The New Age of Power

Robert: Welcome back, everybody. We're on the Contech Exec podcast. Today I've got Michael Wood here with me from DG Matrix. Michael, thanks for being on the program today. It's a bit of a it's a bit of a move for me. I normally do, you know, context founders where I'm talking about more about software, but I'm making a shift, man. I'm gonna make a shift because I need to talk about guys that are actually providing solutions for Infrastructure, power grids, those types of things and DG Matrix is making some waves.

Michael Wood III: That's the truth. there's no more exciting time in the market than right now and all the work that we're doing on data centers and behind the meter power and pulse loads and things are changing a lot faster than people are are used to, I guess I'll say in this industry. So that's producing a a lot of challenge but a lot of opportunity for us to solve.

Robert: Yeah, I think the speed thing is really throwing folks for a loop. not only in manufacturing, but also in in construction. we're being asked to do some things that have never been done before, ever. So let's get s let's give a little background here on DG Matrix, kind of what it does so that my construction folks out there understand. What I'm feeling like I'm trying to do here is I want to introduce the AEC world to products that they may not be in front of. You know, a lot of times an engineering group will design the same system over and over again, always using the same products, same ways. You guys got a different idea and it's surrounding Transformers. So I I'm gonna let you kind of give me a little bit of history, tell folks kind of what it is that DG Matrix does.

Michael Wood III: Absolutely. And and it really all goes back to that point on speed. I mean, in the data center market, we're focused on schedule, we're focused on cost, and we're focused on reliability and simplification, which is a product of all three of those. That's kind of where we play. That's what we're focused on driving. So our core technology is what's called a solid state transformer. So think of a conventional transformer, big hunk of iron, copper, steel. You got one AC voltage coming in. One AC voltage going out. The exact same thing that Tesla and Edison were deploying. It's what we're deploying today. Solid state transformer uses power electronics, and that gives you much wider voltage range, lets you convert from AC to DC, efficiency, footprint benefits, et cetera. But it's still that linear power path. What DG Matrix does very specifically is what's called a multi-port solid state transformer. So think of us as right at the center, integrating multiple. AC and DC sources and loads all simultaneously. So we're blending power from the grid, power from a battery, power from behind the meter generation, from backup gensets, fuel cells, anything that you can think of, and delivering that to multiple loads. And a data center site might be delivering AC or DC IT load. We're delivering to the mechanical loads inside of a data center. But that central hardware as well as a software platform dictating how we're controlling all. And now backing up the history of the data center industry, for a very long time, data centers were built pretty much the exact same way. There hasn't been a whole lot of technology innovation, especially on the power side. But now, as rack densities go from five or six kilowatts a few years ago to hundreds of kilowatts and approaching megawatt scale now with the latest AI racks, we have to totally rethink it. And so DG Matrix is really at the forefront. Of driving that next generation of AI and power infrastructure and all of the complexities, not just on the AI side, but on all of the ripple effects across the entire energy ecosystem and supply chain that AI infrastructure is driving.

Robert: All right, there's a lot to unpack there. because and I won't say that you guys are new kid on the block, but I will say that this this is new technology, for the industry. Something I won't say untried and untrue 'cause I don't know. But Where where are you putting these things? Where it's where's your use case that says, We've got it working right here and we're gonna show you how it works?

Michael Wood III: 95% of what we're doing today is data centers. So we actually started in the electrification market and a bit of a background on the company. you know, we're headquartered here in Raleigh, North Carolina. I'm sitting in Raleigh Factory One. We've got Raleigh Factories two and three right behind us, multi-gigawatt expansions that'll be up and running here shortly. And we're about 500 people, about 500 engineers globally, 30-35 PhDs. And the two co-founders of the company. Have been doing safety critical and mission critical power electronics for decades. And our co-founder and CTO, Dr. Subhishish Badacharya, he's really the world leading expert in solid state transformers for the last 15-20 years. You take all the papers in the world written about SSTs, his name is on about 60% of them. And so compared to any other SST company that you may see, you know, we're commercial, we're deploying units. This is tested and proven and in the field today. And so migrating from our initial roots in the electrification market, we got a call a few years ago from a a very large GPU company, whoever that may be, and they

Robert: Mm-hmm.

Michael Wood III: said, hey, we've been following DG Matrix for a while. We've got a few questions for you. Number one, does this thing work? Yes, it works.

Robert: Same th everybody's asking the same questions, right? Does this work?

Michael Wood III: The does it work? Yes, come visit us in Raleigh. It it works. It's real. They said, okay, great. Question number two, can you put this in a data center? Sure, don't see why not. Said, well, there's a few things that we're looking for that you're gonna start hearing about. Number one is behind the meter power. Number two is behind the er sorry, behind the meter power was number one, still most important. Second is 800 volt DC data center architectures. And the third is this little thing called pulse loads. And that's the dynamic loads of these GPUs that they're not running at steady state. They're very spiky pulsing, which causes a whole host of problems for behind the meter generation infrastructure and electrical systems, et cetera. And so that really Yeah.

Robert: Okay, so that's intri that's an interesting point 'cause that's something nobody brings up anymore about the everybody thinks, you know, you plug it in like a toaster and you turn it on and it just goes, right? But this is it's different whole different world now that we're talking about these these high tech GPUs. They they don't work like you know, it's not like a toaster, right? It's it's not like that at all.

Michael Wood III: Exactly. And especially when we're playing at gigawatt scale now. So I mean, if you've got a couple hundred kilowatt load that's oscillating between a couple hundred kilowatts and four hundred kilowatts, that's one thing. If you've got a gigawatt data center that has having five hundred megawatt oscillations multiple times a second, that's gonna create some very real issues. And so what we very uniquely are able to do is essentially solve that pulse load problem. By being able to use our solid state transformer solutions coupled with high C rate batteries, super caps, other energy storage technologies to smooth out that pulse loading. And so the grid isn't seeing that swing and the associated voltage frequency issues, the behind the meter generation isn't seeing that swing. So turbines aren't cracking, generator shafts aren't shearing. And the other electrical infrastructure, like UPSs and inverters getting fried in a few days to a few weeks, that's not happening anymore. So it's a very, very real problem that's transitioned from theory into reality.

Robert: Okay, so Done a few I've done a few switchovers, you know, switch gear, swap out, swap out the UPS, you know, done the whole thing, worked on some mission critical stuff, and literally, you know, had the truck outside for the switch over because we couldn't have it go down, right? So we had to go from, you know, one to the S one well, the original UPS actually kicked in for just a second and then switched over. But you're saying that this unit that we're talking about, and from what I'm hearing, from what I've investigated, it's a this four by four cube. that is you know, it's not a thirty foot skid, it's not sixteen different pieces of gear, it is one one unit. Is that right?

Michael Wood III: Yeah, there there's multiple different configurations that we can deploy in, but that's essentially the concept of you know, rather than having all of these discrete power conversion, isolation, protection stages that 10, 15 components, you're consolidating that function to a single unit. So multiple ports, each replacing an inverter, rectifier, an isolation transformer, protection stage, et cetera. And that's kind of really the thesis of the company is, you know, rather than bespoke stick builds where we're defining that infrastructure for every single site, you're transferring all of that configurability to the software layer. So you're dropping in the same unit no matter what.

Robert: Okay. Now let's talk a little bit. Well we get too far in the weeds, but l you know, let's just go. You know, let's talk about redundancy. Let's talk about backup power. Okay. What's what's that? Is there another unit behind it kind of thing? Is our are side by side running in parallel? What what does that look like?

Michael Wood III: Yeah, and importantly, just on our delivery strategy, what I'll say is nobody's coming to us and they're asking for SSTs. They're asking for solutions to pulse loads and AC and DCIT load flexibility behind the meter integration. And so our approach is much less on just the individual unit. It's on the entire delivery system. It's how we're thinking about the power strategy, how we're thinking about the redundancy strategy, how we're working

Robert: Right.

Michael Wood III: with our integration partners. And so most commonly, we're delivering as part of like a multimegawatt skidded solution that's your whole drop in solution that you can go drop on a data center side and plug in effectively. And there's several yeah, go ahead, go ahead.

Robert: No, yeah, you know, I mean you got me my my wheels are turning over here, so I'm just thinking about that. Okay, we bring in this kid, the modular type units where the batteries, everything is all together with it. So when we're kind of tying in, it's it's all right there together. We don't have this kind of spread out. You know, this piece over here, that piece over there, not a lot of transmission. It's kind of all together. So your batteries, everything that you've got there is kind of all together.

Michael Wood III: Yeah, exactly. And so we're delivering as a consolidated package. And how we actually slice and dice of where we put things depends a little bit on the project, but that centralized block of multiport SST, that's not gonna change. No matter what site, no matter what data center architecture, no matter what power sources are available, no matter what jurisdiction we're deploying in, that's gonna be the exact same, no matter what. And that's why we work with multi-site developers, global operators. Who that's really want what they want, the standardization at scale. So they've got ever all these different customers, all the hyperscalers, all the neo clouds, they all have little bit different requirements. They want one thing that they can deploy on every single site.

Robert: Okay. So Are we having are you having any trouble with like the engineering or permitting of these things? I I suppose they have to have some sort of UL listing, something like that. Kinda tell me how you guys have, you know, navigated those those waters a little bit. Because again, I mean you're you're seeing you get you all this stuff, you know, push back against sites. Before you ever get pushback against sites from the public, you get pushback from the the the permitting office. And, you know, well wait a minute, what is this? I've never seen this before. Somebody's gotta explain this to me. So kind of let's go through that just a little bit. How's that looking, from that side of things?

Michael Wood III: Yeah, absolutely great question. And a lot of that goes back to the team experience. And pretty much everybody at DG Matrix has been in mission critical, safety critical, power electronics for a very long time, mu much longer than I have, that's for sure. And so we thought about all of these things from day one. Our chief delivery officer, for example, was an executive at Intertech, has certified quite literally thousands of products. And so we engineered the standards and the certification and the manufacturability and all of that alongside the product design years ago. And so we've gotten very skilled at doing that. And also, as of recently, I might be breaking the news here, but I'm gonna do it anyway. we have the the

Robert: Yeah, along with the exclusive man.

Michael Wood III: exclusive, we have the only and the first certified solid state transformer lab in the world, as far as we know, which is very, very key for us to accelerate the testing and implementation certification work that we

Robert: Fantastic. Okay. So big question here. I love the fact that you're able to say, hey, this is you've got the product, you've got the certified lab, you've got all of that. Let's talk a little bit about the manufacturing side of this. One of the biggest problems that we've got is the ability to manufacture. And it's not just transformers either, right? We're talking about turbines, we're talking about gas supply, pipeline, water. y whatever. We're we're getting the materials to the site, you know, in a timely fashion. As we talked about right from the beginning, the speed to delivery. How's that going for you guys?

Michael Wood III: Yeah, it's a great question. And and one of the big reasons that people come to us is that supply chain consolidation and simplification. we've got a great diagram, we call it SpiderWeb diagram, which essentially shows all of the components that we're replacing, all the individual power conversion and isolation stages and all of that, collapsing down to an interport unit. And so rather than procurement teams going out and sourcing five of these and three of those and four of those, one throat to choke. It's one single point. so that is kind of the customer in driving that. From our manufacturing standpoint, we are very aggressively. Ramping up operations, most of that right here in Raleigh. And so I'm sitting in RDE one, which was our first manufacturing facility in Raleigh, in addition to our offshore facility that's all already been up and running. RDU two, we announced relatively recently that'll be operational toward the end of this year, and that's a multi-gigawatt expansion. And publicly we've disclosed our plans that will be about 10 gigawatts of annual manufacturing capacity. By the middle of next year, roughly, and continuing to increase that. goes back to your question on designing for manufacturability from day one. So we've essentially got a five thousand square foot repeatable factory cell that we just duplicate in a couple months, anywhere we've got keys to a building and power, we can duplicate and stand that up. So we can service orders, we can ramp up production in the time between an order being received and delivery to a site.

Robert: Okay. So I love that. I mean it it it's good news. It's it's good I mean it's good news to hear this. I want to talk a little bit about but customization, right? Because a lot of times what engineering groups will say and what I've heard and again I'm I'm I'm a guy that's it'd been in construction, so I don't know all the ins and outs. You know, I've been around it, I understand, enough to be dangerous. But customization, like all these loads are different, you know, this is not, you know, this is not what the design would detail. How do you address that as DG Matrix and say, yeah, probably not gonna have to worry about that? Or is there some customization then it that is involved in these designs?

Michael Wood III: It's a great question. And I'll go back to kind of that original thesis of DG Matrix, which is standardized hardware configuring in the software layer. Every single unit coming out of the DG Matrix factory, hardware is identical. Every single thing, all the ports, we've got two types of ports, AC or DC. That's it. You either put AC ports in the unit or a certain number of AC ports and a certain number of DC ports in the unit. That's it. Every single thing's the same. And so all the units coming out of the factory are identical. What does change is the software configurability. And so we can configure each port to have to work with a specific source, a specific load. They're all bidirectional. So this can change. And importantly, this can change on a fly on the fly. Because these sites are not always static. They're dynamic. And so we

Robert: yeah.

Michael Wood III: can configure and we can reconfigure in the field and on the fly as needed. So the software layer is where a lot of that I guess configurability, I guess I'll say, comes in. And that's how we can use the same hardware to meet every single customer's needs.

Robert: Okay, so you've got a behind the meter, you know, plant that that's been designed for a data campus, and I'm gonna start calling data plants just because I feel like

Michael Wood III: Mm-hmm.

Robert: they are. You know, you're not gonna have you're not gonna have a data center without a without a power plant behind it at at some level. so but y maybe part of it's powered by they've got a They've got a couple of reciprocating turbines there that, you know, maybe that's their redundant slack schedule. And then they've got some battery packs that maybe or they're they're pulling some in from the grid off and I like I said, I don't know how that works, but if you've got a solar field or if you whatever, wind power, whatever, you're saying that any of those loads can come in from one side. Your software basically handles all the balancing of how that works and then the output. handling that kind of, you know, surge protection for these models.

Michael Wood III: That's exactly right. Bring it into a different port and that controls you mean you got it exactly right. The controls in the software layer is really, really key because we're essentially acting as The EMS, the microgrid controller for the whole campus. And so we understand very, very granularly and are making these decisions in microseconds about how we're blending power between different sources and delivering that to individual loads. So kind of think of us as like that power fabric. We're on one side, we're optimizing every single source, typically for the lowest levelized cost of electricity, but also factoring in resiliency, emissions, et cetera, and delivering that to the most profitable. profitable load in real time. So those decisions have to be very, very fast and very, very accurate, which is where a lot of that controls and software expertise comes in.

Robert: All right, you mentioned emissions and that makes me think of heat, that kind of thing. How does that work for you guys? So what kind of cooling does this thing require? 'Cause I gotta imagine this thing probably r as they say runs a little hot.

Michael Wood III: Not too much. There's not too much heat rejection because of the efficiency. Yeah.

Robert: Really? Okay.

Michael Wood III: running at a very high efficiency. We're not kicking out too much heat, but it's all designed to be or it's all sealed internal liquid cooling. And so very importantly, we're not tapping into the data center's cooling system. That's a whole other world of complexity. typically we're sitting outside, out in the elements, using our own liquid cooling system and and that's it. Pretty straightforward.

Robert: Okay. So you got your own H V A C system built in and and then y you're supplying your own control software and it's just that's the thing that amazed me about this and I'm again when you read about this kind of in the and not you but but you read about things in the in the public view you hear all the same things. We're we're we're built on fifty to seventy-five year old technology that we've bit's continually using over and over and over again. Tell me why, and this is okay, I know you're just you're kind of one kind of fish in the pond here at, you know, but why in the world have we not been doing this for the standard grid in communities like new communities are getting built. These why are we using same old transformers, same old stuff? I mean, I kinda know why. I mean look, Encore's been around here in Texas for years and they're still working off of spreadsheets and, you know, draft portals. So tell me, is you have an idea on that? What's what's what's been going on?

Michael Wood III: Absolutely. It's a fantastic question. And this is something that you know we've discussed at length with our team. And of course, our our CTO being like the godfather of the SST over the last 20 years, have a lot of insight onto you know the why now for solid state transformers. And there's really three things. Number one is materials. So proliferation of materials like silicon carbide transistors, for example. The EV market got those to such an appreciable scale. Proven reliability, lower cost, that was a very key component. The second thing is the market. So the need for very resilient, very controllable, software-defined power, especially in the case of AI data centers, that has created a much, much larger market and made it much more feasible for solid-state transformers to scale and to be deployed at scale. And the final one is the multi-port SST SST. And of course, that's specific to DG Matrix. The case for a single input, single output solid state transformer, which is what any of our SST competitors are doing, i is limited because you're essentially only replacing that one branch, maybe a couple stages of of power infrastructure. Whereas with the multi-port solid state transformer, you're replacing 10, 15, sometimes 20 components, as well as all of the Software, firmware integration, different lead times, different vendors, all of that complexity with the entire energy system. So the value that you can deliver with multi-port is 10x that of what you can deliver with a single input, single output SST. So it's really those three things. It's materials like silicon carbide, it's market timing and proliferation of data centers and a need for more controllable power. And finally, it's the multi-port solid state transformer. Specifically with DG matrix.

Robert: Okay. I don't wanna bring up your competitor's name or whatever, so I'm not going to but he was on I think Bloomberg or something a few weeks back, whatever. talking about there's available power out there on the grid right now, if we would just balance the loads, it seems like solid state transformers would be a logical idea, to help balance the load and get what we can out of the grid now. Has there been any d discussion about that with you guys about how how you might be able to handle that?

Michael Wood III: Absolutely. It's something that we're dealing with every single day, especially with our data center customers and especially in markets like Texas, where there are very specific requirements around ERCOT compliance and Senate Bill Six, all of those requirements, and how solid state transformers can, you know, help mitigate some of the challenges associated with connecting large loads to the grid. And there's a few things, you know, voltage ride-through, frequency ride-through, ramp rate control, demand response, all of these capabilities that we need for data centers and any large load for that matter to be a positive contribution to the grid rather than a risk factor. And especially kind of where we sit. I mean, think of DG Matrix, you know, as we sit right at the center of all the sources and loads, we have all that real-time data and we have all that real-time control. So we can be a very good friend to the grid in responding to any scenario, providing all of those capabilities that they need by leveraging demand response and behind the meter assets and grid interactivity to give the grid exactly what it needs to maintain stability.

Robert: Okay. So is this I always call it the good old boy network 'cause it does exist, here in Texas and I don't want anybody in black suits coming to my door, but it does happen. It seems like there's just a lot of fingers in the pie, that don't want to get out of the pie. to to kind of fix this. Look, man, I I lived we lived through here, I've been here for twenty five years. I lived through a couple of different ice storms. This last one a few years back was brutal. you know, people off without power for a couple of weeks in some locations, you know, some people some my like my neighbors across the street, literally across the street, weren't on the same transformer that I was on. I never ran out of power, but people across the street didn't have power. Folks coming over to the house to, you know, shower, you know, get warm, do stuff like that. It was crazy. And when I think about the folks that are caught in the in these different these different suppliers, they've just got a lot of they got a lot of what to call it, service issues. They they can't quite get it. They don't they've got enough money n you know, to get to what maybe they can get to, but then it's just not enough to find service to find new things. Are we talking about a price point issue of fixing things, or are we talking about, there's just too much bureaucracy in the way to make it happen?

Michael Wood III: It's it's a good question. And you know, there's part of it that, you know, has to be solved at the grid level, but there's a lot of it that can be done at a distributed level, which is, you know, really where we're focused. And, you know, across the board, distributed energy and more distributed assets are going to strengthen a grid. It's gonna give you more flexibility, better ability to go through ride through events to provide you know, support in terms of demand response. And so the more behind the meter assets, the more storage assets that are out there and the more control you have over all of them, the more stable your grid's gonna be. And, you know, built right, and that's how we're encouraging our data center customers to do it, and is really where the industry is heading. All of these installations should lower costs and improve reliability for everyone on the grid by being able to control and have the flexibility over these assets. And We're very proud to to partner with some of the the leading groups who are at the the front lines of doing that. And there's some people who are doing it very, very well.

Robert: Yeah. Any chance you name all those folks who you guys are working with?

Michael Wood III: Can't name all of them, unfortunately. There's a lot of them that are public, and there's a lot of them that would give me phone calls immediately after this episode is released. But we'll we

Robert: Well, I'm hoping they're watching. I mean I well I mean it's just

Michael Wood III: will send it all to them, but I mean just broadly, you know, we're working with it every big data center, developer, operator, etc. that you can think of, and also the entire ecosystem, 'cause that's an important part of what we're delivering. You know, we're not delivering SSTs. We're delivering energy solutions. We're delivering megawatts because that's what our data center customers ultimately need. And so it's a it's a big tent and it is a a a lot of folks that we work with to deliver that kind of full turnkey solution that it's what everyone's asking for.

Robert: So can you tell me what your guys' current lead time is on a system like this?

Michael Wood III: It it depends a little bit, but I mean typically we're delivering in somewhere along the lines of, you know, five, six months, far faster than a lot of the conventional equipment that is out there, of course.

Robert: Yeah. Right. Well and I like okay, so you've got an offshore manufacturing, but you've also got a manufacturing facility there in Raleigh.

Michael Wood III: That's correct.

Robert: those things really help, right? especially being, you know, kind of in country, let's just say, and not having to bring it across any kind of large body of water. So five to six months, I mean that's that's fantastic. really, compared to what most folks are talking about when you start to read all the different all the different data that's that's kind of out there. You know, they were just crazy amounts, you know, months upon months, e working into years on these transformers being being delivered in the in all say the old fashioned or the the the status quo technology. I worry for you guys that it's gonna you know, the cat's gonna get out the bag and y you're g you're gonna be inundated, with this. Is are you finding that already?

Michael Wood III: We are busy. We're busy. There is a reason that there's factories three and four and five, et cetera, coming out. And you know, we've been very strategic about how we ramp up capacity and and how we work with partners to ramp up capacity too. with some of the relationships that we have that I can't name with some of the largest companies in this industry, we've augmented our ability to to not only supply but also to service and commission and deliver, et cetera. 'Cause it's it's really that end to end value chain that we have to think about. It's not just manufacturing the product, it's everything

Robert: Correct. Yeah.

Michael Wood III: that goes downstream with installation, commissioning, deployment, service, all of that. And so

Robert: Right, yeah, because this is it's not it's supposed to be there for the next twenty to thirty years, right? I mean it's not gonna

Michael Wood III: Exactly.

Robert: it's not just one of those things where it's and it's definitely not plug and play. This is the weird thing and I think this is the dynamic that's been happening for between I'll say construction and technology and i and even sometimes manufacturing and technology is is that folks say, you know, it's like, Well, I want that, okay, great, I can get you that, but it's going to take these certain things and then we got this to do and then like, wait a minute, why is it why Why does it take so long? But it's that's the wall we're running into right now, with technology saying, I'm gonna throw $700 billion at you and then just make me a bicycle clown. You know, it's like, come on. You've got to be realistic and say that they're meeting this physical wall that actually does happen. The physical wall, the physical reality of the world says. First we've got to make it if we don't have it in stock, right? It's gotta be to the right specifications so that we make sure that we're getting it right the first time. We've gotta install it, we've gotta connect it, we gotta commission it, right? We've gotta service it afterwards. There may be redundancy factor inside of that system. You gotta have software to go with it. Luckily, so you guys are solving a lot of these problems ahead of time for people. We why you know, we've got this weird situation where it's like everybody's like, I didn't realize and it's it were you not listening, you know, when we built when the internet came and and had a bust.

Michael Wood III: This is real stuff. This is infrastructure. It's this is parts in the ground and boots on the ground. Yeah, absolutely.

Robert: Yeah. W one of the things kinda breaking away just a little bit and I wanna talk you something that they don't talk about a lot, kind of transmission. now you guys probably don't deal much with that, but if you were to work in a kind of that municipal space, you know, with those different large energy providers, transmission lines are a big deal. getting, you know, getting the load shifted from wherever it's at to say one of your units and then your unit, you know, doing what it does. Kind of people over there are thinking about that too when they start thinking about that municipal side of the world?

Michael Wood III: Yeah, it's it's it's a good question and it's interesting 'cause a a lot of our team's background comes out of the utility world. So our

Robert: Mm-hmm. Well, that's where all the large load power i is, right? I mean,

Michael Wood III: Yeah.

Robert: up until now we're, you know, data centers are kind of that if you weren't in an in in industrial, you know, industrial strength world, you really, you know, you were dealing with your alignment dealing with energy, you're a large energy company dealing with energy, but everybody else, you know, was dealing with low voltage.

Michael Wood III: Yeah, exactly. Exactly. And you know, for example, our CEO was CTO of a company called Smart Wires, deployed gigawatts and gigawatts of power electronics all over the world.

Robert: See, I did my homework. That I that's why I did my homework. I read all that. So and then I'm I'm setting you up. Yeah. Right.

Michael Wood III: Yeah. It's like transmission grid. Real real real stuff. And all of the safety criticality and cyber security and reliability and all of that that is demanded absolutely critical in the transmission grid kind of carries over to our approach of how we design, how we manufacture, how we deploy service, all of that rooted in the utility data center defense aerospace world that our team comes from. But you know, most of Our focus and where we're seeing customers orient is they are not waiting for the grid. They are provisioning for the grid. So they're putting in their interconnects and they're asking the grid for more power, but they are not waiting to get their site up and running. And we've seen very broad adoption of the largest companies in the world being very comfortable with behind the meter power as this has gotten much, much more popular, and there's kind of no other alternative. But a lot of the sites that we're working on, they're leveraging behind the meter generation, but provisioning for that grid to come in so we can phase it in when it's ready. And the grid is still, I mean, where you can get it, that's that's the way to go. But behind the meter generation is faster and more accessible in a lot of places right now.

Robert: And you've got the multi port technology obviously to handle it. obviously

Michael Wood III: You don't have to choose, you can do both.

Robert: that is correct. I think the important part is is that yes, you're going to do behind a meter to get these things up and running, because we need, you know, compute, those types of things. But the second part is is that the the contribution should also fall back to I I would say it needs to fall back to the ratepayer. at some level, I mean we can't we can't just give up certain things and say, Hey, by the way, we get power first no matter what. No, we I really feel like the the hyperscalers, the folks doing these things, these data centers, do need to give back to these communities in the form of some of that extra energy, that balanced load technology.

Michael Wood III: Three more. Absolutely, couldn't agree more. And and we're seeing a lot of examples of it done very well. Cause the reality of it is, with all of the behind the meter generation storage assets that we're deploying at these sites, we should, as I said earlier, you know, should lower costs for everybody else on the grid and it should increase reliability. And we're seeing the overwhelming majority of our data center customers do it right. and do it very well, not just from an energy standpoint, but also from a community and engagement and acceptance standpoint. And you know, there's some of our customers who are building new additions to local schools or building rec centers. They're investing in the community. They're offering jobs to anybody who shows up on the site, doing really, really good things so the community actually recognizes the benefits of that data center being built. you know, right next to where they live, versus other people.

Robert: Yeah, I start to think about it, you know, a lot of folks think about just the direct jobs available to these data centers. Maybe it's two hundred, you know, the number's always right around two hundred or a hundred and fifty, you know, folks that can work at a data center. But then there's the other things that go with the data centers. There's the service part of the technology, right? Kind of to your point. Once you commission a thing, it doesn't mean you're done, right? It means guess what? Now you're on a now you're on a service schedule. You got, you know, warranty issues or you've got to make sure that this thing is serviced properly, you know, and everything's checking out the way it needs. So there is still opportunity beyond all that. I'm sure you guys are probably hiring like crazy trying to find people to help you with the the current backlog that you have. Twenty twenty seven, I don't know, will probably bring more of that backlog, but again, this stuff creates jobs.

Michael Wood III: It does. Absolutely. I mean, both in the dick direct construction jobs when the site's being built, but also long term. And also as you pointed out, the indirect benefits of the community. I mean, some of the largest data center sites that we're working on, there are more construction people coming to site every single day than there are in the town where this is being built. Sometimes

Robert: Yeah.

Michael Wood III: a multiple factor of that and then all of the r you know, the downstream implications of you know, hotels and restaurants and jobs in the local community that will be supported, not just when the data center is being built, but also for a long time after. I mean, the the data center industry say hasn't always done the best job from a PR standpoint, because for the longest time, data centers wanted to kind of be under the radar, sensitive, confidential data and everything else. And it's just some warehouse back here you don't need to know. But now with AI and the size going up so much. Data centers didn't really have the or the industry didn't really have the PR muscle to be able to counter some of the misconceptions because there are a lot of misconceptions. And so there's a lot that we can do better to show how we can do it right and how we are doing it right.

Robert: Yeah. Yeah. I think you know, it's weird. It's always like that that one bad apple kind of spoils the spoils the bunch kind of thing. Like I don't know, I've been in the construction business for years and I've never heard good news, you know, from people when you start to talk about your your industry. yeah, the you know, contractors are always a bunch of shysters and they're not out to do the right thing and I've got screwed by this guy or that. And it's like you never hear the good stuff. Like if you go look at Virginia and you talk about Louden County and some of their I mean data center

Michael Wood III: Yeah.

Robert: Alley, a lot of success stories in there. don't hear that much, but a lot of success stories in there.

Michael Wood III: That's absolutely right. And we and we need to publicize those more and encourage the best practices. You know, one of the cool parts about DG Matrix is we get to work with all these guys. We get to work with all sorts of developers and everybody who's building at this scale. And so we've seen how to do it right and we kinda we can use those learnings to influence the approach of others.

Robert: So one thing I did want to talk to you about because I think there's opportunity here. a lot of a lot of smaller markets. We don't necessarily have to build it all one size. There's a lot of space, I think, for, you know, modular data centers. It is my opinion, it's something I think about a lot, but I think that AI, in its as it as it grows, It's not all gonna be handled out of a large data center. It's gonna be handled very locally. And most towns and centers as they start to either grow or however they, you know, start to guess what? I got a feeling they're gonna be a modular sort of space there for that place to, you know, kind of house its own local system. What do you think about that? I I feel like again, that balancing of the load, a system that says, Hey, this is all this needs, that's gonna be very, very important as as we move toward that.

Michael Wood III: Absolutely, and especially for use cases like inference where latency is really important and you want that done as close to the edge as possible. But also the concept of going where the capacity is. I mean there are hundreds, thousands of substations across the United States with available power. And maybe it's two megawatts, five megawatts, ten megawatts, twenty megawatts. It may not be the gigawatt that you want for your big AI training cluster, but all of these edge sites, we definitely see a massive proliferation in that market. We're working with some fantastic partners who are doing work in that space, really focused on modular and edge data centers. And we're inherently modular as well. So it's a great use case for our application, because when you're deploying against a thousand five megawatt sites, you need to have something that is very standard, very software configurable. You can drop in the same block every time. So we definitely see a lot more going edge and modular as as the industry continues to build out and progress.

Robert: Okay. So last point here as we're kind of wrapping up, I know it goes pretty quick, but last point we're gonna talk about the labor. And we wanna talk about getting, you know, a a DG matrix system in. it seems like it's a lot less labor. Like you roll it in and then it's a lot less labor. Obviously you still have some sort of generation module that you gotta connect to. You've got the output that you've got to connect up, you do all those kind of things. But Are we gonna have are we seeing problems, I guess I should say. You would know better than I. Are we seeing problems with yeah, we're gonna get that on time, but I just don't know if we got the guys to hook it up.

Michael Wood III: Skilled labor is always a consideration and construction jobs always a consideration at these sites. And that's a big push for You know, why people want to work with DG Matrix because there's obviously the inherent consolidation of infrastructure. But also a lot of what we're doing in terms of the skidding integration approach, we're prefabbing eighty, ninety percent of this in a factory. And so when we drop it on site, doing your cable terminations, commissioning sequence, and you're up and running and ready to go. there's also I'll go on a slight detour here. a lot of AI work streams that DG Matrix has developed using our own internal models and whatnot to support all of this. We have a 15-person AI team, full-time AI team, led by a PhD in AI, which I didn't even know you could get at this point, but

Robert: Yeah, I didn't know that either.

Michael Wood III: implementing AI and everything from engineering, manufacturing, production testing, commissioning everything that you can think of. And just as like a couple examples, we've been able to consolidate key parts of our mechanical engineering design from 10,000 hours to about 90 minutes on average. And every unit going out of DG Matrix facility has over a thousand critical to quality parameters that it's testing on. And that takes days, or at least it used to. Now with automated testing and AI analysis, we've been able to do that in about 30 minutes. So all of these work streams where we're able to leverage AI, but also AR VR, working with our service partners and technicians to implement that, we've been able to streamline that very significantly. Very much a passion of a lot of folks at DG Matrix, and we're we pride ourselves on being very AI native and extending that into our partners and customers too.

Robert: Right. So to my electrician friends out there who are, you know, looking or probably not looking for work, but you know, you want to be a budding electrician, this is an area that you're gonna have to be familiar with, right? I mean this is this is the crux of it all. This is, you know, clean power to data centers, clean power to your house, could be anything. It seems to me like solid state transformers are the future of power. I mean.

Michael Wood III: And not just the future, they're they're the now as well.

Robert: They're the now. They're the now. Well, I tell you what, I was excited about this whole thing. I learned a bunch from you. Thank you so much, Michael, for spending some time with me today. I'm gonna get this thing out to to my friends in the AEC community. Hopefully everybody will share it with everybody so people understand a little bit better about the technology that's available today, so we can stop s kind of stop some of this madness or at least, you know, put a hole in you know, put a thumb in one of the holes that we've got going on.

Michael Wood III: Absolutely. And DG Matrix would love to work with all of you. So please feel free to look us up, Dg Matrix dot com. We are very active on our LinkedIn and socials and every everywhere else and looking forward to talking with many of you, hopefully.

Robert: Fantastic. Well, thanks again, folks. That's it for this episode of t of Contech Exec. I have like three businesses, so sometimes I get confused about which one I'm talking about.

Michael Wood III: Yeah.

Robert: So it's Contech Exec today, but thanks for being here today, Michael, and we'll see y'all next time.

Michael Wood III: Thank you very much, Robert.