A hedge fund legend is psyched about an 'incomprehensible' market opportunity

When a visionary tech investor like Art Samberg throws his weight behind a project you can bet it's going to be something special, but when you are talking about solving the world's energy crisis, perhaps it's time to get really excited.

Since winding down Pequot Capital Management in 2009 - at one time the world's biggest hedge fund with over $15 billion at the height of the technology boom, Samberg reinvented himself as a venture capitalist through family office Hawkes Financial.

And it's the clean energy sector that's taking up his time at the moment, more specifically producing clean electricity, as the biggest investor in Tri Alpha Energy.

With over $500 million of equity money raised already, Tri Alpha made a major breakthrough last year, using plasma technology to control the fusion reaction needed to generate power. While there is still plenty of work to do, Samberg told Real Vision in a recent interview that the firm is well on its way to its goal of producing clean electricity, without a steam turbine, for just pennies per kilowatt hour.

 Helping the World Climb Out of Poverty

"This will solve - truly solve the world's problems. The way we're doing it, there's no radiation. There's very low materials. It's boron, which is scraped off the desert floor and hydrogen-- heavy, heavy, heavy water," Samberg said.

"I don't care what you think about anything. Whether you deny climate change, whether you're for it, there's one indisputable fact. And that is that to get out of poverty, people need energy. And you know there are a billion people in this world living with no electricity, and they live a miserable, miserable life. They burn wood, which is horrific for you."

Samberg explained that a great deal more energy is released in fusion compared to fission and there are no safety concerns unlike nuclear fission. The big risk is that the reaction ceases, with everything just stopping if the gas hits the containment wall, so the key is keeping the reaction stable, which is why the plasma development was so important.

"Nobody has been able to control a plasma in steady state for a long period of time. We have a scientific advisory panel of Nobel laureates, Marshall prize winners, which are the physics equivalent of a Nobel. And they certified that we've done it," Samberg said. "Now we have to tear down the old plant, increase the energy level, and prove that we can scale the temperature up. And we're in the midst of doing that.

$500 Million Venture Will be Bigger Than Big

With this technology, Tri Alpha aims to get the cost of electricity down to $0.02 a kilo watt hour, from an initial $0.05, with no carbon, he said.

"And if you were to just put in a $25-a-ton carbon payment, the plant would come for free, as it turns out. So this is bigger than big. And we're making great progress. You don't raise $500 million from smart people unless there's something there," he said.

The key question of course is will it work. "I sure as hell hope so," Samberg  said. "I've put a lot of effort and money in it. My gut is, obviously, I think it's going to work, or I wouldn't have gotten this far. My education and background says so. Everybody else tries to combine deuterium and tritium…. The problem with that is it's a great science result, but it's highly, highly radioactive. So you've got something that proves fusion, but it's not commercially viable. We went, what is commercially viable? And that is to use hydrogen with boron, which is the next element up on the chart of elements.

"We're just dealing with hydrogen so far. We don't exactly know what's going to happen. We think we know, but we don't exactly know. So there are challenges ahead. And you have to be a fool not to recognize that.

An Incomprehensible Market Opportunity

For now, the focus is on rebuilding the plant to get ten times the level of power that they had originally, which he said will prove their ability to scale the temperature, while it will take around five years from 2018 to build the demo plant. All in all, it could be sometime between 2025 and 2030 before commercial plants will be shipped.

"The market is so huge. It's almost incomprehensible," he said. "We're talking about-- number one and our model will be the Qualcomm model, where Qualcomm came up with CDMA, licensed to South Korea, and the whole cell phone business was born. And Qualcomm is a beautiful company.

"That's a big market, and we all know about cell phones. But there's nothing bigger than power generation. So I won't get into all the numbers. But on a technology licensing model basis, this thing is so big, that it's almost incomprehensible. And it's also a cool thing because it really is very rare where you get to number one, I like monopolies, if I own the monopolies.

"So obviously, as a capitalist I like this. But it's also great to be out in front of something that's so important scientifically, and it's so important to the welfare of mankind. Whether you deny that carbon is a big problem today, any rational person looking at this thing and stepping back will say, someday this is untenable. And so any solution to that, that's a great thing to say I was a part of."

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