Episode #31: Three Breakthroughs: Why are SMRs (small modular reactors) a thing?

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

  Matt Caspari:
  Reading through some of the work, what caught my eye is that they actually took a lot of inspiration from biology.

  Mike Collins:
  Some of the things going on in trying to make the equivalent of a gigafactory—it’s a big deal. There’s some really promising stuff. We’re investors in some; we want to be investors in others.

  Sam:
  In a world captivated by criticism, it’s easy to overlook the groundbreaking technologies shaping our future. Let’s shine a light on innovators who are propelling us forward.

  As the most active venture capital firm in the US, we have an exceptional view of tech’s real-world impact. Join us as we explore, celebrate, and contribute to the stories of those creating tomorrow. Welcome to the Tech Optimist.

  As a reminder, the Tech Optimist podcast is for informational purposes only. It is not personalized advice, and it’s not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode.

  Mike Collins:
  Hi, welcome to Alumni Ventures and our Tech Optimist podcast. On the show, three breakthroughs—we look at some of the most interesting new developments in innovation, technology, and science, particularly with an eye on areas that we’re interested in investing in, understanding better, and believe 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.

  Matt Caspari:
  Hey, Mike. Good to see you.

  Mike Collins:
  Okay, you’re kicking it off today. What do you have?

  Matt Caspari:
  Yeah, so I’ve got a development in battery technology, specifically batteries designed for electric air travel. The breakthroughs are actually inspired by biology, which I thought was interesting.

  The study came out recently in a scientific journal called Joule. The research team—scientists at UC Berkeley and the University of Michigan, also working with some industry partners—designed this new electric aircraft battery. They demonstrated a fourfold increase 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 air flight.

  Mike Collins:
  Which is the key, right? I mean, it’s power per weight per… There are three or four numbers that explain why we don’t have flying cars yet—that’s the problem, right?

  Matt Caspari:
  Exactly. It was cool looking at the people involved. One of the lead researchers from UC Berkeley is actually a co-founder of a company that we’ve invested in previously called Sepion Technology. Again, we’re interested in these battery breakthroughs. This is at a much earlier stage, but really cool and exciting.

  As I read through some of the work, what caught my eye is that they took inspiration from biology. There was a quote in an article where one of the lead scientists said that biologists use omics—a broad term for fields like genomics and proteomics. They use these techniques to study complex relationships between things like gene expression and DNA structure.

  These battery researchers were inspired by that approach. They decided to examine the chemical signatures of the battery components to figure out where problems were occurring. Conventional wisdom assumed that a key issue they call “power fade” was happening in the anode of the battery. That turned out to be wrong—it’s actually on the cathode side.

  Using these insights, they developed a new electrolyte—the way electrons move through the battery—and added special salts into it. This breakthrough allowed for a significant performance increase and made the batteries resistant to corrosion.

  It’s exciting, and they’re planning to begin actual flight testing in 2025. Pretty cool breakthrough.

  Mike Collins:
  Yeah, that’s very cool. Again, we see that cross-disciplinary work is so important to innovation. Looking toward nature has obviously been a theme in pharma and other areas.

  Sam:
  I’m here to provide another footnote for this first breakthrough Matt shared today.

  Really quick, I’ll break down how a battery works. Matt brought up keywords like cathode and anode, and I had no idea what those meant in reference to a battery.

  Cathodes and anodes are essential components in a battery that work together to generate electrical energy through electrochemical reactions. Here’s how they function:

  • A cathode is the positive electrode during discharge. When you take a AAA or AA battery—or even a D battery—you see a plus or minus on either side of the battery. I’ve personally never known what those meant. In some electronics, you have to insert them in the correct orientation. The cathode receives electrons from the external circuit and undergoes reduction, meaning it gains electrons. It’s typically made of metallic oxides like lithium cobalt oxide or iron phosphate. During discharge, positive ions (cations) move toward the cathode through the electrolyte.

  • An anode is the negative electrode during discharge. It releases electrons to the external circuit and undergoes oxidation, meaning it loses electrons. It’s often made of materials like graphite or silicon in lithium-ion batteries. During discharge, it releases both electrons and ions.

  How they work together: during discharge, the anode releases electrons to the external circuit. Those electrons flow through the connected device, providing electrical power, and then enter the cathode where they participate in the reduction reaction. Simultaneously, positive ions move from the anode to the cathode through the electrolyte.

  Now that we understand the basics of battery function, the paper Matt mentioned—published by Joule—is publicly available. We’ll provide a link in the show notes. They’ve also provided free highlights and a summary.

  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 improved performance in Li-NMC811 cells.

  • High-capacity cells tested in realistic missions capturing vertical takeoff and landing.

  Summary:
  Omics is a discipline that identifies and quantifies molecular processes contributing to the form and function of living systems. Here, we translate omics to study battery systems. Using precision analytical capabilities across chemical space, we delineate the structure, function, and evolution of interfaces when cycling Li-nickel manganese oxide (NMC) 811 cells at high power and voltage with mixed salt, locally super-concentrated electrolytes.

  Despite differences in their makeup, top-performing electrolytes converged in their cathode-electrolyte interface chemistries, which were unexpectedly enriched with fluoroethers and depleted with LiF—showing upregulation versus downregulation. Moreover, these atypical CEIs more effectively suppress leakage current, cathode corrosion, and cathode fracturing, extending battery life.

  Sam:
  All of you scientists out there and all of you biologists 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 Matt shared, we’ll have a link in the show notes.

  Let’s get right back into Mike’s breakthrough right after this short break. Don’t go anywhere.

  Pete Mathias:
  Hey, everyone. Just taking a quick break to tell you about the US Strategic Tech Fund from Alumni Ventures. AV is one of the only VC firms focused on making venture capital accessible to individual investors like you. In fact, AV is one of the most active and best-performing VCs in the US, and we co-invest alongside renowned lead investors.

  With AV’s US Strategic Tech Fund, you’d have access to an investment portfolio focused on technologies critical to bolstering US national security and economic prosperity. We prioritize three key areas: homeland security, cyber AI and digital strategy, and space innovation. By investing in companies innovating in these areas, you can support early-stage ventures and help encourage sustained growth and technological progress in the United States.

  If you’re interested in learning more, visit av.vc/funds/strategictech.

  Mike Collins:
  I’m going to stay on the theme of energy. With all the talk now about AI and all the innovations happening in healthcare and scientific modeling, at the end of the day there’s such a strong correlation between a society’s energy abilities.

  When has human progress really leapt forward? Usually, there’s a big breakthrough in energy underneath it, right?

  Matt Caspari:
  Strong correlations to GDP.

  Mike Collins:
  Yes, very strong correlations to GDP. Many really smart people view that as one of the next big bottlenecks and areas where there needs to be innovation, entrepreneurship, and capital—bringing together all the key ingredients.

  Mine today is about some of the advancements happening with what are called SMRs, or small modular reactors. We’ve been following a few companies doing really interesting work in this space, and we think it’s super exciting.

  A couple of key things to keep in mind: the technology behind the big nuclear power plants you see when you drive by is 50–60-year-old technology. The ability now to do smaller, modern designs—and the efforts to create the equivalent of a gigafactory for SMRs—is a really exciting development.

  This is something Elon Musk did with battery technology. He realized that if we’re going to make a huge number of electric vehicles, we’d need a lot of batteries. The solution was to create a modular system that’s super flexible and mass-producible.

  That’s the future for SMRs. In a central location, you can make modules, ship them, bolt one on—something the size of a shipping container—put it on the back of a data center, and have it power a medium-sized city with three of these units.

  Matt Caspari:
  Highly scalable.

  Mike Collins:
  Highly scalable, highly redundant. When you put something on an assembly line and make it modular, you get huge cost and safety benefits. The bespoke, massive, centralized 1970s approach is not where this industry is headed anymore.

  Matt Caspari:
  If you look at the cost overruns and just the overall…

  Mike Collins:
  It’s just crazy.

  Matt Caspari:
  This will be much more capital-efficient for the world.

  Mike Collins:
  This is going to be a global race. We can talk about the international race to manufacture chips or AI, but the countries and communities that figure out how to build SMRs—and produce energy that’s orders of magnitude more powerful than carbon fuels—are going to have a huge advantage.

  It’s a big deal. There’s some really promising stuff. We’re investors in some, we want to be investors in others, but we believe this is really where the future of energy lies. It’s definitely an all-of-the-above strategy, but SMRs absolutely have a place in the energy mix.

  Matt Caspari:
  Yeah, super exciting.

  Sam:
  All right, that concludes our second breakthrough for this episode. Right after this break, we’ll be right back.

  Speaker 5:
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  Visit av.vc/foundation to get started.

  Sam:
  As everyone listening to this podcast knows, I am not a nuclear physicist or nuclear scientist. I looked into SMRs—small modular reactors—that Mike mentioned today. I wanted to define them a bit and explain what they actually do.

  SMRs are significantly smaller than conventional nuclear power plants, with a power capacity of up to 300 megawatts per unit—about one-third the size of traditional reactors. They’re designed to be factory-assembled and transported to installation sites as units, allowing for easier and more efficient construction.

  The key concept here is “modular.” I went to design school, so we learned a lot about modular technology, building, and engineering. Modularity makes things much more personalized for customers or specific users of a technology.

  SMRs offer flexible power generation for a wider range of users and applications. They can be deployed as single or multi-module plants and combined with other energy sources, including renewables. They incorporate safety performance features with inherent and passive safety mechanisms.

  They’re cost-effective and suitable for electricity generation, cogeneration, non-electric applications, and for use in remote regions or areas with less developed infrastructure.

  Another big advantage is environmental impact. SMRs can contribute to decarbonization efforts by providing low-carbon electricity and potentially replacing fossil-fuel power plants. People familiar with this podcast know how important that is to us at Alumni Ventures—we support many companies focused on climate crisis innovation and development.

  So yeah, SMR technologies seem super fascinating. That’s a little bit more about SMRs. Now let’s wrap up this episode with Matt’s final breakthrough.

  Mike Collins:
  So what’s your third?

  Matt Caspari:
  Yeah, my third is somewhat related. Going back to AI—which we know is going to require a lot of power going forward—I saw an article in Bloomberg about OpenAI having developed an internal scale for charting the progress of its large language models.

  They’ve been very clear that their ultimate goal is to reach artificial general intelligence (AGI). Now we have a report outlining a roadmap of the key steps to get there.

  Matt Caspari:
  There are five levels to go from where we are today to AGI. I thought it’d be fun to run through those quickly.

  Mike Collins:
  Yeah, no, I saw this. I thought this was really… Yeah, yeah.

  Matt Caspari:
  For those who didn’t read it, where we’re at today with the current version of ChatGPT, they call that level one. It seems like, and maybe they have it internally, we’re getting close to level two, which would be an AI system capable of matching a PhD-level human when it comes to solving problems. Maybe this will be ChatGPT-5, so we’re close to level two.

  Where we go from there: level three would be an AI agent capable of handling tasks for you without you being there. It seems obvious—you could program your AI with certain parameters, and it would go out in the world and execute those tasks for you.

  Mike Collins:
  Yeah. I’m going to Las Vegas; do everything for me.

  Matt Caspari:
  Yeah. Where it feels like a much bigger leap forward is level four—when your AI is actually coming up with new ideas and concepts. That could be interesting as we think through startups, business ideas, new innovations, and leaps forward in science and technology.

  And then level five is when the AI not only can take over tasks for an individual but can do that for entire organizations. I think that’s an interesting framework—the leap from individual to organizational capabilities—and it raises both opportunities and concerns. I thought it was a cool framework to think through.

  Mike Collins:
  I think it’s an excellent framework. For me, it’s also a good analogy with self-driving vehicles—going from cruise control, to feeling comfortable on the highway but still paying attention, to handling complicated urban environments.

  We’ve been moving through those levels in the past five to seven years. I’d argue we’re probably at the midpoint now—where you can sit in the back seat, say where you’re going, and read the newspaper or work on your phone.

  Matt Caspari:
  At least in San Francisco.

  Mike Collins:
  Right. But we’ve moved through those levels. If we have a similar trajectory with AI—and we’re at one and a half or two now—in five to seven years, if we reach levels four or five, the world changes dramatically.

  That seems like a reasonable pace. It actually feels like it’s moving faster than that. These frameworks are really important for us to understand and monitor. In our business, it impacts how we think about investing in startups today—we have to invest knowing the world might be at level three or four by the time a startup hits its stride.

  Really important framework. I thought that was a great one. It’s probably on my list to share. You beat me to it, Matt.

  Matt Caspari:
  Good, okay. Great minds think alike.

  Mike Collins:
  Excellent. All right, have a good rest of your week. Thanks, everybody. We’ll do it again.

  Matt Caspari:
  Take care.

  Mike Collins:
  Take care.

  Sam:
  Thanks again for tuning into the Tech Optimist. If you enjoyed this episode, we’d really appreciate it if you’d give us a rating on whichever podcast app you’re using, and remember to subscribe to keep up with each episode.

  The Tech Optimist welcomes questions, comments, or segment suggestions. Please email us at [email protected] with any of those, and be sure to visit our website at av.vc. As always, keep building.