Meta signs a 20 year nuclear power deal with Constellation Energy that is worth “billions of dollars”
Meta signed a 20 year nuclear power deal with Constellation Energy that is worth “billions of dollars”.
“It’s billions of dollars of capital that you’re signing up for to run a plant for 20 more years,” said Constellation CEO Joe Dominguez.
The Power Purchase Agreement (PPA) will enable Meta to buy the clean attributes of the power generation to offset the less clean power elsewhere i.e. Meta won’t take power from the Clinton Clean Energy site.
According to Constellation, the plant produces 1,091 megawatts of electricity.
Jefferies estimated that Microsoft paid $100-$115/MWh for a similar deal in 2024.
Assessment
Assuming 93% capacity factor and $115/MWh electricity price, it would cost Meta Platforms around $20.5 billion over 20 years (1,091 MW×24 h/day×365 days/year x0.93x$115).
@Aron I just saw that there is a new interview with the Meta CTO which might have some good insights.
Overall i would say Ai developments remain my number 1 concern with Meta esp. after 11 out of the 14 original authors of Llama left the company and Behemoth is getting delayed due to capability concerns.
So I think it remains one top area to stay focused and on the cutting edge of developments on as it will influence my investment decisions a lot.
Good catch. I agree with your assessment. By the way, they recently divided the AI team into two to speed up execution.
Bosworth mainly talked about Reality Labs. He didn’t say anything on AI other than that it has boosted their conviction that having the devices wearable, with sensors and contacts has been important (min 12.28).
He said he was skeptical about the VR/AR due to the investments involved but Zuckerberg found a way to have him take up the role (min 3:06). This confirms past employee comments which said Zuckerberg tends to get excited with things and hard to advise.
He pointed out that they are on track to make 2025 a “make” year for Reality Labs (min 7:00). He had previously said 2025 would be a “make or break year” for Reality Labs.
He signaled that they are ahead of Apple Vision Pro, pointing out that Apple’s engineering team executed well but made some mistakes when it comes to weight (min 17:50)
Meta in talks to invest over $10 billion in Scale AI
Meta is in talks to make over $10 billion investment in Scale AI, a startup company that provides data for training AI, Bloomberg reported citing people familiar with the discussions.
Founded in 2016, Scale AI generated $870 million in revenue last year and expects to grow revenue to $2 billion in 2025.
Scale AI was valued at $14 billion last year.
Meta already partnered with Scale AI in its Defence Llama project, a Llama model intended for military use.
Meta’s new AI model, V-JEPA 2 helps robots understand and respond to the physical world
Meta releases a new AI model called V-JEPA 2 that enables robots and other AI agents to understand the physical world and respond to it.
“These capabilities are essential to building AI agents that can think before they act, and V-JEPA 2 represents meaningful progress toward our ultimate goal of developing advanced machine intelligence,” Meta said.
“The models we use to develop this kind of intelligence in machines are called world models, and they enable three essential capabilities: understanding, predicting and planning,” it added.
Meta would be able to use a lot of the compute capacity they are building in the core business for the next three years, Susan Li said
In the “Cheeky Pint” podcast, Meta’s CFO Susan Li said that if the compute capacity that they are building will be less than the computed needed for inference, they would be able to use a large part of it in the core business and where they expect the core business to be in the next three years (min 19:00).
"To some extent, we still use a lot of this compute capacity in our core business and where we expect our core business to be three years from now. Frankly, we use more compute capacity in our core business. But this expansion is not infinite, right? The real question is, what happens if two years from now you have built so much compute capacity that you can’t foresee that the fallback plan can provide a reasonable ROI if the main project doesn’t come true? I think this is a question that all of us will learn in the next few years, " she said.
She said that the company’s focus is free cash flow (min 17:00). Li said she had to replace the “EBITDA hat” given to her by Zuckerberg with “free cash flow hat” because she realized that depreciation is becoming an important metric in their business. She also mentioned that she always questions Zuckerberg’s bets when they are budgeting to ensure that they can deliver the best ROI (min 9:00).
Li pointed out that Zuckerberg is good at giving feedback (timely, direct and respectful feedback) (min 6:00).
Assessment
I have often liked that Meta has a strong back up plan in case they won’t need all the compute capacity they are building. It’s also good to see Li having the interests of investors at heart, ensuring that Zuckerberg doesn’t get overly excited in so many bets.
