#31 - Three Breakthroughs: Why Are SMRs (Small Modular Reactors) a Thing?

Biology and batteries, small nuclear reactors, and the next level of AI. My name is Sam, your guide, and welcome back to the show.

Kind of read through some of the, the work. What caught my eye is that they actually, um, took a lot of inspiration from biology.

And some of the things going on and kind of trying to make, um, the equivalent of a Gigafactory. It's a big deal. There's some really promising stuff. We're investors in some, we're wannabe investors in others.

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Hi, welcome to Alumni Ventures and our Tech Optimist podcast. On the show, 3 Breakthroughs, we look at some of the most interesting new developments in the area of innovation, technology, and science, particularly with an eye of, you know, areas that we're interested in investing in, understanding better, think have huge potential. I'm Mike Collins, the founder and CEO of Alumni Ventures, and I'm joined by Matt Caspari, who's one of our managing partners in our Menlo office. Hello, Matt.

Hey, Mike. Good to see you.

Okay. Well, you're kicking it off today. What do you got?

Yeah, so I've got a development in battery technology, specifically batteries that are designed for electric Okay. And the development and the breakthroughs are actually inspired by biology, which I thought was kind of interesting. So the study came out recently in this scientific journal called Joule, and the research team behind it, scientists at UC Berkeley, University of Michigan, also working with some industry partners, they designed this new electric aircraft battery And they demonstrated a fourfold increase when compared to conventional batteries in the number of cycles over which you can maintain this critical power-to-energy ratio that's needed for electric airflight.

Which is the key, right? I mean, it's power per weight per, you know, there's 3 or 4 numbers that are just like, why no flying cars? That's the problem, right?

Exactly. Exactly. So it's kind of cool looking at the People involved, one of the lead researchers from UC Berkeley, he's actually a co-founder of a company that we've invested in in the past called Sepion Technologies. So again, we're interested in these battery breakthroughs. This is at a much earlier stage, but really cool and exciting. And as I kind of read through some of the work, what caught my eye is that they actually took a lot of inspiration from biology. Yeah.

Mm-hmm.

So, there was a quote that came out in an article that one of the lead scientists said that biologists use omics. So, this is kind of a broad term for these different fields in biology, genomics, proteomics. And, they use these different techniques to study complex relationships between things like gene expression, DNA structure. And, these battery researchers were inspired by this, so they decided, could we use a similar approach to examine the chemical signatures of the battery's components to figure out where the problems were. And they actually figured out that kind of conventional wisdom was that this key problem that they call power fade was happening in the anode of the battery.

Mm-hmm.

That turned out to be wrong. It actually is on the cathode side. And using these insights, they came up with a new electrolyte, the way they're moving the electrons through the battery. And they were able to put in special salts into this electrolyte. So this was the breakthrough that allowed for this significant increase and actually makes the batteries resistant to corrosion. So exciting. And then they're actually going into actual flight testing is the next big step in 2025. So pretty cool breakthrough.

Yeah, no, that's very cool. You know, and again, we see these Cross-discipline things are, are so important to kind of innovation. And again, you know, looking toward nature, you know, those are two, those are two underlying thing themes that have obviously happened in, you know, pharma and other areas.

I'm here. To provide another footnote for this first breakthrough that Matt has shared with us today. So really quick, I'm gonna break down, you know, how a battery works, right? And Matt brought up some keywords like cathode and anode, and I had no idea what those meant in reference to a battery. So, but cathodes and anodes are essential components in a battery that work together to generate electrical energy through electrochemical reactions. And sort of here's a little bit on how they function, right? So a cathode— cathode is the positive electrode in a battery during discharge. So you know when you take, uh, like a AAA or AA battery or even a D battery, you see that there's a plus or minus on either side of the Duracell battery or Energizer or whatever battery brand you're loyal to, right? I personally have never known what those meant. And you know how in certain things you have to put them in their correct ways? They Correct charges are on the correct side within whatever electronic you're putting it in. So since the cathode is a positive electrode in the battery, it receives electrons from the electric from the external circuit and undergoes reduction, meaning it gains electrons. Typically, it's made of metallic oxides like lithium cobalt oxide or lithium iron phosphate, and during discharge, positive ions or cations. Move towards the cathode through the electrolyte. We're gonna get to the electrolyte here in a second. But so anodes, the anode is the negative electrode in a battery during discharge. It releases electrons to the external circuit and undergoes oxidization, meaning it loses electrons, often made of materials like graphite or silicon in lithium-ion batteries. During discharge, it releases electrons and ions. So how they work together, right? During discharge, the anode, the negative, releases electrons to the external circuit. Those electrons flow through the connected device, providing electrical power. The electrons then enter the cathode, where they participate in the reduction reaction. Simultaneously, positive ions move from the anode to the cathode through the electrolyte. So now that we all sort of understand in general how batteries work, The paper that Matt was talking about, published by Joule, is public and it's out there on the website. We'll provide a link in the show notes. But they provided some highlights and summary that you can get for free before you purchase the paper and read that for yourself. So I'm going to share those. Some highlights: mixed salt, locally super concentrated electrolytes enable high power and low fade. Omics analysis reveals structure, function, and evolution of battery interfaces. Low LIF and high organofluoroethers in CEIs improve performance in Li-NMC811 cells. High-capacity cells tested in realistic missions capturing vertical takeoff and landing. So a little bit on their summary as well for this. Um, omics is a discipline that identifies and quantifies molecular processes that contribute to the form and function of living systems. Here, we translate omics to study battery systems. By employing precision analytical capabilities across chemical space, we delineate the structure, function, and evolution of interfaces when cycling Li-nickel-manganese oxide cells at high power and high voltage with mixed salt locally superconcentrated. super-concentrated electrolytes. Despite differences in their makeup, top-performing electrolytes converged in their cathode-electrolyte interface chemistries, which were unexpectedly enriched with ferrothers and depleted with LIF. The upregulation versus the downregulation. Moreover, these atypical CEIs more effectively suppressed leakage current, cathode corrosion, and cathode fracturing, extending the battery life. All of you scientists out there and all of you biologists that are listening, I hope you understand that a little bit better than I do. I got the general gist, but if you want to read the paper that Matt here is talking about and Matt shared, we'll have a link for it in the show notes. But figured we would share and let's get right back into Mike's breakthrough right after this short break. Don't go anywhere.

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I'm going to stay on the theme of energy. I do think, you know, the You know, with all the talk now with AI and all the innovations happening in healthcare and scientific modeling and those kinds of things, you know, at the end of the day, there's such a strong correlation between a society's energy abilities. You know, when has human progress really leap forward, usually there's a big breakthrough in kind of energy underneath it, right?

Strong correlations to GDP.

Yes, very strong correlations to GDP. And, um, you know, I think a lot of really smart people are viewing that as kind of one of the next big bottlenecks and areas where there needs to be innovation and entrepreneurship and capital and, you know, bringing, bringing together all those key ingredients. And mine today is really about really some of the advancements going on with what are called SMRs, which are small modular reactors. And, you know, we have been following a few of our— a few of these companies that are doing really interesting work in the space. And, you know, we just think it's super exciting. And I think there's a couple of kind of key things to keep in mind, which is, you know, this technology, which is you think of, you know, the big nuclear power plants you drive by, you know, that is 50, 60-year-old technology. The ability now to do Smaller, modern designs. And some of the things going on in kind of trying to make the equivalent of a Gigafactory when it comes to these SMRs, I think is a really exciting thing. You know, and this is something Elon Musk did with battery technology, viewing it as like, hey, if we're going to make you know, a shitload of electronic vehicles, that's going to mean a lot of batteries. And we need to create a modular system that we— is super flexible, that we can mass produce. I think that is the future, right? Yeah. In, in these kind of SMRs where you can, in a central location, make modules, ship them, you know, bolt one on again the size of a shipping container, put it on the back of a data center. Have it powered a medium-sized city with 3 of these things. I think that—

Highly scalable.

Highly scalable, highly redundant. Obviously, when you put something on an assembly line, make it modular, you get huge cost benefits, safety benefits. It's, you know, this bespoke, huge, centralized 1970s approach is not where this industry is anymore.

Yeah, and if you look at the cost overruns and just the— yeah, it's just crazy. It's— yeah, I just think this will be much more capital efficient. Um, yeah, for the world.

And this is— and, and this is going to be a global race. I mean, we can talk about, um, you know, the international race to manufacture chips or AI. You know, the countries, the, the, the communities that Figure out how to put together SMRs and the energy that they can produce, which is orders of magnitude, not a little bit, orders of magnitude more powerful than carbon fuels. So it's a big deal. There's some really promising stuff. We're investors in some. We're want to be investors in others. And so, but we think that this is, this is really where the future of energy lies. It's all of the above for sure. Yeah, but SMR, we need them all. But SMRs definitely have a place in the, in the, in the mix with these small nuclear reactors.

Yeah, super exciting.

All right, that concludes our second breakthrough for this episode. Right after this break, we will be right back.

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As everyone that is current to this podcast knows, I am not a nuclear physicist or a nuclear scientist. So I looked into SMRs, or small modular reactors, that Mike brought up today, and I wanted to define them a little bit and sort of, you know, put out on the table what they actually do. Um, so SMRs are significantly smaller than conventional nuclear power plants with a power capacity of up to 300 megawatts per unit, which is about 1/3 of traditional reactors. They're designed to be factory assembled and transported as units to installation sites, allowing for easier and more efficient construction. I think that's the key thing here, the word modular, right? They are I went to design school, so they are— we learned a lot about modular technology and modular building and engineering, and it makes things a lot more personalized per customer and, you know, per person who would be using said technology. So SMRs offer flexible power generation for a wider range of users and applications. They can be deployed as single or multi-module plants and can be combined with other energy sources, including renewables. They also incorporate some safety performance features through inherent and passive general safety features. They're cost-effective for applications. They are suitable for electricity generation, cogeneration, non-electric applications, and can be used in remote regions and less developed infrastructure. There's so many more, you know, positive things about these, but another one that I came across is environmental impact. So SMRs can contribute to decarbonization efforts by providing low-carbon electricity and potentially replacing fossil fuel-fired power plants, which as people who know this podcast know that that is very important to us here at Alumni Ventures. And Alumni Ventures helps sponsor a lot of companies that are within this sort of climate crisis stage and development within their companies. So yeah, these SMR technologies seem super, super fascinating. So in recap, that was a little bit more about SMRs. And now let's wrap up this episode with Matt's final breakthrough.

So what's your third?

Yeah, my third, I guess it's somewhat related going back to AI, which we know is going to require a lot of power, especially going forward. So saw this article that came out in Bloomberg about OpenAI having developed an internal scale for charting the progress of its It's large language models.

Right.

And they've been very clear that their ultimate goal is to get to artificial general intelligence, AGI. Now we have this report about this really roadmap of what the key steps are. So there's 5 levels to go from where we are today to AGI. So I thought it would be fun to kind of run through those quickly.

Yeah, no, I saw this. I thought this was great. OK. Yeah, yeah.

Yeah, so for those who didn't read it, So where we're at today with the current version of ChatGPT, they call Level 1. It seems like, and maybe they have it internally, we're getting close to Level 2, which would be an AI system that is really capable of matching a PhD-level human when it comes to solving problems. So maybe this will be ChatGPT-5. So we're close to Level 2. Where we go from there, level 3 would be this AI agent that's actually capable of handling tasks for you without you being there. Seems pretty obvious. You can kind of program your AI with certain parameters that will go out in the world and execute those for you.

Yeah, I'm going to Las Vegas, do everything for me.

Yeah, right.

Yeah.

Where it starts to, in my mind, feel like a much bigger leap forward is when you get to this level 4, where your AI is actually coming up with with new ideas and concepts. Mm-hmm. That could be interesting, I think, as we think through startups, business ideas, new innovations, leaps forward in science and technology. And then level 5 is when the AI not only can take over tasks for the individual, but can do that for entire organizations. And I think that's an interesting framework where they take the leap from individual to organizations. And just, I think the concerns that raises the opportunity. But yeah, I thought it was a cool framework to think through.

No, I think it's an excellent framework. And I think, you know, this is, for me, this is also a good analogy with self-driving vehicles, right? And it's like, you know, going from, you know, it's kind of cruise control. And then it's kind of, you know, I feel pretty comfortable, you know, on the highway, you know, but still paying attention. Then it's okay, now it can handle kind of more complicated urban environments. You know, and we've been moving through those levels now. And I guess I'd argue we're probably kind of in the midpoint of, you know, where— You know, you can get in the back seat, say where you're going, and read the newspaper, you know.

Yeah, yeah.

Look on your phone, right?

Waymo in San Francisco.

Which is, you know, but, but we, we have moved through those, I think, in, you know, the past 5 or 7 years. I think the interesting thing is if we have a similar, you know, we're kind of at 1.5 or 2 now. In my opinion. Yep. You know, if we're at 4 or 5 in 5 to 7 years, the world changes a lot. And again, I think that is a very reasonable pacing. It actually seems to be moving faster than that. But, you know, I think these frameworks are really good for us to, you know, understand and monitor. And, you know, I know in our business, it impacts kind of how we think about investing in startups today. It's like you have to be investing, understanding that the world's going to be at level 3 or level 4 when this startup today kind of is hitting its stride and figuring things out. So, yeah, really important framework. I saw that. I thought that was a great one. I think it's probably on my list actually to share. So, you beat me to that one, Matt.

Good. Okay. Good minds think alike.

Excellent. All right, have a good rest of your week. Thanks, everybody. We'll do it again.

Take care.

Take care.

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