In Part 3, the conversation turns to the enormous scale of power required to run advanced AI at the level Elon envisions. Dwarkesh Patel and John Collison press Elon on the real-world challenges of building terawatts of electricity generation and why the utility industry is such a major bottleneck. Elon explains why private power plants co-located with data centers may be the only practical solution.

Transcript:

Dwarkesh Patel sought clarification on the scale Elon was describing, confirming that he was talking about terawatts of power. The discussion then moved to the extreme difficulty of actually building that much electricity generation at the speed AI development requires.

Elon Musk: “Yeah, well, all of the United States currently uses only half a terawatt per hour on average. Right. So if you say a terawatt, that would be twice as much electricity as the United States currently consumes. So that’s quite a lot. And can you imagine building that many data centers, that many power plants? It’s like those who have lived in software land don’t realize that they’re about to have a hard lesson in hardware, that it’s actually very difficult to build power plants. And then you don’t just need the power plants, you need all of the electrical equipment, you need the electrical transformers to run the transformers, the AI transformers.”

Elon pointed out that the utility industry moves extremely slowly because it is heavily regulated and “impedance matched to the government.”

Elon Musk: “Now, the utility industry is a very slow industry. They impedance match to the government, to the public utility commission. So they’re very slow because their past has been very slow. So trying to get them to move fast is just like, you know, if you’re trying to do an interconnect agreement… have you ever tried to do an interconnect agreement with a utility at scale? Like with a lot of power?”

Dwarkesh Patel laughed and admitted that, as a podcaster, he had never tried to do an interconnect agreement with a utility.

“Now, the utility industry is a very slow industry. They impedance match to the government, to the public utility commission. So they’re very slow because their past has been very slow. So trying to get them to move fast is just like, you know, if you’re trying to do an interconnect agreement… have you ever tried to do an interconnect agreement with a utility at scale? Like with a lot of power?” – Elon Musk

Elon Musk: “In fact, yeah, they have to do a study for a year. Okay. Like a year later they’ll come back to you with their interconnect study.”

John Collison asked whether companies could simply bypass the utility bottleneck by building their own private power plants right next to the data centers.

Elon Musk: “You can build power plants. Yeah, that’s what we did at xAI for Colossus.”

John Collison followed up, asking why this private-power approach wasn’t being treated as the obvious solution to the utility problems they had been discussing.

Elon Musk: “Right. But it begs the question of where do you get the power plants? Where do you get the power plants from? I mean the power plant makers.”

John Collison summed up the deeper issue: there is currently a massive backlog for gas turbines and power plant equipment in general.

Elon highlights that even if companies build their own power plants, they still face major constraints in actually obtaining the equipment. In Part 4, the discussion continues with more on the practical challenges of scaling AI infrastructure at this level.