably can if you focus on that. [28:40] And so that was really our path to realizing that not only was this needed, but that [28:44] It was something we should go do. You know, maybe this is my, my storytelling, my narrative brain, you know, looking for, for more drama than the reality of it. But was there like a particular moment for you where you thought I just simply have to build this myself? You know, I, after maybe a slew of these meetings in a, in a given week or, or some amount of banging your head against something.

Yeah, it was, it was really realizing that. [29:09] you know, in early 23 that the S. didn't have this capability and then doing that search for companies [29:14] and having some hope that we would find one or two. [29:18] And then, yeah, by August, realizing that even the ones that, [29:23] We hoped would do it. [29:24] we're not likely to be in a position to really do this in a [29:27] the commercially competitive way [29:30] that we wanted to do it that could bring the prices down dramatically. [29:34] And that was really the key thing.

It was... [29:36] You know, there's certainly an onshoring component to this and bringing back domestic capability that, [29:42] where we care about that. [29:44] you know, our team would do this for alone. [29:46] But the thing that really is the North Star is let's make nuclear energy expand. [29:51] Let's make it grow into what it always should have been. [29:54] And to do that, [29:55] you know, there's three, three things you have to do. It's, [29:58] I think people will go for an energy source. [30:01] that is clean, [30:02] Safe.

[30:03] baseload and then also lowest cost. And so that was the missing piece that we wanted to solve through enrichment. [30:09] You founded the company with Lee Robinson. How did that sort of initial team come together? And, you know, as you thought about your strengths and knowledge, like what were the pieces you were trying to sort of fill? Yeah. And there's a larger founding team than that, which has been. [30:27] I talked about... [30:28] before, but Lee was one of the early team members and, and one of the really faces of the company, given his experience.

And so, [30:36] Yeah, Lee and I met. [30:38] There are a couple different intros at the exact same time. [30:41] He was running... [30:42] You know, within the DOD, there's a program called DIU, Defense Innovation Unit. [30:47] And they do funding of early stage companies. And he was... [30:51] He was really doing the reactor program. [30:53] And so a couple people put us in touch. [30:55] And, [30:56] and said hey, [30:57] You know, I know that you're looking around for fuel. You're trying to figure out what's happening in that area.

With this program in the Army, maybe they have a source of fuel. Maybe they have other things that you should learn about. Go talk to Lee. [31:09] And so I got put in touch with Lee. We started talking. I asked him, [31:12] hey, we're investing in [31:14] and SMRs. [31:16] at Founders Fund, [31:18] and they don't seem to have a source of fuel, does the army have a source of fuel? [31:22] I sure hope the army has a source of fuel because obviously you're doing this program [31:26] And then he looked into it and realized, no, no, we don't.

And [31:30] Everybody is looking for the same halo that is not currently made. [31:34] And the only way to get it is from the DOE doing down blending. [31:37] operations or finding other supply that's [31:39] That's... [31:40] in relatively short supply and i think that turned him on to this problem and he spent a couple months looking into it and and became [31:47] as concerned as I was about it and said, [31:50] okay, this is what I need to work on next as well. I then recruited a few other people onto the team.

[31:57] We got started in late 2023 and... [32:00] um [32:01] Yeah, have been growing ever since. [32:03] This may be a bit of a diversion, but you said down blending, and I have no idea what that process is. And it sounded quite interesting. [32:12] Yeah, that's, you know, you enrich up to a certain level. [32:15] So if you think of concentrating E235, you can also dilute it. [32:20] And so the S. does have stockpiles of [32:23] of uranium that's enriched to above 20 percent oh interesting they can just blend it for weapons presumably right [32:30] Or fuel for the Navy.

[32:33] And so in terms of weapons, there's way more than enough warheads. And I think, [32:37] Honor weapons I don't believe even use. [32:40] Uranium. [32:41] It's not really... [32:43] the current generation technology. So really when we talk about stockpile, it's really for the Navy. [32:49] It's really to run the reactors that are in subs and aircraft carriers. [32:53] And so, [32:54] that side pile is very precious, and so we don't want to [32:59] reduce that at all. [33:00] But one way to make Halo... [33:02] is to take that and dilute it down, which is really doing negative work, taking a really valuable asset and making it less valuable.

But [33:10] That is, [33:11] potentially necessary for doing some initial testing on these reactors. So, [33:17] That was really the only other option apart from a small amount of Halo that's [33:21] that's available and [33:22] has been identified and mostly allocated to reactors. [33:25] as ours. And so there's a desperate need for new supply. Maybe we could talk a moment about how [33:32] this came to pass because, you know, we maybe started this conversation a little bit talking about how the U S had led in this. And then, you know, to, to get to the point that you identify in, in 2023, where you realize 25% is coming from Russia.

The rest is coming from Europe. 0% is coming, uh, from, from America itself. I think you alluded to the falling of the Berlin wall, but what were the specific pressures that allowed that to happen? Yeah. So if we, if we recap it again, uh, [33:58] The S. was the first to do enrichment. [34:01] It did it using something called a gaseous diffusion approach. [34:06] That was the first generation technology. It's what... [34:08] allowed the US to win [34:10] World War II, and we did that at a couple sites in the

, [34:14] And, [34:15] At those sites, the S. did a ton of production and became the world leader. [34:19] like I said, over 80%, [34:22] of global supply. [34:24] All the way up until the fall of the Berlin Wall. [34:26] And at that point the cold war ended. [34:29] And there was this question of what should we do about enrichment at this point? One of the most [34:34] important [34:36] policy, you know, international, [34:39] efforts was around disarmament. [34:41] The US and Russia had built up so many weapons. [34:45] and there was a desire to reduce that number.

[34:48] steadily. [34:48] And so there was a program called Megatons, [34:51] to megawatts that was set up after the fall of the Berlin Wall after the end of the Cold War. [34:57] And we partnered with Russia and we said, [34:59] you know, [35:00] We will take your warheads and we'll... [35:02] When them down? [35:03] That downplay that I talked about. Yes. [35:05] Ah. [35:06] and we will [35:07] blend them all the way down to a point where we can use them in our reactors, [35:10] And we were going to take these megatons of weapons and turn them into megawatts of [35:14] energy.

[35:16] So we did that for a long time. That turned into... [35:19] You know, at some point that program then ended, post-2000 in the 2010s. [35:25] And, [35:26] that transitioned into [35:29] you know, brokerage, trading with Russia to bring in their enrichment services, [35:33] inside of their weapons in parallel the s [35:36] started doing a lot of international trade with Europe, who had their own production. [35:40] of enrichment. [35:41] of enriched uranium product. And so [35:45] We imported from [35:47] Europe as well, and that was about 75% of supply. [35:50] And, you know, Europe had had [35:52] developed a next generation technology that was more economical, [35:56] And, [35:57] In the 2000s and by 2013, the

S. had made this transition of saying, [36:02] Instead of using our first-generation technology, which is very expensive, [36:06] These are our allies. We're in a world of international and global trade. [36:09] We don't need to do this anymore. [36:12] we can rely on them we should rely on them it's more economical [36:15] And so let's import [36:17] our enriched uranium [36:19] and we can shut down our plants in the S. And by 2013, we shut down the last plant, which was in [36:25] Paducah, Kentucky. [36:26] Yes. But that's when the

S. really ceased doing enrichment and instead relied fully on [36:33] on allies and then adversaries you know just to sort of flesh out a little bit of the understanding of this market uh [36:40] the sort of large companies that I came across, and perhaps you can, you know, give a better sense or sort of, [36:44] Rosatom in Russia and maybe Orono in Europe and [36:50] In general, it seems like [36:51] As you alluded to, these are all [36:53] almost always sort of government subsidized entities in some capacity. Is there sort of like a pure play, like really private enrichment company globally at scale?

No, there isn't. So, [37:06] Arano is mostly owned by the French government. [37:09] There is one other European player, [37:12] named Urenko. [37:14] And this is a consortium between [37:17] The UK, the Netherlands, and two German utilities co-own Urenco. [37:21] And that's another, that's another enrichment company. [37:24] But there is not [37:25] really a global international private [37:28] enrichment company they're they're generally uh state-owned [37:32] This episode is brought to you by Persona, the B2B identity platform helping businesses verify users, fight fraud, and build trust. Fraudsters are already using AI to spoof faces, voices, and documents, so your defenses need to adapt just as fast.

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[38:26] Want to see for yourself? Generalist listeners get a free year of the starter plan. Head to com slash generalist and check it out. [38:35] And you mentioned that there's this ban... [38:38] coming into effect in January, 2028 on Russian imports. And that that will create this sort of 25% shortfall. [38:48] Was that? [38:49] Something that you were. [38:51] you know, perhaps imagining might happen at the time that you were sort of thinking about this company or, you know, wasn't even on the radar as a possibility that that might happen?

[39:01] Not on the radar. The Ukraine conflict had already started, but [39:05] Russian uranium was already coming into the US. And it still is. So that program does have a waiver process and utilities who don't have any other source of uranium can still import Russian uranium. [39:15] And so they are. And so [39:17] We're trying to bring online [39:18] as quickly as possible S. and Richmond said that they don't need to rely on. [39:22] Russian uranium. [39:24] But that ban was not something... [39:26] we anticipated or that a lot of people anticipated.

[39:29] Prior to that ban, there was already a cap on Russian imports of uranium. [39:34] which put it at roughly 25% of US imports. I see. And so we knew that that would always be capped. [39:41] Despite people's criticisms of Russia's pricing on it, uranium, it would only be 25% of the market, and then utilities would still need to go seek a second source. [39:49] And that would be European supply. [39:52] And so from a business dynamic standpoint, in order to operate, we really would just [39:57] You know, we would need to be able to beat European cost structure.

[40:00] Yes. Not necessarily Russia's cost structure. [40:04] That said, [40:05] our long-term goal is still to bring down the cost of enrichment [40:09] for utilities and for reactors and for every application of nuclear energy. And so, [40:14] you know, Russia or not, [40:16] We want to be the world's lowest [40:18] Lowest cost provider. [40:19] and, [40:21] if we're lower cost than Europe, if we're lower cost than Russia, [40:24] that's not a stopping point. That's something we'll continue to push on because the mission is not, [40:30] to beat them. [40:31] or to be [40:32] you know, commercially competitive on some measure.

[40:35] but to just [40:36] accelerate the growth of nuclear energy. And I imagine, you know, I'm sure there are parts of this that you can't talk about, so I'm not trying to delve too deeply into sensitive information, but it feels like the only way you could realistically do that is [40:48] by having like a really differential technology that allows you to sort of compete with a very heavily subsidized alternative. Is that at least at a high level, the, the, the rough [40:58] uh way that you think of your comparative advantage i think there's a few areas of of advantage that [41:04] that we should cover, but [41:05] Technology is certainly part of it, and our approach has been to take a clean sheet redesign [41:10] of enrichment.

[41:11] agnostic to everything and just start over. [41:14] and think what is our goal? Our goal is [41:16] safety, reliability, and then reducing the cost of enrichment. [41:20] So that led us down our tech path. [41:22] I'd say the most important thing about developing the technology is really the team. Our approach has been to assemble a team that has experts from the industry, [41:32] who have been at S. National Labs, who have developed technologies. [41:36] And then those who have actually been [41:39] on the ground breaking into new industries [41:42] in the hardware space.

[41:43] where there's hugely capital intensive [41:46] Barriers to entry. [41:47] and where [41:49] Companies have done clean sheet redesigns to make something affordable that was not viewed as affordable before. [41:54] This points us towards... [41:57] hiring people who are [41:59] X Tesla. [42:01] exanderol [42:02] X space X. [42:04] which is why [42:05] We're based in Los Angeles. [42:07] A lot of that talent is there. And so it's been this unique merger between [42:11] Yeah, people who have brought down the cost of things by 10x or more. [42:16] made them competitive, did clean sheet redesigns, [42:18] and took a really commercial approach.

[42:21] That's really the mindset that we have, and I think, [42:24] In an industry where a lot of efforts had other goals, scientific goals, non-commercial goals, [42:29] or where people were inside of organizations that primarily operated Cost Plus, I think [42:35] breaking that mindset and just really focusing on cost structure and speed of execution has been [42:41] It's been a big thing. [42:43] On the cost side, there's certainly a technology piece, but I think there's also a team piece. [42:48] and then a business. [42:49] business structure, like long-term mission piece.

[42:51] Yes, that makes total sense. [42:54] It also makes total sense to me that [42:56] you know, you're so advantaged, [42:58] on the team piece in some sense because of your connections, but also because some of the great companies that [43:04] America has built over, you know, the past decade plus like a SpaceX and a Tesla. [43:10] The part that I was curious about hearing you talk through that is because of the way that America has sort of lost its position in enrichment, is there like an expertise gap that's difficult to fill at a certain level?

I mean, maybe there are still great people at these national labs, but [43:26] are you finding that that's, I don't know, in some sense lacking? The US still has great science. There's people at the labs who are incredibly [43:34] smart and experienced in working on these technologies. [43:38] So the skills are there. [43:40] I'd say in the industry, [43:41] There's also this interesting dynamic where a lot of people went into the industry in the early days. [43:47] when it was [43:47] this brand new opportunity, extremely exciting, growing really quickly. [43:52] A lot of those people have the right mindset.

They're very late in their career. [43:56] They might be 70, 80, but they... [43:59] they bring with them that experience of thinking [44:02] about things from first principles? [44:04] And then you have a lot of people who are really enthusiastic about nuclear, really cared about nuclear, despite it not being exciting. [44:10] industry from the 70s [44:12] you know, to almost today. [44:14] And, [44:15] you can handpick those people who [44:17] really have the right mindset. [44:19] and did it out of passion. [44:21] despite it maybe not being... [44:23] the fastest moving sector.

[44:25] And then now you have a new generation of people that are really excited. So, [44:29] and really talented and coming out of college and [44:32] all fresh skills. [44:34] And so it really looks like if you imagine like, [44:38] Okay, where's the... [44:39] Where is the skill that we need? [44:41] What does that skill look like? [44:43] It's almost like a bathtub curve. [44:46] There are a lot of people who enter the industry [44:48] early on. [44:49] And then there's fewer people who are really [44:51] the right fit who were in the industry for a very long time.

[44:54] um they're out there we have to we have to find them and then there's a huge wave of of new grads [45:01] because they care about the climate, [45:05] or they care about having more power and being a high-energy society. And so, [45:09] Yeah, there is the talent out there. That's not really the bottleneck. [45:14] When we think about nuclear talent, we are combining it with other forms of engineering talent. Everything. [45:20] you know, computer science to [45:22] to applied in engineering physics, to [45:24] aerospace, like [45:26] Every discipline, mechanical, [45:27] We use all of them and then we'll pair them up with the nuclear experience on the team and really get a multiplier there.

[45:34] So the talent is out there. [45:36] um, [45:37] It spans multiple decades of people entering the industry. [45:41] We leverage it with [45:43] generalist sort of engineering talent. [45:45] And then in terms of where it's located, it's all over. [45:48] So by nuclear talent, it's completely scattered across the country. [45:52] The one thing that's not scattered is the rest of the engineering talent, which is primarily California. [45:57] Hence, FLYA headquarters is. [45:59] is in really the hardware ecosystem of LA. [46:02] You know, just to circle back to the, you know, sort of 2028 deadline on the on the Russian [46:08] um, [46:09] enriched uranium.

I think you've said that, you know, the goal is to get up and running [46:14] and, you know, producing by 2030 for general matter. Is your sense that the shortfall during that period of time will sort of have to be filled by European players? Or how does that end up working out in your view? I think it'll be two things. It'll be inventory that utilities have built up. [46:31] or contracts that they've already lined up so that they know that they're covered. And a lot of the extra supply will be Europe.

[46:37] So inventory and increased European supply. To sort of take a look at how you see the industry growing and playing out over the next years. [46:47] 10, 20, you know, plus years, you know, I should, I should have this number, uh, to hand. But when I was looking up the sort of, [46:55] total addressable market, you know, whatever one might think for enriched uranium, it's not like a, a market size that a venture investor typically would say like, you know, this is spectacular. This is such a large TAM. Now, of course, you know, zero to one, [47:09] Peter Thiel would say, you want to start in a sufficiently small market.

So maybe that's [47:14] part of the thinking here. But I imagine the dynamics are such that you can [47:19] see it becoming extremely large in the fullness of time. So a convoluted question there, but I guess I, I, [47:26] I'm interested in how you think about the [47:29] the potential opportunity here. [47:31] beyond just the real strategic importance. Right. And to put numbers to that in, [47:36] you know, the numbers you probably looked at, [47:38] Inside the, demand for enrichments, a couple billion dollar market. [47:43] Call it $2.5 billion.

[47:45] roughly in recent years. That's not, as you said, like the sort of trillion dollar market that a lot of [47:51] investors get excited about. [47:53] We do think that market's going to grow a lot. [47:56] So if you look at what both [47:59] the Biden administration and the Trump administration have said and committed to on the growth of nuclear. [48:05] The Biden administration, [48:06] set a goal of tripling nuclear by 2050 and made international commitments for that. [48:11] And then the Trump administration increased that to quadruple to 4x by 2050.

[48:18] And so this is a completely bipartisan thing that nuclear is going to grow. [48:22] you know, three to four acts in the coming decades. So that now puts it at [48:25] let's say a $10 billion dollar [48:27] market in the US alone. [48:29] And then there's US allies. [48:32] In Europe, they have production, but they're still allies. They would love to have... [48:36] US supply. [48:37] And so that market maybe is a little bit bigger than 10 billion. [48:40] But like you said, I think [48:42] I think the formula is, you know, don't worry so much about market size.

[48:46] worry about solving a really important problem that no one's solving. [48:49] and [48:50] And what motivated me to work on this is that [48:54] really without a new source of domestic enrichment, [48:57] that's a much lower cost, it's going to be very difficult for advanced reactors to succeed. [49:02] And that's what the whole industry wants. We want to see the growth of nuclear [49:06] and [49:07] If that's going to happen, it's likely going to be through advanced reactors, at least art. [49:12] And so anything we can do to help them succeed is really our goal.

And so