Bloom Energy’s KR Sridhar on why all CEOs need a power strategy

As a NASA engineer, KR Sridhar was working on producing oxygen on Mars, but grew frustrated at chasing goals that always seemed to be 20 years away. (“Martians weren’t paying good money either,” he deadpans.)

In 2001, he co-founded Ion America, which became Bloom Energy, a company using novel fuel cell technology to provide power to sites from data centers to individual homes. Excitement about AI’s massive energy needs has lifted Bloom’s stock more than 500% in the past year.

The Indian-born Sridhar has been thinking about energy since he was young, watching his home country burn through its foreign currency reserves buying oil.

Having been mentored by the likes of Intel’s Andy Grove, he’s on a mission to make clean, reliable energy affordable to everyone, from sub-Saharan Africa to Bangladesh. Now, Bloom’s own growth is being powered by US technology giants such as AWS and Oracle, with which it has contracts to provide power to new data centers within 90 days. But he has a message for CEOs beyond the energy-hungry industry of AI hyperscalers: They, too, need to get serious about their “power strategy.” Here’s what he says a good one looks like.

This interview has been condensed and edited for clarity.

Andrew Edgecliffe-Johnson: You’ve been talking about the need for all CEOs to have a “power strategy.” What does a good power strategy look like?

KR Sridhar: Think of AI as an intelligence factory, and that factory is going to need a dedicated power source, because its intelligence is what drives everything else. You can’t afford to lose power there, and you can’t afford to wait for physical infrastructure to catch up and provide you the power that you need. We are also living in a climate-changed world, which means poles and wires bringing you electricity are going to have disruptions that you cannot afford to have. Reliability is going to become super important. In the past, you would have used a backup generator and batteries to take care of it. But given the amount of power needed, you can’t afford to just have Band-Aids. You’re going to need a more reliable, permanent solution.

How much of the demand growth you’re seeing is driven by AI?

For the next eight to 10 years, AI is going to be the dog and everything else is going to be the tail, in terms of energy growth. To put it in perspective, there are four companies within a 10-square-mile radius of Bloom in Silicon Valley that together are going to invest close to $2 billion a day, weekday and weekend, in capital expenses alone. This is mind-boggling. It’s easy to just say that number and not stop and think about what the heck that means. And that entire $2 billion worth of CapEx requires power to operate.

What utility, what infrastructure, is built for that speed? Nothing. I’m not saying any one solution is sufficient. We need all of the above. But because transmission distribution, which is like your highways, cannot be built fast enough, you have to obviate the need for those highways, which means you need to produce on-site power.

To feed this demand, you’ve talked about Bloom moving at AI speed. What have you had to do to create that culture of speed?

There’s not much you can do to the culture of a turtle to make it go faster. You need to have the DNA of a rabbit, and then you can make the rabbit move faster. We were built for that, because when we started the company, we envisioned a day like this to come.

So we designed a factory where we did not need any clean rooms, which means that we can take warehouses and convert them into factories. Then we said, we are going to only use the kind of equipment which is being used in other industries at maybe 1,000 to 10,000 times more than what we will need to power the entire planet.

And then, starting in 2004, we said we are not going to depend on a Chinese supply chain. If we believe in energy abundance for all, there cannot be a single source to strangle you.

Many companies have gone quieter on their net zero ambitions. Have you seen less urgency about clean energy demand from corporate customers?

I think today, they will take any source of power because they’re starving for it. They’d rather not ask you questions on what the carbon footprint is. They’d rather just take the power from you. That said, if you offer them a solution that says, at some point, two years from now, I can get you to net zero, they’re very willing to talk to you, and I would say the large technology companies will even be willing to pay a little premium. But that’s not going to be the driver [of their spending]; the time to power is going to be the driver.

What do you look for when you are appointing people to senior roles?

I look for passion, resilience, and ability to operate when there’s a lot of ambiguity.

[Comfort with ambiguity is particularly important in a business like this] because there’s no existence proof. The easiest way I can explain this to you is with a children’s jigsaw puzzle. Most smart people who have done a lot of puzzles will start with the corner pieces, because it’s easy to find them and put them together. It’s the exact opposite in a business like mine, because if you don’t solve the most important thing, the most difficult thing out there, why do you need the corner pieces? You’re not 100% sure when you start that you have all the pieces. So why bother doing the easy pieces? You crack the code on the hardest things that you have to crack. Otherwise, go home.