Big Tech's Dirty Energy Secret, Avatar's O&G Shark Tank & The AI Divide | BDE 03.27.26

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Alright, so Kevin, if reincarnation actually exists, and I get to come back,

I want to come back as one of my children.

These three daughters live like the greatest life on the planet.

You know, where are you? Oh, I'm heading to Tokyo. What?

Hey, where are you going? I'm going to Paris, you know.

Anyway, so my kids have led the greatest life.

And of course, it's all been fueled by hard hydrocarbon money, right?

I mean, that's how the ad made his money.

And if you asked any one of those three kids, should we ban hydrocarbons?

Oh, yeah, they're destroying the planet.

And so, like, I'm traumatized by this, but that's a whole other thing.

I was reading your bio.

There's hope.

There's hope for my kids.

Were you really a vegan?

I was.

Back back in the day, yeah.

When I was in, when I was in elementary and junior high in high school,

I was a vegetarian and vegan.

And my, I come from a deep, deep rooted oil family as well.

My grandfather actually started the first Canadian drilling company with his business partner from Odessa, C.C.

Triple it.

And went on my own journey as, as myself.

And was it rebelling?

It was rebelling.

It was rebelling.

It was rebelling.

Yeah.

And, and yeah, but I think my kids have just been programmed.

I mean, I love the Montessori School.

They went to.

There was a lot of CUME by Yacht going on.

Yeah, no.

And actually, when I started eating meat again,

this is after, but it was when I went to go work on drilling rigs as a rough neck.

And I was like, I need to eat 5,000 calories a day to give my workload.

I realized my, my vegan auctions were, you're not doing that on tofu.

No.

You know, so it's interesting, but it's interesting where your, where your life takes you.

But always unabashedly pro hydrocarbons was just, yeah, was a vegan for good 15 years of my life.

Oh, wow.

Yeah.

Wow.

The Sarah, my, my daughter Sarah went vegetarian or vegan.

One of them just out of respect for animals.

She didn't want to be mean to animals.

But now you should, she'll get a ribeye.

She kind of came back.

Yeah, it's, it's attractive.

There's, yeah, there's something to be said about driving your parents crazy, but that was,

that was my mechanism of, of doing it.

But, yeah, it's, it's interesting, but it's also interesting.

Just your point around like, you know, generate, living off of the benefits of the hydrocarbon economy

and the benefits of the created for a civilization.

And then, no, no, we should ban hydrocarbons.

And it's, in the interesting moment, I'd say the world is in right now where it's waking up to the benefits of the hydrocarbon economy

and, oh, crap, maybe we should make the development of the development of these resources so we can live as a civilization

to the standards where we've come accustomed to by developing these resources in, in a, in a more positive way.

And so I get a chance through my work to work with, you know, hundreds of young professionals in the energy industry.

And there is a lot of hope, I'd say, for the future.

These, these professionals are, are 10 times smarter than I was at, at their age.

And seeing the technologies that they can come up with, I think is, is pretty exciting for an energy abundant future.

Yeah, no, I think, I think when Big Tech, the light went off, that's actually a bad pun and not even true.

When, when the lights went on for a Big Tech and them going, oh, my God, we actually need the power to run all this stuff.

And they decided we weren't the worst thing on the planet.

I think the tide, the tide really shifted there.

Yeah, it was funny. I was in San Jose last week for the NVIDIA's GTC conference.

And it was funny. It was at this one executive dinner and with all of these tech people.

And I got somehow got sat beside the one other energy person that was in the room.

And we were actually joking about that.

We're like, how did these companies go from, you know, committing to being net zero by 2030.

And by 2050 suck out every molecule CO2, they've ever put into the atmosphere into, you know, the drill baby drill crowd.

And we're both kind of killing ourselves laughing and all the tech people are like, looking at us and like, what are you?

It's talking about we're like, you know how you're powering these data centers, right?

Like there was still a bit of this disconnect, right?

That they didn't either think understood just the absolutely voracious amount of natural gas.

These things.

In coal.

Yeah, in coal.

So this was really funny.

About three or four years ago.

Did you ever see the Chappelle show when he did the racial draft where all the different races drafted people like Tiger Woods?

You know, they drafted all the mixed race people.

And it was really funny.

Like I think the Asians drafted Tiger Woods.

And you know, somebody drafted the Wu Tang clan.

It was really funny bit.

So I did a spoof of that on the podcast where we did the energy policy draft.

So I had nine people on and you could choose, you know, some energy policy.

And you were kind of energies are the world for the day.

And we all had to do whatever you said.

And you know, there were equal parts serious thoughtful stuff like Mark Meyer came on and said, I'm choosing natural gas, blah, blah, blah.

And laid it out.

David Ramson would who I adore.

Came on and said, I'm drafted number eight.

Even if I was drafted number one, I'd still do this.

I'm going to take coal.

And the reason I'm going to take coal is because I'm going to have energy.

I'm going to be able to live a good life.

And I don't really care about global warming because if we could make the earth five degrees warmer Canada might be bearable.

That's right.

That's all right, David.

Way to go.

Yeah, this coal looks like a pretty attractive energy source in in a world right now where energy constraints are kind of crazy.

You know, it's it's, you know, coal has more more lives in a cat.

It seems like I've never seen, you know, the predictions of the end of coal so many times just for everywhere to go turn back on their coal plants.

Right.

Yeah.

Now I think it's definitely the definition of base load.

I mean, you know, draw a picture of it.

So tell me about avatar because you and I haven't hung out together, but I was reading about avatar.

That sounds freaking cool what you're doing.

Yeah, it's a pretty cool platform and that we've created.

So we call ourselves an energy technology venture studio.

So a normal venture studio is, you know, we're a bit of capital.

We'll go find some dormant IP and find a unique problem and then kind of build a team around it.

And what we quickly realized was in the energy industry, you can't disrupt it in the way that Silicon Valley thinks about disruption.

And two in our industry being a multi billion dollar safety critical highly regulated industry is the problem owner and the innovator can sometimes get so far apart from each other.

The innovator will go solve something.

The problem owner is like, yeah, I've got, I've got no interest in solving that.

So we flip the model on its head and said, well, how do we work with people inside the industry who actually know where the pain points are?

And understand how the industry operates.

So we work with the employees of the oil and gas companies who come into avatar and works through sort of three legs of the stool.

The first leg is an energy ideation program, which where we're at right now.

Over three months, they get to listen to some super high ranking speakers in the macro threads of the energy industry on everything from technology to economics and finance to geo politics.

And then get a chance to work as teams. So they'll be multifunctional as well as multi company.

So one team will have one employee from Exxon, one from Shell, one from Sinovus.

And then what is that? Is that like one day a week people showing up? Is it three straight weeks and I'm camping out in a hotel or what?

What is that in the first phase? It's every other Friday for the afternoon for three months.

Oh, cool.

And then they'll have, you know, it's sort of in the first phase it's ideation.

We want them to be exploring, you know, a whole bunch of different problem sets. So it's sort of two to four hours a week for an idea and experience in the first phase.

And then once they come up with our idea and the first phase, they get a chance to pitch their idea back to the executives of these oil and gas companies for implementation.

And then the best of those ideas get into our studio phase.

We're now sort of goes up to a day a week for six months.

And then they get a bit of budget to go and actually go and build it fast track access to prototyping labs post secondary labs.

Like shark tank on steroids, maybe, right?

Yeah.

We do call the first phase shark tank where they get a pitch their ideas to executives and actually pretty impressive what they can come up with in a pretty short order of time.

And it's always good fun to watch, you know, emerging leaders in our industry, pitch their ideas to executive for for capital.

And then sort of in the second phase, they get a chance to go and prototype it and then should the fundamental science work enough of a market poll.

We handle for the IP and the developed content into a new co the corporates get beneficial commercial investment rights to the new co.

And then we have a venture capital fund that will see that and sort of bring it to market.

And so our philosophy on this is how do you give the large corporates who are needing new solutions in the to develop new production.

The nimbleness of a startup world, but then should the technology work then the startup gets the horsepower of a large corporate because it's sort of working inside the industry that's kind of ready to to adopt it.

Gotcha. Oh, that's very cool. And so ultimately you guys are making money just as a VC fund and effect.

Well, yes, the corporates will pay for participation in the program.

The corporates will also pay for priority development of some of these technologies to get equity rights to it.

And then yeah, and then we do have take a banishment fee on our on our VC fund. Oh, cool. Yeah, that's very cool.

So give me a big huge win. So that's teeing you up to brag and crow all you want to.

But then I also want to hear after that, the greatest idea that failed.

Okay. Okay.

Um, I, well, I got a few, I've got more of those that I do. I got all morning crow about all your wounds.

Okay. Now these, these are all kind of my favorite children. So I'm really going to have to be careful, but I'll give you.

You know what I, you know what I do. Like once a week, I send a text to my three kids and I rank order them.

I go, this week Sarah is my favorite. Charlie, your number two.

One week Sarah was particularly snarky. I said, Kelly's my favorite child this week. Charlie, your number two. Sarah, your number 17.

Just for the record.

Um, yeah. So let me start maybe just knowing the crowd.

Um, let me start with a production optimization tech. So liquid blowdowns, um, especially in the money basin in Canada.

Eventually the well will sort of get to a point where, uh, you have basically sent a battery operator out to go invent the well.

Um, get rid of the liquids that are kind of plugging it and we're sort of back in operation.

So not only do you have lost production opportunity or set, you also have a venting problem set.

So what the team did is actually just figure out how they could put a reciprocating pump on the well head and then use it with a bit of AI.

And go out and sort of venting it, be able to capture the, the, the, the, the product.

But also put a bit of a well optimization and AI on the system to sort of be that step kind of prior to artificial lift that you would need, uh, on the, on the well.

So clear problem set, clear opportunity set, little bit of technology, little bit of AI, bringing production up in decreasing emissions.

It's turned into a bit of a bit of a success that one.

So that one's doing really well.

Is that more, uh, is that more, is there some unique hardware there or is it purely just a, a combined solution of off the shelf type stuff?

Off the shelf pump that hadn't really been used for blowdowns or that up application.

Okay.

But then like on the AI of the well optimization of like, how do you have, you know, how, how can you bring the well to, you know, peak production, if you will, prior to a step for artificial lift.

So, yeah.

And that's I think one of the areas that we really plan is a lot of the, you either get the, you know, AI masterminds in Silicon Valley who have no idea how our industry works.

And then they come in and are like, well, just give us your data and we'll solve the problem for you.

And it's like, okay, yeah, that's going to work.

And then the same, I got a little secret for you.

Flush recovery has nothing to do with the toilet.

And they're like, what?

And then maybe one of this a bit of a fan favorite is actually a team.

When you make beer, you take your wheat in your hops and you ferment it and you vent the CO2 and then you go buy food grade CO2 and you carbonate the beer.

The team just took essentially vapor recovery unit from the oil and gas industry, modularized it and put it on a brewery in Calgary where now they have.

And food grade CO2 is actually becoming increasingly expensive.

So it's actually a emissions reduction play that works without a carbon tax and actually makes you money while you while you drink beer and you taste the difference.

You can't taste the difference. It's food grade.

It's actually a higher grade of pure CO2 than actually the, the food grade CO2 that they've done is testing on it's like 99's like 59 CO2.

Oh, no way.

Yeah, I like that.

So that's another one.

Actually another one that's actually working out really well because in the oil sands, you know, these are massive facilities that are producing, you know, sometimes up to half a million barrels a day at a one facility.

And so they're little cities.

And what they realize in this world of absolute, you know, the grid in every jurisdiction kind of being about to fry is they figured out.

They figured out that in grid is the most likely place for a power line to actually go down is where they connect with the spices.

And so they came up with a smart monitoring technology that they can insert onto these places that will do predictive maintenance to not only tell you where it's failed, but also when it's going to fail.

So they've now now got a paid pilot with a large oil sands company to be deploying this grid and power system on it.

And then their next act is going to be with the municipality in Canada as we all look at our electricity bills going up and coming to this city, I think I think it could be a good candidate for for grid and grid and power reliability.

Yeah, we've not been poking a few said here.

So have I told you my grid stability story.

So my dad is the guy that when a new technology comes out, he's the first adopter.

He buys the first thing.

But then he never upgrades.

He just, you know, we probably still have the first VCR ever made in America and he bought it and all this.

So one day he's, you know, I'm talking to him and he's like, Hey, I got solar panels for the house.

You know, I put them out on the vacant lot.

I'm like, Dad, how much of that cost you to give man a hundred and twenty five thousand dollars.

But I'll never have to buy electricity again.

I go, did you do some math on this?

And he goes, yeah, it's a 12.3 year payback.

And I go, you're freaking 80.

I mean, I want you to be here for bail, but you know, I mean, it's like dude, you're 80.

And so anyway, winter storm, Yuri hits and my house is in between the police department, the fire department, the hospital.

So I'm like, man, I'm never going to go down boom lights out and it's freezing cold.

So I show up over to my parents house.

I've got my cat in my cat in the cat carrier, bagging the other arm.

I walk into the den, dad's reading the paper.

He doesn't even move the paper, but he's like 12.3 year payback doesn't sound so bad right about now.

All right, dad.

Yeah.

That's good.

He might add is the opposite on that.

It's if there is a new technology that everyone else has adopted.

He thinks it's, you know, just a fad.

It's a scam.

It's a scam.

Yeah.

I think he, he does have a smartphone now, but he got, he's still on his flip phone up until a few years ago.

Nice.

So how do folks qualify to, to get into this program?

How do big companies get involved?

Give me all the kind of participants.

Yeah.

So, you know, generally, generally speaking, they're sort of emerging professionals that are looking to build their technology skills inside the industry as well as build their network.

You know, they get incredible networking opportunities outside of the corporates with senior executives.

Generally, you know, the corporates do this to sort of build their innovation capacity inside their companies as well as get a front row seat on, you know, where are the emerging technology plays?

Where's value going to be created?

How is the industry looking at some of these things?

So some of the companies will sort of identify their high performers and nominate those individuals for the program.

And some of the companies, which I'd say is becoming more of a, because some companies will get, you know, hundreds of applications for the five seats or ten seats at that company will purchase.

So it'll be a competitive process.

They'll do an application and then we kind of score it and rank it and then have a conversations with the leadership of that company about, you know, who's sort of the best fit for the program.

We do have scholarships available for post-secondary graduate students.

Those in Texas are made available through taxi, the Texas energy exchange, which is a partnership between MIT and all five research universities here in Texas.

And then through in Canada through our sort of post-secondaries as well.

Those are sort of the two two kind of ways that individuals get into the program.

So all this happens in Calgary?

Calgary and Houston.

Calgary and Houston.

So in Calgary, we're based out of the Energy Technology Center.

And then in Houston, we're just down the street here at the cannon.

And so an store.

Yeah.

And so every single event is also hybrid enabled.

So we'll have a speaker in Houston.

We'll have a speaker in Calgary.

And then just with the nature of our industry is you got to get called out to the well site.

So everything's kind of hybrid hybrid enabled as well too.

And also the integrated nature of the North American energy system.

We'll have Calgarians who are in Houston for the week that stay in the city for and then join the Houston cohort.

And then some of the Houstonians will be up in Calgary for meetings and then go out.

So it really builds that kind of the two energy centers bridge and network as well.

And there are translators involved so that the Texans can understand the Canadians and vice versa.

Well, I'd say the energy crowds pretty versatile.

So there's not as much of translators as might be necessarily needed.

Fair enough.

Yeah.

Oil kind of trumps all.

You know the thing I used to do back in the day is anytime I was having negotiate with somebody particularly from the East Coast like New York.

I would just you know make sure I go to the bathroom before the meeting and I've just talked real slow.

And I'd say things like can you explain that to me again and they were just you know after about an hour of that some New York lawyers just frustrated he gives up on everything.

I would be like well that's right kind of you.

All right.

Go back to growing on successes because I cut you off on that.

Well, yeah.

It's as I was mentioning those are my favorite children.

There's ones that range from sort of you know grid and power flexibility production optimizations.

Some really cool CCS tech that's post combined combustion carbon capture technology that some of the stuff that I need to be careful of what I can talk about.

But yeah, there's what it's done is it's emerged some really sharp technologies.

Maybe there's one all kind of clothes on before I know you want to get to the best ideas that didn't work.

Yeah.

Is actually one of them is I think it's a powerful example for how our industry should be thinking about things.

But essentially natural gas processing facilities who've got condensate stabilizers that will measure you know how much condi is coming out of out of well.

Get sort of reported down the pike and those stabilizers are not just changing every minute based upon gas well had gas composition temperature pressure, etc.

They're also running on 1990s skater.

So one of the teams actually figured out a way to optimize the readings as well as the stabilizers themselves through an AI system that can integrate with the skater and increase condensate yields by about 20%.

So you can imagine when you know gas three weeks ago was was was free.

How how excited that would get it so they actually got.

Live of live production data set that we use through our partnerships with data bricks and Hattachi and got live production data set for about half of the Canadian basin.

And was able to now come up with an AI system that can sort of optimize it.

And so I think there's also an evolution of how the industry can think about is the competitive advantage of a company their their data set or is the competitive advantage of a company how quickly they can deploy a technology and how efficiently they can deploy technology and I think there's no evolving.

How can a organization like avatar play in the sort of pre competitive space for these organizations to unearth new technologies and then at the point they're ready to be deployed.

That becomes the sort of competitive space that drives competitive advantage of these of these companies so.

And now they're now they're working on the ethans and and you know the other other other other value add products.

Well, if you know if you if you really step back and say well what's the biggest deal in the energy business in our lifetime.

It was the shell revolution right you know doubled oil production in the US after 40 years of decline tripled gas production change geopolitics lower.

Cost so we can have Amazon vans at our house every day and I mean literally if you drill down to the core of what haven't some dude went man let's shove some baby powder into a source rock.

That's shit sounds good pressure yeah let's see what happens did.

But but I mean to be serious for just second it was literally just suspending convention you know I love you engineers I love my fan base.

But you're wrong circa 2000 I mean you were just wrong about all that stuff so.

I periodically look at the camera just for dramatic effect engineer engineers.

But anyway no but you suspended convention and I mean we did that we're still at only 5 to 10% of the oil in place out.

I mean we got 90% left to go and I think I think suspending convention and the power of AI on that data.

You basically need a CEO that just says okay we're going to stop we're going to stop experimenting fracking rock we're going to frack our own companies.

I mean I think that's almost how you need to be thinking about it so I'm I'm in your camp on what you chose well and a lot of and I think a lot of it too is like.

You know that when things go sideways in our industry they can go really sideways and so for very good reason we have very rigorous.

Safety procedures in place compliance procedures in place which are absolutely necessary you know I often say come from the drilling world.

You know when you're in the middle of a well control incident is the worst possible time to innovate it's you know everybody do their job.

And we got 90 seconds to shut this in right and the challenges is sometimes how do you then maintain that rigorous safety standard that is so necessary for our industry.

Well also creating spaces where you can try new things operate with new thinking look at things from some of the other other perspectives you know and that's what we really tried to say is we don't want the experts.

On production optimization working in our production optimization stream we want them to walk in with almost a child like curiosity of why do we do it that way.

Have you thought about this what about what about this and by looking at it from a kind of unique perspective you can sometimes get some unique ideas and then you empower them with these incredible tools of artificial intelligence and the industrial bite of our industry it's pretty remarkable with these what they what they can come up with.

And you're in it only is going to get better I mean it is the suckiest the technology is going to be right now you know so yes no definitely and then the big question is is so you know I look at the phases of innovation that we've had in the oil and gas industry and you know used to be the oil companies would have this you know large R&D functions you know the big R&D campuses that are right around here as we speak.

And then in the sale revolution it really was there was you know almost like a collective decision by the industry that the right that the IP and the new technology was going to come from the service out of the business.

And what you had was a really almost leaky service out of the business where you'd have a drill crew and a frat crew that would drill for one operator and then walk across the street and get a little bit better and then walk across the street and get a little bit better.

And then about a decade ago we almost made we looked at the returns that the Silicon Silicon Valley was making we got a little jealous and we said why don't we outsource this to a start up and now unfortunately the service out of the businesses is not where once was from a cash flow perspective and and their shareholders are saying you know show us show us the returns.

And so and then I think we've realized you know that there've been a number of great start up successes but if you're trying to invade on a multi billion dollar facility is you know three guys in a garage the right forum and so where's this next wave of innovation going to come from if we're reaching the efficiency plateaus and shale.

Even inside the oil sands one might argue where's this next wave of innovation going to come from and that I don't think has been totally figured out and I think this moment our industry is in where all of a sudden we're the cool kids at the party again.

How are we going to deliver that how are we going to deliver an energy abundant future how are we going to increase production at 50 60 dollar oil.

And what we need is new forums as an industry to empower people to think about things in new ways well maintaining that safety standard that we desperately need on the on the rig.

I do think all the technology that's going to empower that and my whole take on that is I don't know if it's going to be big small I do know it's going to be early adopters.

I mean right you know I mean that's what happened in the show revolution I mean George Mitchell got freaking rich right and after all was going bankrupt.

God bless God bless and I actually I was at a cocktail party and met like his daughters granddaughter or something and I was saying you know I really like you know all the stuff that happened down in Galveston because he spent a lot of money down cleaning Galveston up making it nice.

She goes I sure hope so because that's my freaking inheritance but I think it's early adopters particularly on AI because you know at the end of the day if you think about what the software revolution was it went in and it divided the functionality of an enterprise.

All right you know in the in the real world you had CRM right and we'll do that in Salesforce and you had accounting will do that at an SAP and oil and gas it was like okay well forecast our reserves over here in areas or PhD win or whatever we'll keep all of our well files here in well view we siloed it up.

The true promise of AI is to create that one data source and so the guy who's working on lift when the wells eight years old is going to see that when the driller was drilling it he had to sidetracked twice and so he's going to go ah that's why I'm having problems lifting so I get the screwed up whole or whatever the case may be.

And and I think having that single source of data and using AI tools I think within 18 months we're going to be able to tell the haves and the have nots in this industry.

You're you're already starting to so last thing on this point is so the CEO of ramp the credit cards that you know do this he's actually been tracking AI spend by his clients.

And the clients with the largest AI spend in the top quarter have basically tripled doubled or tripled revenues yeah and the ones in the bottom quarter are flat on revenues so he's starting to see it and I think we're going to see how much of those would be service companies for producers versus kind of other well and that that's he's he's across all industries yeah because he's credit cards for everybody and I my gut is he's probably only got a handful of energy clients I don't have.

I don't have the analogy to be able to look in energy yet to say okay but kind of anecdotally there's some folks out there that are cutting edge using AI doing a lot of machine learning stuff and they are the better performers yeah you know and so I think it's going to be clear cut 18 months because it's interesting to me that I think that especially you know the last kind of 12 months or you know I call it the sort of the myth of an easy energy transition is completely unraveled.

And you know the companies that were showed I'd say you know the most disciplined around their their thinking around you know what the public commentary was in 2020 have been have been kind of rewarded but you know you go back to the previous phase and you actually look at the shale revolution it was you know small juniors essentially that we're able to really push it forward and the majors you know we're slow to the game and ended up having to buy up these companies.

It's at higher multiples once the tech was a little bit more proven out but you've seen so much and I'm wondering if you were a perspective in in the Permian is you've seen so much consolidation like how many of these juniors are left to be these early adopters on this stuff or is it going to be inside one of the companies.

Yeah now that that is interesting because if you if you think about it there probably is a floor or a minimum in terms of how much you can actually spend on AI

and data you've got I mean because at the at the end of the day you probably need some sort of critical mass on your data to just start running because the greatest thing about AI is it you know I'm old enough to remember when we called it statistics but you know the it finds correlation really well I mean you still have to be the subject matter expert and so whether it's causation but you do probably have to have a critical mass of of data to be able to do that so that's

that's an interesting point. Yeah and that's you know getting having in that to me is going to be the is because there's with the consolidation we've seen I'd say on both sides of the North American border is you know is led to a sort of everybody wanting to be second let's let somebody else figure it out and then it will rapidly rapidly adopt it.

And so what I'm trying to figure out is does that next wave of efficiencies and value creation in our industry where we we haven't for a decade we haven't been allowed to really talk about production growth right and so now is the next phase going to come through some AI tech that figures out how to get the next 5% out of the reservoir that's down there or is it going to be some hard tech profit or something along those line that does it.

And is it going to be the company that can figure out that piece of it or is it just going to be the company that figures out how to reduce their off costs even further and I don't know I don't know the answer to that you know my dumb example when I'm out selling AI software just to make the point you know if you always throw out the absurd it usually highlights the point is.

You may find out by utilizing AI and being able to look at all your correlations you may find out that you have 25% more well failures when you have a left handed pumper and it may actually be causation maybe the tools are you know such that it doesn't work but I say something stupid like that because the one thing AI will allow you to do is literally run iterations instantaneously yeah and you get to go.

You can't chase all those rabbit holes so I think everything you just listed out like people that early adopt and start messing with that and playing with that and and and removing convention or suspending belief for just a little bit yeah well and that's one of the one of the spaces we're really trying to play with and through who are or AI partnerships and we're super excited about what we're working on with Clydes will to but it's again how do you give them that sandbox so they can run for those.

It's the iterations and try it without you know blowing up the well head right and that's that's what we need to be thinking about as an industry is how can you use AI to create you know the physical AI systems that are going to be able to allow you to you know rapidly model and come up with those constraints against when we're still operating the world where these processing facilities are still running on skate out right.

And so like it was fascinating to me being in Silicon Valley last week for the GTC conference and there was one individual that came up and said open up a speech and he's standing there and he goes is anybody heard of Nimbus and I'm like oh god like who doesn't know what Nimbus is and then I'm looking around this crowd because and I'm like they actually don't know what Nimbus is.

And I'm like you guys are going to you go into community and you double their electricity rates and see it take all the water they're going to show up at your permitting process and make your life difficult yeah and then the other thing that I thought was fascinating was one of the speakers gets up and he says AI is the first technology in the world that will not have an S curve it will just be exponential.

Oh he's like he thinks that the thesis that he was playing out is that you're all every time you get to where you would think market saturation the ability for the technology to self learn now will create you know more exponential growth but then I was also like yeah but you're going to run out of copper and all these other kind of physical constraints and so and I think that world.

The I think that tech world is going to run into hard well it's a reality that's Peter Thiel's deal is you have the physical world that limits as well as start layering on top of that the limitations by like government and regulation and rules and stuff like that yeah.

Yeah like if you've been following this open cloth it's a little bit a little bit so that was also fascinating as well too.

So if you're not so open clause like gents and long things that's like the next big the biggest AI breakthrough that's ever happened in the sense that opposed to like asking the AI like I want to go on a vacation to Hawaii give me an itinerary and my flights and where we're going to stay and how I'm going to travel an AI I'll give it back to you in 30 seconds open call will then allow you to pay for it you give it access pay for it on your credit card book the hotel put your points on it from your.

Point program pay for the car going actually do that but you can see the cyber concerns that that has because you have to then give it all the passwords so the chief compliance cyber people across the world freaked out and they were like shut this down like get this off our servers do not go.

And so the Friday before GTC conference he flies in gents and long flies and hit top of his top 50 engineers open clause 50 engineers gives them the weekends to solve this and then they come out with.

Nemo open clock on the Monday and he's like look we're going to put the Nvidia stamp on it and we're good all these chief compliance officers are now it's gold standard I was like.

Once you get blacklisted by the chief compliance officer you're never going on that server again and like it was just to be fascinating to see.

Like a bit of a psychology of just like you guys don't understand how this and how you guys don't understand how the physical world works like you guys are going to run into some walls here really quickly and I was joking with one of the open call guys I'm like that's the worst branding in the world like the chief compliance officer he doesn't want an open call he wants a clenched call.

Yeah that's yeah that's that's fascinating to think through you know that the so.

One of the kind of godfathers or creators of venture capital was gotten Barton McMurray and so Barton was he went to rice undergrad in the 50s and then went to work for Sylvania out in Silicon Valley and Sylvania did this thing where you work for us but you get a PhD at.

Stanford in electrical engineering or whatever and so he wound up recruiting a lot of rice folks out to Sylvania to do that program so rice university is small little school in Texas actually had probably a larger than it should impact in Silicon Valley so like.

Bert McMurray Ken Oshman John door who runs Kleiner Perkins is a rice guy you know et cetera it's all Kim but it was fascinating because.

My dad was heading out to Kenny Oshman's sons bar mitzvah or wedding or something like that and he calls and says well we can't go your brother Bobby sick and I was still an undergrad at rice back then and I said well I'll come home and take care of Bobby but you got to bring me Bert McMurray's card and dad goes alright we'll do that so.

Dad walks up to Bert McMurray at this party you're the only reason I'm here because my son's taking care of my other son who's sick and going to get your card and Bert his credit was like hey that's really cool I'm in town for rice board meetings love to meet your son so we we wound up having breakfast a few times one of the fascinating things that I learned from him.

Because we were talking about you know what's it like being a venture capitalist and thinking through he said you know what at the end of the day the engineer can always build what they say they're going to build.

It may cost too much it may take a little longer than it should but we put a man on the moon we can literally solve all these engineering problems your job is to sit there and goes who really cares.

You know is there an ultimate market for this and I was kind of struck with that story here and you tell the the story about avatar in terms of we go create solutions that don't have a market.

Circling back to tell me the coolest thing that tell me the coolest thing that just didn't work I'll give you a few different examples on this one I'll give you my favorite because it was the absolute most ambitious but

what are the so essentially carbon fibers with this like you know masterful magical solution that you know a lighter and make every product of the world more.

You know a better product and these advanced materials but they're really bloody expensive to make and require a huge amount of heat.

And then so one of the teams is like you know it creates a lot of heat is nuclear fusion and we got we got more waste heat than nuclear fusion that we know do it what if we could take the you know I think that four million degrees see or some insane level of heat.

And channel that to create a new market product for and I just absolutely love the enthusiasm the ambitious vision and I was just but then it was just like guys like this is 15 20 20 years out like there's just there's no capital rule we can access in energy that's going to take one on one unproven technology that some it can apply it on a second of sub economic unproven technology and.

Boy did I want that one to work but it didn't go go anywhere and it made me I think because I think that you know your your failures are where you got to learn from right and what I think did learn allowed me to think about is as much as sometimes I do love the big bold ambitious dreams and we need to be pushing yourself forward is where's the space you can really plan.

And a nuclear fusion was that or advanced nuclear combining nuclear fusion and advanced materials is not a space avatar was that was going to be able to play in.

Another one that God did I love is so and I don't it's still I one of the early kind of technologies is we were trying to.

In especially Canada's energy infrastructure there's no cell phone towers right it's you know this vast amount of the Arctic that is really difficult to get reliable communications with but then we have pipelines running through these and every you know four miles or whatever you have a catholic protector that will determine if it's.

Croting or not and so every year you'll send out a big yeah guy to go see if it thought if rusting or not yeah and so the one of the teams is like well why don't we just put a low row and sensor on these every four miles because we can send a low row and signal.

Every four miles and we create a communication network essentially across the Canadian CB walkie talkie.

Essentially and and then startling came out.

And it was like well now we can have you know why are we going to have a slow walkie talkie when we can when we can have you know 100 megabytes a second download and so.

But still cool I like the thought process behind it yeah yeah so yeah that was that was another kind of big big.

The third thing opportunity is is when you fall in love with the solution instead of being obsessed with the problem if your problem is you know low latency communication in no cell phone reception areas.

Then you can fall in love with startling pretty quick and and yet it deployed versus you know we're going to have this new new telecom systems new network system and then just.

Ram ramming forward but that also gets to my one of my foundational principles I think I've I've learned in my life in sort of the ventures and that's you know component corporates look at things to the lens of opportunity cost of you know if I put a dollar over here and I make a dollar 10 and I put a dollar over there and make a dollar 20 and my opportunity cost is 10 cents.

In the world of new technology.

It's really hard to figure out what that 10 cents is going to look like in a in a reasonable measures and so how if you're super passionate about a new idea how do you figure out what you're willing to lose as opposed to how much you're what the opportunity cost is like what I started

Avatar and me and my business partner who is running one in Canada is major banks invest capital markets investment desks.

We're both really passionate about this forum and we're both in a position where we can go year without without a salary and so we said well let's give it at that let's prove ourselves we'll run it for free from the industry for a year to see if the forum forum works.

And you know if we still really wanted to do it and we've been able to turn it into success but when you're looking at a new idea and you're not sure if it's going to work always understand what you're if you still want to do it and you're willing to lose that then you've got an approach where you're nobody's losing more than they can afford to lose and you are operating in a cycle where people are contributing resources contributing ideas into an expanding cycle of co-created resources.

And that to me is the sort of important part and that's one of the things that frustrates me about the venture community is they want their founders to be eating itchy band and broke for five years or 10 years so they can you know have the equity upside in a decade and I think unfortunately there's not a lot of people that can and you're getting I'm absolutely adamant that the founders of our technologies.

Are in a position to nobody loses more than they can afford to lose and nobody putting second mortgage under house you know how do you how do you work in a world where you're passionate about the vision but you're understanding what your lost point is that you can tolerate as opposed to we're in 10 years we're going to have all this equity and I just you just need to sneak through it you know there's needs to be some.

If you want to play in the space of technology growth and equity growth as opposed to just you know investing in state safe stocks and having corporate options you need to have a few different approaches to how you want to look at your upside I think yeah now that's a that's a really good point we used to when I first joined the private equity firm I was with historically they'd played around on the middle of the balance sheet a lot of sub debt with war and some preferred stock and stuff so being so

senior to common equity was like just the big buzzword and and all that and I go we're putting up a hundred million and management put up to we we overspend one well we've wiped out their equity I mean so like and you know a man with a lottery ticket is not necessarily the best CEO for me for me so Kevin how do people get in touch with you

LinkedIn is a common way to me a message you know try and try and reach out to avatar innovations dot energy our program has just started for the year but we've got a well be opening up opportunities to get involved in either our events or pre-register for our 27 27 program

So those are probably the two best ways to to get in get in touch with me cool we'll appreciate you coming on yeah no I keep up the good work I'm super passionate about about Texas and I think you guys have incredible opportunity and I think if in this time frame where we're looking at you know this period of energy dominance if you actually take Canada's energy into the American energy dominance it's North American unstoppable

hey yeah I like it we'll celebrate over Shinerbeer and Poutine sounds good I'll bring the Poutine