Weekly Dose of Optimism #113

Nuclear Capitalism, Building Chips in America, TSMC Arizona, Orion, Argentinian Rent Control

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Hi friends 👋,

Happy Friday and welcome back to our 113th Weekly Dose of Optimism. We hope our readers in the Southeast are safe this morning, as Helene makes its way through the region. As of writing, some 3 million folks are without power and obviously lots of property has been damaged and lives have been upended.

On a lighter note, I turn 30 this weekend. I’ll spare you the 30 lessons for B2B sales I’ve picked up along the way, but wanted to share that writing this newsletter, working with my brother each week, and getting to track all of the cool stuff happening in the world are some of the things I’m most appreciative of as I enter my 30th year.

Let’s get to it.

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(1) International banks express support for nuclear expansion

From World Nuclear News

A group of 14 global financial institutions have expressed their support for the call to action to triple nuclear energy capacity by 2050.

Follow the money. Earlier this week at New York Climate Week, 14 of the world’s largest financial institutions acknowledged the importance of nuclear energy and pledged their financial support for growing the nuclear energy industry. The institutions include Goldman Sachs, Bank of America, Morgan Stanley, Brookfield, and Ares, among others. Heavy hitters.

The full buildout of the nuclear industry won’t be cheap and it won’t be quick. The backing of financial institutions is crucial, as it will allow governments and private companies to finance these high-upfront cost, long-term investments. Over the past couple of years, financial institutions have shifted from reluctance to increased support for nuclear energy projects, recognizing nuclear as a crucial component of the clean energy transition and mirroring the shift in general public sentiment.

Packy tweeted about the news when it broke on Monday, and a lot of the quote tweets made the same point: it’s beautiful that capitalism is going to end up saving the planet.

Before the demand from AI, nuclear didn’t really have a deep-pocketed champion. Utilities are typically bad buyers for nuclear, solar has been booming, and while public support has swung towards nuclear, there hasn’t been a big source of demand to force the issue. With the hyperscalers all scrambling for power, there is now.

Amazon, Microsoft, and other trillion-dollar companies are signaling that they have a practically bottomless bid for nuclear power, which means there’s a business case for the banks to get involved, which means the banks are getting involved. With some luck, we might even be able to use demand to bring nuclear down the cost curve.

Show me the incentives, and I’ll show you a safe, clean baseload power source that just might save the world.

(2) Biden breaks with environmentalists, House Dems on chip bill

Brendan Bordelon for Politico

Breaking with environmental groups and despite objections from House Democratic leaders, President Joe Biden plans to sign a new bill that weakens some environmental requirements on federally funded microchip projects.

Uncle Joe! NGL, kind of forgot my man was still cooking.

Against the will of some top Democratic brass and environmentalists like the Sierra Club, Biden plans to approve a Congressional bill that would weaken some environmental requirements for federally funded microchip projects. The bill, Building Chips in America Act, which already passed the House with bipartisan support, reduces the need for certain projects to undergo reviews under the National Environmental Policy Act (NEPA). More American-made chips and less red tape? Sign me up!

Beyond the obvious wins here, this move from Biden reflects two major trends within government.

1. It’s time to build in America. Chips. Bridges. Nuclear Plants. Houses. Whatever. America needs to start building again, and the government is starting to catch on.

2. Red tape is not going to get in the way. Practical permitting reform is in, NIMBYism is out. The government should be, and can be, capable of making common sense decisions, irregardless of what some bloated regulation says.

It’s been a really bad week for the Sierra Club, which means it’s been a really great week for the rest of us.

(2a) Apple Mobile Processors Are Now Made in America. By TSMC

Tim Culpan for Tim Culpan’s Position

Apple’s A16 SoC, which first debuted two years ago in the iPhone 14 Pro, is currently being manufactured at Phase 1 of TSMC’s Fab 21 in Arizona in small, but significant, numbers, my sources tell me. Volume will ramp up considerably when the second stage of the Phase 1 fab is completed and production is underway, putting the Arizona project on track to hit its target for production in the first-half of 2025.

Speaking of American-made chips, Apple mobile processors are starting to be made in TSMC’s Arizona facility, making them the first chips to be made by TSMC on American soil. As Tim Culpan noted in his coverage, “this is a BFD.” TSMC’s Arizona facility is, in many ways, the marquee project of the CHIPs Act — it’s big, it’s expensive, it’s strategic, and if it works out as planned, will make the CHIPs Act seem like a brilliant piece of legislation. The U.S. will be able to manufacture its most important technologies on U.S. soil, lessen some geopolitical tensions in the South China Sea, and prove that America can, once again, pull of big manufacturing projects (with a little help from our friends)!

The TSMC Arizona project has faced some setbacks over the last couple of years: shortages of skilled labor, higher-than-expected construction costs and production delays. But with this latest news, things seem to be back on track and production is scheduled to really start to ramp up in the first half of next year.

What a beautiful sight it will be to see top-of-the-line, American-fab’d chips coming off the line.

(3) Introducing Orion, Our First True Augmented Reality Glasses

From Meta

Orion combines the look and feel of a regular pair of glasses with the immersive capabilities of augmented reality – and it’s the result of breakthrough inventions in virtually every field of modern computing.

Some of those American-made chips may also make their way into Meta’s new Orion product one day. The company unveiled Orion earlier this week, claiming it is the most advanced pair of AR glasses ever made. And that’s tough to argue with.

• Design: The glasses are quite sleek, normal-sized and have transparent lenses for all-day wearing. And you barely look like a goofball with them on.

• AR Display: Holographic displays overlay 2D and 3D content onto the physical world.

• AI Assistance: Orion’s AI takes in context from the physical world, such as what’s in your fridge, and can surface AI-driven content like “suggested recipes” within the display.

• Communication: You can take make calls, video calls, and text all from your glasses, in a way that’s (unsurpisingly) deeply integrated with Meta’s communication apps.

Orion is not available to the general population, but is being tested on Meta employees and some select audiences. Whatever Meta eventually brings to market will certainly incorporate many of the features from Orion and, based on R&D efforts over the coming years, some not-yet released features.

It’s very fun to see this long-term bet starting to pay off. Zuck got lambasted for his Reality Labs spend when the market went south a couple of years ago, but he and Meta have been executing a plan that he laid out in conversations with Lex Fridman (here and here). Essentially, make a VR headset and make glasses, and over time, pull more of the stuff from the VR headset into the glasses. Sprinkle in some AI. At some point, you have very wearable devices that enhance the world around you. Orion seems to be a big step on that progression.

Crazy thought…but what if this Zuck guy was just right this whole time?

(4) Filming a Supersonic Test Plane (Boom Supersonic)

Jason Carman for S3

Blake Scholl, the CEO of Boom Supersonic, studied computer science and built a startup to make barcode scanning games. That taught him a lesson: any startup is hard, you might as well do something meaningful. So in 2014, he studied: aerospace engineering, math, physics, and then he just… started a supersonic plane company.

At the time, he wrote a short essay that he recently shared on why: I feel the need, the need for speed.

Ten years later, Jason Carman beautifully captured the a test flight of Boom’s supersonic test plane, XB-1. In this flight, it successfully reached Mach 0.6, and the plan is to speed up to Mach 1 by the end of the year.

Turns out, if you’re really smart and work hard enough, you can just do things, up to and including making planes fly faster than sound.

(5) Argentina Scrapped Its Rent Controls. Now the Market Is Thriving.

Ryan Dubé for The Wall Street Journal

The Argentine capital is undergoing a rental-market boom. Landlords are rushing to put their properties back on the market, with Buenos Aires rental supplies increasing by over 170%. While rents are still up in nominal terms, many renters are getting better deals than ever, with a 40% decline in the real price of rental properties when adjusted for inflation since last October.

A quick follow up from a story we covered back in mid-August. Argentinian President Javier Milei’s plan to bust rental inflation by scrapping rent control is really starting to work. Back in August, we noted that rental supply in Buenos Aires had jumped nearly 200% in the eight months after rent controls were banned. This week, the WSJ reported that supply is up 170% and that rental prices have dropped 40% since last October. 40%!

Turns out that by removing artificial controls on rent, supply goes up, and price goes down. It doesn’t take a former economics professor to figure out how that works. But it does take a former economics professor that is serving as president of a country in crisis, to take the courageous steps to implement a policy like this. Certainly landlords will lose some money and rents on some tenants will go up, but on the whole, the countries rental market will normalize. That, at a national level, is a major win.

¡Control de alquileres…AFUERA!

P.S. Milei addressed the UN General Assembly this week at the Summit of the Future, and he… did not hold back. Give it a watch:

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Have a great weekend y’all.

Thanks to Plaid for sponsoring! We’ll be back in your inbox on Tuesday.

Thanks for reading,

Packy + Dan