Bill Gates on AI, Elon Musk & Why 2050 Climate Goals Still Possible
Solving the climate crisis involves transforming almost every aspect of our lives. It's being driven by a new technological revolution, harnessing the power of innovation to reshape the entire industrial process to cut emissions. But embracing green tech requires not just political will, but also financial backing to bring clean solutions to scale and keep global warming from spiraling out of control. On this episode of Leaders with Lacqua Goes Green, Bloomberg's senior executive editor John Fraher, speaks to Microsoft co-founder Bill Gates, who has poured billions into green startups. The climate philanthropist was at a
summit in London for his venture fund, Breakthrough Energy, which has invested in more than 100 companies involved in the energy transition. Bill Gates, thank you for joining us today to talk about technology and leadership in the climate era. So you founded Breakthrough Energy nearly a decade ago to invest in emerging climate technologies across every area of emissions. The idea is to help seed a new generation of green companies that will help us bend the emissions curve towards zero. Nearly a decade into this. What grade would you give Breakthrough Energy's work so far? Well, I'm biased. You know, it's a team that I helped build. I'm really amazed at how far we've come.
The companies we found out and founded, many of them have ideas that, as they're scaled up, can actually let us go green without paying a lot more money so that the theory is is working out better than I expected. And you've obviously, as noted, invested billions in climate companies over the last over the last decade. Which is there a particular company that you are most excited by, a particular project, that particular company that you're most excited about? Well, I could name lots of companies, but the climate problem, you know, it's if you want to get to zero, you don't get to skip buildings or agriculture industry or electricity or transport.
You don't even get to skip planes or boats. You know, you've got to have it all. And that's why it's so many different companies is that and you've got to change those industrial processes. They're, you know, some things like
fission or fusion, which will make a huge contribution. There's a thing called geologic hydrogen that if that pans out, that makes a big contribution. But, you know, even a pretty basic thing, like a new window that is so amazing that it doesn't let the heat out in the winter, let the heat in during the summer.
That can save you a lot of money. And because you use less energy, that's very pro climate. We have solar. We have wind we have batteries. But if you could wave a magic wand and summon a new technology into existence that's scalable and cheap. Which one would it be? Well, certainly, if we can make nuclear fission or fusion cheap enough, that's quite magical because you can locate it near to where your electricity is needed and it's completely not weather dependent. Obviously, we don't want to depend on that, so we need to go as fast as we can with wind and solar.
And now, you know, even geothermal looks like it'll make a contribution, have a energy network with all of these, but something that runs 24 hours a day and it's not weather dependent makes a particular contribution that will have to be part of the mix. So it sounds like you feel like we already have all of the technologies that that that we need and that they are pretty much scalable, economically scalable. Well, the technologies when they you know, we have in the lab a lot of good things, but you know, we're taking them out at first they will cost more. So we have to, you know, have policy that helps bring the scale up and and that's what brings the price down over time. So I can see us getting there. But no, we're not we're not there yet.
And the impediments in terms of, okay, can you get permitted can you get connected to the grid? There's a lot of things that very smart people are going to have to stay focused on. But because of these great lab results, I see the possibility that we'll really start to bring emissions down a lot. But what do you see as the biggest bottlenecks to scaling climate tech right now? Is it financial? Is it time? Certainly in 2015 it was that we didn't have. Ideas about how to make steel or cement or any of these emitting things. You know, we we didn't have the breadth of of of tools now that we've made this progress on those. We're going to get bottlenecked on
deployment. You know who funds the early projects? How easy is it to get those permitted? If it's a power generator, can it get connected up to the grid? You know, this is a very physical thing. We're replacing the industrial economy. And so the fact that it's it's hard to move fast, I think that'll that will be the limiting factor from where you sit. Do you see other companies, other, you know, investment firms, do they see the opportunity for returns here? Well, there's many stages in the capital stack, depending on the maturity of the technology.
You know, breakthrough energy has had no difficulty raising funds, philanthropic funds for the early ideas we call fellows venture funds for taking the companies and proving their products out, catalyst funds for funding actual project implementation. Then you get to the big numbers, you know, where you have to build all the solar fields or the the factories. And if you get the cost analysis right where you're you're competitive or you're they can see within a certain period of time the scale up will bring the price down. Then you can access large pools of
capital. So far, we've only seen that in a limited number of areas some wind and solar, some electric vehicles. But you know, for like a green steel plant or a green cement plant, we're just at the start and trying to draw in the the big, big project investors by getting the risk level to a very low level, which is what they require. And when you talk to those other big investors, like which sectors within the green technology economy universe, do you see the most interest? Well, the power generation is a gigantic sector, either regulated or non regulated, you know, turning over the manufacturing base like steel and cement, that's really a gigantic thing, taking both old buildings and new buildings and having them be more efficient and switching electrifying the heating and cooling instead of, say, burning natural gas to heat the house, things like buses, you know, the payback there.
Actually, those products have gotten so mature, you know, they're quite hit, they're clean. That one is about to explode. You know, So across the board, you know, we're turning over the the capital that went into the the old dirty approach. Coming up, Bill Gates on the artificial intelligence boom and why he believes his green benefits will outweigh its emissions. Artificial intelligence has come under scrutiny for its environmental impact. AI's insatiable need for electricity is draining global power grids and threatening the climate goals of big tech companies.
But Bill Gates says the technology will help push forward the energy transition and eventually pay for itself. There's a lot of talk about AI. Where do you see the most useful use cases for specifically when it comes to climate solutions? It helps us model out these systems. And so you can often optimize things and raise your efficiency a lot. The big breakthroughs come when I teach you about material science, like, okay, I can make a solar cell without using silicon or I can grow food very efficiently, you know, in a laboratory using fungi or our or some other approach. So as I gets into the basic science thing that goes beyond just kind of a super smart tuning where you say, say, 10% here or 15% there to helping you with that fundamental design of the green product. Mm hmm. And how concerned should we be about, you know what here talking about energy, the extra energy demand that's going to come from from the boom.
You know, is it worth the extra emissions just for the power that for the intellectual power that I can bring to bear on this? Yeah. So the additional electric demand, you know, from electric cars, as we change that over or electric heat pumps, as we change that over or steel manufacturing, all of those dwarf even this amazing demand for datacenters. Now, there's lots of ways that we're trying to make the computations more efficient, you know, so we're not using as much energy. So the exact path of does it end up being, you know, 3% of electric use or 6% of electric use? You know, it's not going to go above 10%. So, yeah, it's got to fit in. It's got to pay the price. And those tech companies are probably as sensitive to wanting to even pay a bit extra to use green energy of any electrical customers in the country.
So they'll help push the green technologies forward. They're willing to pay somewhat of a premium to get in and be able to say that it's all done without greenhouse gas emission. So I think on balance, when it comes to emissions, AI would pay for itself? Absolutely. Now, speaking of AI you've obviously been in this industry for for a long, long time.
You've seen lots of ups and downs in the tech space. Right now we are seeing, of course, a tidal wave of money going into AI, Nvidia for example, recently became the world's most valuable company, albeit briefly. When you look at market caps like this, do you worry that we're seeing bubble valuations? You know, I'm not a I'm not a buyer and seller of tech stocks, you know, like a daily basis or anything. You know, these multiples aren't as high as they were, say, during the Internet bubble. And the growth is real. I mean, AI is is not pets.com. This is something very, very fundamental.
So I you know, I'm I'm not don't take my view on any particular stock, but the growth potential, you know, there will be some big winners in this space, which is why you see all the leading tech companies, including Microsoft, putting tens of billions of dollars into not just the backend capacity, but re-engineering their applications so that you're you're far more productive. So you think that the excitement that we're seeing in these valuations is fully warranted by the potential, the excitement we're seeing? Absolutely. Any particular stock? I'm not really commenting on. But we're not we're not out of control. We're seeing a fundamental advance as important as any in the history of digital technology.
Another technology that has a lot of excited, excited proponents is carbon capture, I think sort of the base case number that people say to make carbon capture economically viable is 100 tons, a dollar that seems to be getting further and further away from us. When you we you know, when you read what other companies in the sector are saying, are you optimistic that this will be an important part of of the net zero solution? Carbon capture is unlikely to be more than 10% of the solutions. And even to get to that level, we'd have to get well below 00 a tonne. Now, there are companies that, you know, we've funded out there that have the possibility to get, you know, to 50 and below.
But that's kind of the brute force solution that you want to save for the most hard to abate sectors. You know, for most things you want to redesign the process so you're never in. Because any time you say, Oh, let's use carbon capture, of course you have a green premium, you're because you're doing it the old way and you're adding on top of it the non-zero cost of that carbon capture. And so we only want to use that for extremely difficult to abate things. But yes, that that price needs to come
down and I'm optimistic it will. Coming up, Bill Gates on why he's more optimistic today than a decade ago about reversing climate change despite the world falling behind in the race to net zero. In 2015, world leaders committed to reducing global emissions to zero by 2050. It's an ambitious target, but a necessary one to prevent the worst impacts of climate change.
But as emissions and temperatures keep rising, Bill Gates admits the world is falling short of its goals. Although he's not giving up hope. One of your favorite climate writers is Vaclav Smil, and he paints a rather gloomy picture of the climate fight. And when you read, you know his stuff, you know that this sheer gargantuan scale of what we have to achieve here, it just seems very, very, very daunting. A seven fold increase in investment, for example. And he I was reading a recent paper of of his the other day where he concludes by saying a fossil free world, free of fossil fuel by 2050 is highly unlikely. Do you agree with that? We will.
So we need to use fossil fuels. We absolutely have to surprise Vaclav on the upside and nobody understands the history of this stuff better than he does. And of course, if you take the current rate of progress and you just project it out, we fall far, far short of meeting our goals. And so it's fine for people to say, hey, I'll believe this when I see it. I believe that you can make, you know,
efficient energy cheap. I believe that you can change the way we make cement and steel. Now I get I'm lucky I get to see this stuff in its prototype form. And I know that we've got brilliant people who are going to scale it up. And so we have to break the current path. And, you know, emissions have not gone down yet. You know, they're the rate at which
they're going up has gone down. Some rich countries, you know, like the UK, a third of the per person emissions when it was a very coal oriented place and now you know it actually uses almost no coal year round. So it's a third per person. That's the kind of thing we need to do globally to get anywhere near to our goals. So he's not he's careful to say he's not predicting the future, but he says, wow, you're going to have to pull off some pretty unbelievable things that in the history that that has never happened before. So how do you feel about the sort of the current state of the global debates, you know, on on climate over this one, the huge political backlash in parts of the world against net zero? We have all of these concerns about energy security, You know, the optimism that we saw coming out of Paris that we saw towards the end of the last decade seems to be seems to be dissipating. How do you persuade people that this is a fight that can still be won? You know, in 2015, I was not optimistic because somebody was working on the hard problems.
The energy R&D budgets had gone down, the venture investing in climate had gone down. It was completely out of fashion. So I don't know what people are optimistic about then. The fact is we built essentially from scratch, you know, with lots of supporters, a really mindblowing level of innovation against emissions. And, you know, in the last nine years that's gone better than I would have expected. So only now could you even, you know, plausibly be optimistic about the path of emissions.
And someone who said, hey, nobody's ever scaled things up like this, the speed we knew to before, they're welcome to say, hey, I'll believe this when I see it. You know, in the meantime, some people who care about this issue are really out, you know, trying to think, do we need permitting reform? You know, do we find what new ideas haven't we found yet? You know, how do we fund people with those those new ideas? How do we get the costs of these things down? How do we collaborate on a global basis? So we're still not at the point where it's guaranteed or even that it'll it'll be easy. But at least there's a theory of change based on the innovation that you're seeing from over 100 companies here. So the first act of your life, as we all know, was as the hard charging founder of Microsoft. You are now a philanthropist, a technology investor, and a public figure with a very powerful voice. Which skill from that first act in your life is most transferable to your current work as a climate investor? Well, I've always been a student, you know, where I like to read things and learn things. You know, I didn't even want to drop out
of Harvard because I loved, you know, going to lots and lots of classes. I audited a lot more than I was signed up for. But, you know, I saw this unique time. And so I'd say my curiosity about, okay, what is climate, what are the source of emissions? Or from my foundation, you know, why children in Africa die 40 times the rate as they do in other countries, You know, wanting to get to the bottom of those things, wanting to meet the people who are measuring those problems and coming up with solutions. And so the ability to organize innovators and think through with them how we could create breakthrough solutions, that's common to my Microsoft work my, you know, foundation work on disease and now through breakthrough energy, the climate work we're doing and what have you had to learn? Which part of it I've found hardest? I you know, there are things where I say, okay, I'm not going to be, you know, good at the CFO decisions or the you know, so I understand how we we as we built Breakthrough Energy, we have amazing people who bring the full set of skills to advise these companies. You know, I've always built teams that
have the skills that that I'm not bringing to the picture. And what you find is the hardest part of the job. Well, we've we've been pretty successful, so I wouldn't want to complain. You know, I enjoy all the things I get to learn. You know, before I studied climate, I didn't understand cement or steel or, you know, who did what or why it was so cheap. And, you know, every time I meet these people with new ideas, I'm like, wow, you can really do that.
You know, there's one here that grows cotton, you know, without cotton plants. And I'm like, I'm just stunned, you know? Give me the numbers. Will it be cheap? You are one of the world's best known leaders in the climate fight. One of the other people sort of most associated with green technologies, of course, is Elon Musk. Do you do you talk to him much these
days? I haven't talked to Elon recently. We were at an event together called the Breakthrough Prize in L.A. and I said hi to him, but now Tesla's a huge contribution to driving the car industry towards electric. And you know, on Tesla, I mean, you know, more than anyone else, Elon Musk, I think has sort of shown that green technology and green solutions can be cool and exciting and worth buying.
Are you are you disappointed that Elon doesn't really seem to talk much about climate these days? He's sort of more interested in talking about culture, wars and other issues? He talks a lot. I hope he'll talk more about climate. You know, he's very, very smart and he's made a contribution within that, you know, area that is is super important. What would you like him to talk about when he talks about climate? What would you like to say? I don't think he he'll listen to anybody telling him what to talk about. So. You know, he's he's unique and he'll talk about whatever he feels like. So you are an avid, avid reader and you yourself have written plenty of books about climate and other issues. Your books aside, what is the one book that you would advise people to read about climate solutions? You know, unfortunately, it's no single book.
Vaclav Smil's book. How the World Really Works, will paint you the framework of what we're dealing with that, you know, people most people don't understand that how important steel and cement are, how complex the electricity supply is, or even the food system. And so I think that's still probably the best starting point.
And we all have to make sacrifices if we're going to be all part of the climate solution. What what is the biggest personal climate sacrifice you've you've had to make in terms of living a more sustainable life? As I say, I'm funding companies, you know, like I buy I fund electric heat pumps, you know, so that people have a lower bill and low cost housing. And because I'm providing the capital for that, you know, I, I offset that against my carbon emissions so that I can get to zero. So that money is not only creating net zero, it's also driving those creating demand for the technologies that will come down in price. So, you know, my carbon footprint is high and that's partly why I'm so avid that we need to, you know, get all sorts of emissions to zero. Well, I was going to ask what is also sort of your climate sacrifice, but also what's your biggest climate vice? Well, flying flying from place to place is is where I'd have my biggest footprint.
Bill Gates, thank you very much for your time today. Thank you.
2024-07-21 08:21
