Startup Series: Soluna
Today's guest is John Belizaire, CEO of Soluna.
Soluna is the leading developer of green data centers for batchable computing, powered by wasted renewable energy. Soluna's scalable, on-demand data centers buy every excess megawatt from renewable energy projects, increasing project revenue while eliminating wasted energy. Implementing Soluna data centers is a low-risk, low-friction process due to the company's four pillars of expertise: Project development, energy markets, project finance, and computing technology. Soluna has molded this unique expertise into a proven project finance structure and revenue-generating solution.
John is a versatile CEO and serial entrepreneur who has successfully founded and scaled multiple technology companies over a 20-year career. Before Soluna, John was the founder and CEO of FirstBest, a transformative insurance software company acquired by Guidewire Software, and Theory Center, an e-commerce software company acquired by BEA Systems.
In this episode, John explains Soluna's mission, approach, and the problem the startup is setting out to solve. He outlines why renewable energy can be inaccessible and the future of a connected energy grid in the clean future. We also dive into Soluna's competitors, customer base, and recent acquisition. It was great to sit down with John and learn more about Soluna.
Enjoy the show!
You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded November 30th, 2021
In Today's episode, we cover:
An overview of Soluna and how the company was founded
John's climate journey from insurance to climate change
Wind farm infrastructure and why grid failures have made their energy inaccessible
Where the company is at Today and the portfolio of customers they source their energy from
Why Soluna focuses on power plants in distress and the model can't be translated to plants turning healthy profits
The sectors Soluna competes in and whether transmission and batteries encroach on Soluna's customer base
Soluna's recent capital raise and acquisition by MTI
The future of grids v microgrids and how that will play out as we transition to more sustainable sources of energy
The narrative around cryptocurrency and the threat it poses to the climate
Links to topics discussed in this episode:
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Hello, everyone. This is Jason Jacobs and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guest is John Belizaire, CEO of Soluna Computing. Soluna build, owns and operates modular data centers that eliminate wasted energy and deliver revenue to renewable energy producers. Computing is a better battery and Soluna's data centers convert wasted green energy into global computing resources for batchable compute intensive applications like Bitcoin mining, AI, machine learning and scientific computing.
Now, I was excited for this one, one, because John is an old friend, we were in the same CEO forum back when I used to be a CEO. But more importantly, John is working at a really interesting intersection of renewable energy and high performance computing. We have a great discussion in this episode about the grid, transmission, batteries, different energy sources that power high performance computing and other bandwidth intensive applications. And we also talk about what it takes to get more of that energy to be green, what's been holding it back, and Soluna's unique approach. We talk about the origin story of the company, we talk about John's journey that led him to the CEO role, and why and how he came to be that he ended up where he is. And of course, we talk about Soluna's long vision, their progress to date, and, uh, some of the things that they're working on, but also some of the things that externally could change to get all of this stuff flowing faster with a clean energy transition. John, welcome to the show.
John Belizaire: Nice to be here, Jason. I'm glad you finally invited me, you know, I've been dreaming about being on this show.
Jason Jacobs: Wow. I mean, there might have been a guilt trip here and there, but no, it, it is a big thrill to have you on. And, and there's no way that listeners would know this, but you and I have some history, we were in the same CEO forum together for my last company and, and your last company, not the one you're doing now. But you, yeah, you saw me in some, some rough days.
John Belizaire: Yeah, that's the whole idea, you know, we go to that forum and we cry on each other's shoulders. We're like, you have this problem too? [laughs] It's a fabulous thing, that's why I always tell CEOs to do the forums because, you know, you realize you're not the only one, you know, fighting the good fight and struggling.
Jason Jacobs: Well, although I know you well, I don't know Soluna super well. And definitely excited to learn more about it. And it's super relevant to the things that we care about on the show, so also timely. But maybe for benefit of me and for listeners, just take it from the top, what is the Soluna?
John Belizaire: Absolutely. Soluna is in the business of helping to increase the potential of renewable energy, really unlock the potential of renewable energy by solving a unknown problem. Most people don't know that a number of the renewable energy plants out there as they get built, they start out, you know, deploying their energy to the grid and then eventually there is a problem where the grid can't take on all of that energy. And the grid asks these power plants to shut down or to curtail themselves, which basically means to reduce the amount of output. And so a lot of that green energy goes wasted and it puts a tremendous amount of pressure on the power plant operators and the owners of these assets financially and it makes it challenging for them to grow their asset base.
What we do is we build onsite, scalable and modular data centers that essentially absorb that wasted energy and convert it to compute intensive applications. Think of a large network of these data centers spread around the world connected to renewable energy plants turning their wasted energy into a large computing cloud essentially, for things like artificial intelligence, machine learning, cryptocurrency mining. Anything that's compute intensive that can be paused, we like to call it batchable computing, is what our facilities support, which allows us to build these very flexible facilities that can ramp up and ramp down to the output of the wind farm.
Jason Jacobs: Got it. And ho- how does one go from insurance to this?
John Belizaire: [laughs] Very good question. One of the things I've learned about myself-
Jason Jacobs: People ask me that all the time, they're like, "Weren't you like a fitness app?"
John Belizaire: [laughs].
Jason Jacobs: "[inaudible 00:06:18] What are you doing working in climate change?"
John Belizaire: So the short answer is, I think I'm attracted to hard problems and I like going from industry to industry, unlike most CEOs who sort of double down and become really super, super expert, like, you know, I'm focused on marketing automation technology or insurance Tech, I really go after big problems that need to be solved. But truth be told, in this particular case, I really was helping a- an old friend, much like you and I are. An old friend of mine was at a PE firm that had a big, renewable energy project in Morocco that had this very problem, the energy was stranded, they needed a way to monetize the power while the grid was making its way to that location.
And so we originally started out as a developer to building the power plant and the computing facility to sort of essentially monetize the power until we can connect the power plant into the grid. And this happens a lot actually in even very large developing countries, you have huge projects on a big pipeline or a big line, if you will, to get their power plant connected to the grid and they have no way of monetizing the power. So we built this whole business around vertical integration, renewable energy plus computing. And then when the grid comes, you put the power to the grid, and what we realized that, in our case, when the grid did come, we started designing this power plant and it became very clear that the computing could become this almost demand response or battery like technology for the power plant. And we were able to sell our power to off takers and large renewable ene- energy agencies there.
And so we thought to ourselves, I wonder if anybody else has this problem. But you know, Jason, one of the things that I've also realized in working on that company, going to the continent and learning about renewable energy from zero, knowing nothing, I like to always start every conversation with, just so you know, I'm not a power guy [laughs], I'm a software guy, is I learned that power is one of the most ubiquitous, people take it for granted, but it's one of the most ubiquitous aspects of our planet, it's everywhere, it is the catalyzer for economic growth in just about every country. And so I would go to these countries because of our project, we would travel around the continent to different countries, these countries have amazing resources that can be used to generate power to drive their economy, but there's, there's no investor that's going to come in there.
And part of the problem is the economy isn't big enough, it's kind of like the chicken and egg, the economy isn't big enough to support building a big power plant, and so you won't build one there, but if you could build one where you can deploy all of the capital, build a plant of a certain size, and put this computing capability next to it as a absorber, if you will, to balance your revenue, put some of the power to the grid and then expand the amount of power you put to the grid as the economy grows, this could actually open up entire economies in those countries and deliver much more firm, stable power to these countries, because a lot of these places are honestly dark.
Billions of people don't have stable power and we're excited about what we're doing because this would unlock something like that. And that's really got ... what got me excited about being in the energy space, a large, you know, market, a large industry, small community, lots of potential to bring innovation. And that's what got me to insurance, [laughs] and tha- that seems to be a recurring theme for me.
Jason Jacobs: And what is the Soluna origin story? When did it come about? Why did it come about? How did it come about?
John Belizaire: So we started by four years ago. As I mentioned, my good friend, Michael Toporek, who's now the CEO of our parent company, started a renewable energy development company in a region of Morocco called Dhakla, it's southern part of the country, it's probably one of the best wind areas of the world, it's actually sometimes referred to as the, you know, kite surfing capital of the world. Literally, when I go to the airport there, there's two types of people, there's renewable energy people, some agribusiness men and women, and kite surfers, like world renowned Olympic [laughs] professionals that go down there to practice their skills because the wind is just so like incredible.
In fact, it has a name, it's called the Harmattan Wind, and it goes all the way down through Southern Morocco, down into Western Sahara, down into, you know, the sort of northern part of the continent. And it flows at sort of offshore speeds. So when we land there, I mean, the wind is blowing so crazily it's, it's hard to sort of film a video and say, hey, I landed in Dhakla [laughs], because the wind is so fierce.
So we had a wind fa-, they had a wind farm there that could generate up to 900 megawatts of power, and there was no grid. What do you do with a wind project that has 900 megawatts of capability? So they started doing some different sort of pilot projects, things they could do, maybe do some desalt in the area, that sort of thing, but nothing was ultimately scaled or big enough to support that size. And a few years into the life of the company, like, the renewable energy development company had lots of other projects, they just had this one wind project that was stranded, but they had, you know, hydro, solar all around the country.
Jason Jacobs: Why'd they build so big if they [crosstalk 00:11:42] didn't know what to do with the wind?
John Belizaire: The funny thing is the original founder of the company, the development company that they partnered with, so the PE firm owned a development company that partnered with this smaller firm that was actually started by these Germans, and one of our colleagues, Larbi Loudiyi, who heads up energy for us, he was the founder of that company. Prior to that, he was in France and he was doing biomass and all sorts of renewable energy consulting, and one of his clients, [Altis 00:12:09], decided that they wanted to expand beyond Germany into other parts of the continent to do renewable energy projects, and he says, "Could you help us?"
And while Larbi wanted to leave France and go back to Morocco, so he pulled up a wind map [laughs] and he says, "Where's the best wind in that country?" And he found out that it was down there. And it just so happened that the country had just announced that they were gonna expand their grid to that area, so he decided to go prospect and built this renewable energy company to go build a 600 megawatt project in that location. So 10 years later, that's how long it took him to get to the point where he can partner with, with this energy company that was owned by the PE firm, the grid still wasn't there. It took them that long to get the international funding they needed to get it there, and so the project was still stranded and they partnered with these folks to try to figure out how to develop it. And by that time, wind turbine technology and renewable energy store, all of that stuff had advanced so much that the same site could produce that much more power [laughs].
And when we started doing the development, I think the original plan show sort of like, I don't know, like three to four megawatt turbines, now they were pitching us five to 10 megawatt turbines to be put on that location, really, really tall turbines that were coming off the new GE lines, and the Vestas lines, and so forth. So technology just advanced so significantly. And the cost, we could get much bigger turbines for the same price that he was, he was offered 10 years prior. So it's pretty fascinating how quickly technology has evolved in that space, which is why this problem has become such a, a big issue.
But anyway, as they figured out that, you know, one solution, which came from one of their LPs I believe, they said, "You guys should look at data centers, that might be a way for you to monetize the power. And more specifically, you might look at, you know, Bitcoin mining because that uses a lot of energy." And so that started an 18 month, give or take is what I understand it, research exercise where they studied the space, they talked about to just about everyone in the space from financiers, to miners, all this kind of stuff. And they thought, hey, what we should do is combine this project with a large Bitcoin mine or some sort of intensive computing.
And once they did that, then it was no longer a renewable energy project, there was a technology project and they needed a CEO for that. And I was just in between things, I had just sold my last insurtech company, I was reading a lot of books by the pool, so I met with Michael who's sort of a ... not just a friend, but a mentor of mine, he said, Did you sign anything yet?" Because I was showing him different opportunities that I was considering. And I said, "No. Why?" He says, "Well, you should come into my office I got this project you should look at." And I said, "What is, what is it about?" You just do ... You know, his company owns mostly industrial companies, you know.
And he said, "Well, it has something to do with renewables and blockchain." The only part I heard in that sentence was blockchain, oh, blockchain, yeah, I know something about that. I've heard about that. And so I go in and I try to figure out a way not to do it. I'm like, I'm just gonna go in and say, look, this isn't a good fit for me. And well, as you can see, Jason, four years later [laughs], I'm still at it. I came onboard, figured out how to do this, learned about renewable energy, renewable energy finance structure, hired a team, brought on my longtime friend Dipul Patel to be our CTO, and we started, you know, working on the Moroccan project.
And then about a year and a half ago we had this breakthrough pivot, which is, why don't we just take the computing to go do this all over the world? Building energy projects is really, really hard. It takes a long time, there's a lot of things you have to do to develop the project and all of the permits and everything, it just takes time. But computing can be done now, it can be done anywhere, and this type of computing can be done pretty much anywhere in the world. So once we started doing that and talking to IPPs and understanding how prevalent this problem was, it became clear to us that this was potentially a real opportunity.
So we just focused on it during the pandemic and we got a lot of IPPs calling us or returning our calls rather. And believe it or not, we actually got GE to give us a GPS location from where [laughs], where in the US this was a real big pain point, you know, and it says, go there, that's where you'll, you'll find people struggling with this. And so we did and we built a pipeline of projects, and that's how we got here.
Jason Jacobs: Got it. And when you say renewables, do you really mean wind?
John Belizaire: Good question. We look at wind, solar and hydro. We haven't seen a lot of geothermal issues yet, but you know, anything that is intermittent power sources is game for us. Right now we do about one, something we call a curtailment assessment. So when an IPP wants to talk to us or a big infrastructure fund that has an asset that's troubled, we put them through this process, it's really a service we provide actually for free. And we'll look at their asset, we'll make an assessment, we'll look at the data for about four years, and we'll give them a proposal that essentially converts their lost revenue into positive revenue and presents a structure, a solution, and a actual project plan where we'll build the facility and it, it shows them sort of, you know, how much we can absorb of their power.
For example, there's 150 megawatt wind farm that we talked to and they went from zero to 500% increase in curtailment. And so suddenly, they just had lo- lots of wasted energy, it was putting a lot of pressure on them. They were not able to monetize their production tax credits, which is this whole tax system that incentivizes renewable energy development. But you have to produce the power and put it to the grid and someone has to consume it other than yourself, and so we presented them a proposal that shows, hey, if we put 50 megawatts of, of data center here, you know, we'll eat half of your power, if we put 75 megawatts we'll consume 85% of your power, we put 100 megawatts we'll consume pretty much virtually eat all the power. And here's how much additional revenue you- you'll make, here's the PTCS we'll unlock for you. It's a very compelling proposal.
And so that's one of our flagship products that we're building ... projects we're building out right now, it's called Dorothy, and we're going to be bringing that live here the early part of 22. So there's lots of, you know, excitement in our team because we're, we're sort of bringing this solution to bear and it's proving very helpful. And now, since we've announced this week this curtailment assessment sort of available to everyone, we do about one of them a week. Folks are reaching out to us and literally going to our website and scheduling a call and, you know, introducing us to their assets. So this is, this is very exciting for us right now.
Jason Jacobs: So I'm gonna try to parrot back what I think I heard just to test my understanding level here. So basically, with intermittent renewable energy, whether it's the sun only shining at certain times a day, or the wind only blowing at, at certain times a day or in certain seasons, that there's a certain amount of power that's produced, but until storage capacity gets better and bigger and cheaper, then realistically you can only hold so much of it, meaning that it can cause problems if you hold too much, so you need to stop holding it. And that's all lost dollars, which then impacts profitability and health of the plant.
So you come in and you say, well, we can take some of that excess that would otherwise be wasted and we can put it to use for high performance computing, whether it be crypto mining or AI machine learning. And you started out trying to do the whole shebang yourself, both the project development and the putting it to use, and you realize that you could just pull out the putting it to use part and then go to other project developers and then put it to use with them. And I think, and I guess this is a question that it's a rev share where if you put it to use, then maybe it's a split and you take a piece of it and they get a cut, and then it's all incremental revenue for them where it otherwise would have just been a loss.
John Belizaire: Yeah, everything you've described is perfectly true. It doesn't even have to involve a battery, because not every asset has batteries. You know, it's really about the fact that there's, you know, not enough demand for the power on the grid and the grid isn't flexible in that it can't just ramp up demand for that power. So we bring demand to the project, to the asset and we monetize that otherwise wasted energy, meaning we buy it at a cost and then we convert that to a raw material for us, right, an input costs for us into our computing business. And we, we provide that computing on a global basis is really ... I like to say we, we enable cheap, renewable energy on a local basis and deliver green, cheap computing on a global basis. And that's really the approach that we take.
Jason Jacobs: And in terms of providing that demand, what form is that taking today? So what are the different types of demand that you're providing? And how does that break down portfolio wise in terms of how much of each you're actually deploying?
John Belizaire: So we primarily have three or four spinning assets right now, about 50 megawatts, and they're drawing from hydro plants and then we have several projects that are in the pipeline, I just talked about the wind project, we have a couple of solar projects after that. We have close to 300 plus megawatts of projects in our pipeline that cross the spectrum in the US and abroad. And today, we primarily use that raw material, that low cost energy to drive a crypto computing focused business, and the latter part of next year we intend to expand it to HPC business and go into other markets like that.
We spent about six months talking to data scientists. You know, when we look at sort of the solution that we're delivering to the market, on the power side, you know, I am a power plant owner and I have this curtailment problem, Soluna solves that for me. As a data scientist, what we're hearing talking to people, and I've learned this in my past experiences, make sure you go talk to the pain point holders first, make sure that this would be a compelling solution to them. And what we're hearing is, please provide me with more green computing, because there's this whole ethos now around making sure that data scientists that are building the giant models and all this modeling isn't destroying the planet. And so they are compelled by the concept of a data center that houses their compute is making possible the increase in the percentage of renewable energy in the world. And so more computing that I can feel good about is the solution for them, and they can get that from Soluna as well. So our long term vision is to do a, a broad spectrum of computing through our facilities.
Jason Jacobs: And you mentioned initially that, I think I heard this, if I didn't correct me, but that you look for plants that are in distress. Why is that? Why couldn't this also be just as valuable to plants that are turning healthy profits?
John Belizaire: You're absolutely right. Actually, what we would like to see, Jason, is ... Well, first of all, the answer to your question is it works for all plants. We've seen plants that aren't necessarily in distress. So like I said, we're doing these once a week, and what we've noticed is a pattern, we're starting to see people reach out to us where they want to have our data center optimize the revenue of the plant, not necessarily sort of take them from red to green, but just improve the mixture of the revenue and keep them out of negative pricing zones.
But what's more interesting is very, very large infrastructure, I'm talking about some of, you know, infrastructure funds that are backed by some of, you know, the largest pension funds in the world. And if you can think of the biggest project, they're usually backing it. And what they've come to us and said is, "John, we have more capital than we know what to do with, and we've got to deploy a lot of capital to support renewable energy going forward, that's our mandate. But what we're running into is a challenge where we want to deploy an asset in a location, but we actually can't deploy the capital because when we model out what's going to happen on the grid as we add our resource and more resources get added, you know, there's going to be a depression in the pricing and so forth, and we, we can see it happening. So your computing solution actually feels like it could be like a hedge for us."
"And actually, if we can do that, combine our resource with your computing solution, we could actually build more, we can deploy more capital. Which for us is a great thing, we want to see renewable energy change such that this is how renewable energy gets built. Power plants get built with its own embedded load as a grid scaled demand response solution and computing becomes essentially an alternative or another solution, you know, beyond batteries and transmission."
You know, batteries are a great solution, but they do have a problem, they're a business too and at some point you have to discharge that energy for you to make money, and they have to get to a, a scale level for it to, you know, be deployed globally. And obviously, transmission is also a great solution too for the stranded energy issue, but it takes a long time and has all sorts of challenges. Computing could be a third solution that you could deploy, and we hope that you'll see a mixture of these solutions used throughout the world. And that's why your question is a ... is an excellent one because it's kind of taking us full circle where we wanted to prove to the world that you can do energy and compute, well, now, the energy guys who have the capital and know how to do this are coming to us and saying, I want to do energy and compute [laughs]. And so I think we'll see more vertically integrated projects deployed out there, which would be fabulous because it would increase the percentage of energy that's green on the grid.
Jason Jacobs: So I mean, I would imagine that there's a competitive landscape within compute of combining these two, but it also sounds like, and again, correct me if I'm wrong, but that as storage becomes more prolific and lower costs, that it, it increases the profitability and also just decreases the pain that these plants feel. And then same thing with the grid, because you said, "Holding out for the grid and the grid doesn't come and the grid doesn't come." But if the grid is everywhere, right, then it would also decrease the need for finding alternatives and would decrease the pain. I mean, did I get that right? Do you see things like transmission and batteries as competition? Or what competition do you worry about the most?
John Belizaire: I think we mostly focus our energy on other competing solutions that might be placed behind the meter or on the grid that would compete for the resource that we're developing. We actually see batteries and transmission as complementary, because ultimately, we want the grid to go completely green, we're always going to have a need for the power. And as it goes completely green, the price of power will go down, which is a raw material for us and, and that's all net/net good because we, we ultimately want to see our resource not just behind the meter, but on the grid as a grid level resource that can ramp up and ramp down.
Once you have, you know, large degrees of intermittent resources, the grid wants to have lots of various solutions for balancing its load to generation. So batteries will be one solution. Computing, so actual load that can ramp up very quickly or ramp down very quickly is another solution. And additional transmission will be helpful to that too. So we see those solutions as complementary or we're complementary to them, since they were here first, and we think we'll be net additive. The competition we see is, yeah, things like potentially batteries that have longer duration, but not as much in the near term. What we mostly worry about is other competing solutions that are computing oriented that might be going out to these power plant owners and offering them a solution.
Jason Jacobs: Now these competing solutions, I mean, you mentioned that you're doing it for renewables today, does it need to be renewables or, or could it be just as effective for energy sources that aren't as clean?
John Belizaire: Yeah, I mean, there are other players out there that are going to natural gas plants, legacy coal plants, and saying, you know, they have excess energy and they're offering them solutions. That's not us, our ethos is completely about green. Our mission as a company is to help increase the penetration of green resources. We get approached all the time. In fact, we got approached this week, one of the folks that clicked the button on our website said, "I've got, you know, the biggest asset base in the country and it, it has all sorts of different mixture, and we want to partner with companies because we have lots of excess power sometimes, we want to partner with you guys because we like your brand, what you're about, and I've heard some things about you."
And we said, "Well, we appreciate you reaching out, but we wouldn't do that. We wouldn't partner with you on a non-green resource, that's just not what we do. Do you have any renewable resources?" And they says, "Yeah, well, we do", and we'd like to look at those. And so we're pretty religious about focusing on, on green resources. But the answer to your question is other non-green resources could work, there are other companies out there that are doing some projects related to that, but I don't really see that as innovative. I think that to the extent that there's excess energy, they're absorbing it, but it's not, I like to say, creating additionality, right. That's not helping to bring more green resources to the grid. To some extent, they're subsidizing keeping, you know, legacy power sources on the grid. What we'd like to see is those go away and bring more intermittent and green resources with this balancing effect that we can provide.
Jason Jacobs: And maybe talk a little bit about how the company has been capitalized to date and then the recent transaction with MTI, why that came about, and how that came about.
John Belizaire: Oh, sure. So prior to the acquisition we were primarily backed by private equity, so the firm that owned the power plant also owned our company, and so they had pools of capital that supported us. We had raised about just under $10 million doing development work on the Moroccan project and also doing work on this new venture. And so once we realized that this new venture was going to be something that would grow faster and just a completely different beast, if you will, we broke the two companies up. So we used to be a integrated computing and renewable energy development company, and we broke them up into two companies. The power company is called Harmattan Energy, you know, surprise, surprise, based and focused on the Moroccan project. And Soluna Computing, the company that I run, became focused on this computing solution to help drive renewables.
And we started thinking about these projects, we looked at a pipeline, and we were quickly looking at a pipeline that would need somewhere on the order of $300 to $500 million of capital to build it out, because we build out not small data centers or small, you know, facilities, we build out very large facilities to absorb as much power as possible and provide that support at a, at a grid level, and so it needed a, a lot of capital. And so we started talking to infrastructure funds, infrastructure focused or clean tech focus renewable energy venture capital firms, and SPAXX. Actually, we were approached by a, a number of SPAXX that were driven around an ESG mandate. And then we talked to some public companies that were interested in partnering with us.
And across that spectrum, having completed many conversations, what we realized is access to the capital markets will give us access to more permanent capital, allow us to raise money at a lower cost over time, we're hoping, and give us the capacity we would need to finance these projects. But it would also give us the flexibility to do these infrastructure funds as well, and private equity funds and debt and so forth. Everything that is very similar to a renewable energy project finance, we're just doing that for data centers or these type of data centers. And SPAXX became a real challenge for us. You know, we looked at a, a number of them and our worry was, you know, the capital they say they have, they don't really have [laughs], you've got to do this pipe thing at the end. And, and suddenly, you, you went to the public markets with a very, very high valuation. And while that could be good for the sponsors and for the company, you've got to really grow into that, and we got a little concerned about that construct.
The acquisition really gave us the opportunity to, to start with a small footprint and then really grow from there, figure out how we're gonna execute on some projects. We had already done some projects with this particular partner, MTI, and we enjoyed working with them and it made sense to sort of join forces and go continue to build this enterprise under that umbrella. And the company was so interested and focused on it that in addition to the acquisition and all the constructs related to that, it changed its name to Soluna as well, so MTI is now Soluna Holdings, and Soluna Computing is, is one of the subsidiaries of that holding company. And they're raising capital, they've raised over $50 million dollars, give or take, at the parent company level, and we're raising capital at the private company level as well.
We've attracted the interest of some well known clean tech venture firms that are going to be involved in a company that we're not ano- ... allowed to announce it yet, but it'll be coming out, and they're coming into our projects. And we're also bringing in probably some of the largest, most successful infrastructure funds into our projects as well. And so, I think we made the right decision, it gave us a lot of flexibility and a lot of potential for building out these projects and taking it international. So we're pretty jazzed, Jason.
Jason Jacobs: Awesome. And stepping outside of your Soluna hat for a moment, what do you think the future holds as it relates to the grid versus a decentralized future, micro grids, things like that? How do you think it will play out? And also, how are you incentivized for it to play out as the Soluna CEO?
John Belizaire: So I spend a lot of time opining on the future of the grid. I believe that the grid, unfortunately, is sort of, you know, shackled with this very arcane set of rules and regulations and structure and technology, it's not the picture of innovation. But the last few years have seen just a tremendous increase in the amount of capital and interest. I mean, take MCJ, for example, just amazing amount of, of brain power coming at the problem, how do we get our grid, the global grid system really to become a, a really integrated infrastructure to support the continued growth and fight against the challenges that we have with climate change?
And I think what that's created is a whole pool of innovations. You're definitely going to see improvements on the battery side, we think that, that will ce- certainly come down, the movement toward electric vehicles will accelerate. I feel like we're just, you know, on the cusp of, of a tremendous amount of innovation that will be used. You'll have more intelligence in the grid so we can sense were challenges on the grid may be ahead of time, so you don't have these weird forest fire situations. You'll have the capability to see where we're going to have more demand need as nature generates more renewable energy, let's say, in the middle of Oklahoma the wind just starts blowing all of a sudden and we can spin up new data centers to consume that so we- were not challenged with transmission. I think a lot of the investments around making development of transmission easier will, will certainly help.
And I also think that you're going to see all sorts of AI applications that will improve the efficiency of the grid. And capital, I think we're going to be buried in it, it's already true and it's gonna take a long time for that, that capital hangover to work its way through. But the on the other side, you're just gonna have, um, an amazing, ubiquitous infrastructure around energy.
Decentralized finance is at the heart of that. I spend a lot of time teaching my team these days, Jason, I- I've sort of gone back to like college, you know, teaching [laughs] blockchain and Bitcoin. Here's what this all means, and it all comes back to, you know, building a new type of infrastructure to support a more open, transparent and egalitarian financial services platform for a whole host of new applications we can't even think of. I mean, when you start looking at NFTs and what people's imagination is creating, it's just fascinating to see and you're going to have these data centers that we're building really providing infrastructure to the whole decentralized finance space and, and crypto and digital asset space.
I'm fascinated by how just about every week you're starting to see large institutions invest some of their capital allocation in these types of assets. You know, I was talking to someone just today where they explained to me that the volatility of things like Bitcoin is actually coming down, and I asked why, and he says, "Well, because I think institutions are coming in. You know, it's just changing the whole dynamic of the space." And it reminds me when I started my entrepreneurship career where the internet people sort of scratched their heads, like, is any- ... nobody's going to put their credit card on the line. Like, we're going to shop online, that makes no sense whatsoever. And here we are 22 years later and, you know, companies like Amazon, Apple, these companies have basically created a digital form of retail. And so why shouldn't there be a digital form of money and digital form of finance? It just makes good, logical sense.
And so, you can never underestimate the power of technology, and I think that, that's exactly what's going to happen to the grid. And I use the grid to really talk about just about everything infrastructure and power related is going to see a tremendous amount of innovation. So I mean, to sum it up, I think we're sort of all in a fast moving Tesla right now and there's no turning back, like it's pedal to the metal around all of this stuff.
Jason Jacobs: And when you talked about the energy sources, you talked about how it was green choices only and how if people wanted to use it for anything that wasn't pure, and that's my words and, and not yours, but that, that's, that's against your ethos. I can hear certain elements of the climate movement in my ear as I'm listening to the story about crypto because you're talking about egalitarian, and democratizing, and, and transparency, and, and things like that. But I think what a lot of people see is they see an energy hog that doesn't need to be that way, that's primary use case is speculation. That's not what I personally believe, but I have to ask the question on behalf of that perspective to give you a chance to address it directly.
John Belizaire: Oh, thanks for asking that, I- I've been asked that a few times. I mean, look, with Bitcoin there are two narratives, right? One narrative is, it's a very interesting technology. The underlying technology is what's interesting, blockchain has lots of potential to transform the world, we should invest in that. But the ultimate cryptocurrency, Bitcoin, is also interesting, you know, it's taken a while for it to take off and it's starting to take off. But, you know, on the whole, it's a great technology with just a terrible side effect. You know, it, it has this thing where it's just like using energy in a wasteful way.
You know, there's another narrative which isn't heard very often that I personally believe and that is becoming more prevalent out there, and that is that when you look at the architecture of the technology, the fundamental goal of it was to build a new monetary system, as I said, that was more balanced, open and egalitarian. And it was a way for one to create a monetary system that lots of people in the world find a value. When is a product valuable? A product is valuable when it solves a real problem and it meets a psychological need. And in this case, Bitcoin solves a real problem, it solves problems where you might be living in, in an a, you know, regulatory environment or a sovereign environment where there isn't a lot of trust in that environment and you want to protect your assets.
And that could be assets that are owned by a very small farmer that is doing a great job selling, you know, they cacao to Starbucks and wants to sort of protect, you know, their family's assets over time. And they can now convert those assets into this digital form and pretty much move it anywhere in the world. Not that they may be able to do so, but technically speaking, they can do that and they can have that protection over a long period of time. That's why, today, there are 300 million people plus putting their, their trust in this technology and it's probably one of the best brands in the world as it relates to this space actually.
And the reason it has the value is because the underlying technology is really, really secure. And that security just so happens to be powered by energy. And so if you look at it from that perspective, the energy isn't wasteful at all, it's actually designed to make it really, really hard to attack the system and it's designed to adjust the difficulty of that attack surface to protect the asset as it increases in value. And the economic incentives that are created there are also such that it pushes people to cheaper and cheaper, and lower and lower cost energy sources, which in this case happen to become more and more green. And there's now a whole ethos in the industry also to make sure that those resources are driven around green spaces.
But, you know, if I were to form a parallel, the parallel would be the internet itself, you know, there's a protocol, the Bitcoin, capital B, is a protocol supporting this monetary system, the internet has a protocol that supports the movement of communications. People had lots of questions about what the hell that was and what purpose does it have. Well, it has created some of the, you know, greatest innovations that we've seen in the last two decades. I think we're gonna see the same thing here. And so it's just a question of patience with new technology, it takes time, But eventually, it just surprises you how impressive it is. And we want to make sure it's safe, and that's what these computing facilities do.
Jason Jacobs: Great. And last two questions. One is just, if you could wave your magic wand and change one thing that would most accelerate the progress of Soluna and of the clean energy transition, what would you change and how would you change it?
John Belizaire: Great question. The, the answer to the first question for Soluna is we'd really like to see our cost of capital go down. So if you're an infrastructure fund, if you're, you know, really excited about climate change and you are a capital allocator, our business is a great business to invest in because we're building long term, permanent infrastructure that enhances and unlocks the potential of green energy. So that would be a, a magic wand where some of the, you know, largest infrastructure funds become partners with us, they work with us in a strategic way to help build new assets that integrate our computing solution.
The second question, which is, you know, how do we, you know, bring more to the climate change fight? What I'd like to see is regulation that actually encourages more brainpower that would otherwise go to places like Google or, you know, the big FAANG stocks to actually come into the climate space, you know, start climate boot camps or university almost like a, you know, a apprenticeship sort of going to help bring innovation to accelerate the climate movement. I would think something like an MCJ might be part of that, right? Where people sort of come here and tackle interesting problems and bring their brain power to that. There'd be lots of great data scientists that, that can come to play to do that.
I'd also like to see regulation that supports, you know, incentives and tax credits to build different types of infrastructure than just batteries. Just about every structure bill that I, I see is not innovative at all. Batteries do represent a future, but that's not the only innovation that can help accelerate this problem. So to the extent that there's R&D supporting new frontier type development, I think that would be very beneficial to the fight. Those would be my two top ones.
Jason Jacobs: And last question is just, where do you need help? Who do you want to hear from?
John Belizaire: Oh, yes, I would like to hear from power plant owners. So if you're out there and you folks have assets in the US and beyond, we're doing things in Europe, we're doing things in, in Asia, we also look at the African continent, please give us a call, we would like to see your assets. If you're planning a project and would like to see how we can help you with that, we would like to do that and you can contact us at our website, solunacomputing.com. We'd like to talk to you and help you with our solution, with our computing solution. Curtailment is a big challenge and we aim to bring it to zero.
If you are interested in a new employment opportunity, a new adventure where you're working in the renewable energy space, I can't tell you how many young people I talk to who have set out a plan for themselves, "I want to go do something in the renewable energy space because this climate issue is a big issue, we wa- ... we need to save our planet." Soluna is a great place to be. We've got very challenging problems we're solving on the energy side, on the computing side, we're trying to figure out how to build a entire computing cloud platform, Amazon like, that is more green, and we'd love to see folks come talk to us about that. And we're looking for analysts, people who are smart with data and can do financial structuring, please call us, we've got lots of openings as we grow here. And we're looking for folks just about everywhere in the world. So look us up, we'd love to talk to you.
Jason Jacobs: And John, anything I didn't ask that I should have or any parting words for listeners?
John Belizaire: I'd like to share one thing with listeners, and that is that, you know, the world is changing, technology is moving so quickly, and what Soluna is trying to do is to, is to be a catalyzing company. In fact, we're inspired by women who've done the same. You know, we name our data centers, actually, after famous women scientists like Sophie Wilson who invented the ARM processor, Dorothy Vaughn who was part of the team that helped to get the first ship on the moon. And were inspired because they really opened the door and catalyzed things in the marketplace, and we're trying to do that here in the renewable energy space and it's just a really exciting place to be right now. And so we just like to say to folks out there, if you're concerned about getting out there and just trying to fight the fight and bring innovation to a tough and old industry, don't be perturbed, it's actually quite fun, even though it's challenging. And if you can make any inroads, it can significantly help change the world, and that's what we're trying to do here.
Jason Jacobs: Amazing. Well, John, thanks so much for making the time. Awesome to catch up with an old friend. And wishing you and the Soluna team best of luck in your important work.
John Belizaire: Thank you, Jason. It was a pleasure to be on the show.
Jason Jacobs: Hey, everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co, note, that is .co, not .com. Someday we'll get the .com, but right now, .co. You can also find me on Twitter at JJacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes, the lawyers made me say that. Thank you.
