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This is Wall Street Week. I'm David

Weston bringing you stories of

capitalism. If you can think it, you can

code it. Generative AI brings the brave

new world of Vibe coding to a project

near you. Plus, we're going to need a

lot more power to run all that new Vibe

coding. And it turns out that we may get

some of it from the ground under your

feet. And Las Vegas, it's not just for

gambling anymore.

But we start with the Fed, which held

its monetary policy meetings this week,

even as it waits for its new chair to be

confirmed by the Senate. Glenn Huard was

the head of President George W. Bush's

National Economic Council and then went

on to run the Colombia Business School

where he is now on the faculty.

>> So Glenn, we had the the Federal Open

Market Committee meeting and we heard

from Chair Powell. Uh they basically

didn't do anything. Uh did they have a

choice?

>> No, but but I think they did do a few

things. So they certainly didn't change

the funds rate. I don't think anybody

expected that or at least reasonably.

The battle, of course, the dissents that

happened were over the Fed's statement,

or at least what people perceive the

Fed's statement to be. Is there an

easing bias? Is there a tightening bias?

I think it's fair to say under the hood,

members of the FOMC are conflicted. Some

view that the next move is going to have

to be flat for an extended period,

possibly even up. Others, like Governor

Myron, have a different sign. So, that's

really what happened. One of the things

I couldn't figure out is the easing bias

language that they descended from the

three members. I looked at the statement

carefully. I didn't find those words in

there.

>> No, I I don't think it's there in in

black and white. I I think probably this

is a reading the room kind of

observation of people going on record

that we we really are uncomfortable with

a view that it at the next FOMC meeting

or maybe even the meeting after that

that a cut is forthcoming. Uh they did

say in the statement that there was

extreme uncertainty coming out of the

Middle East because of the Iran war. Uh

is that what is driving the concern

about about rates or was there a

pre-existing issue with inflation?

>> I would have to give you the classic

economist answer of yes and no. So yes,

the uncertainty is a problem. Oil prices

are high. The US economy is less

energyintensive, but will still raise uh

at least headline inflation. Let's

remember inflation was stuck well above

the Fed's target. before February 28th.

So Iran adds to the problems the Fed

faces, but it's not really the core

problem. I think what's vexing the Fed

is why it was more difficult to get

inflation down before Iran. But yes, the

uncertainty matters.

>> What about inflation expectations?

Because I've seen some indications now

they may be rising in the United States

and even in Europe.

>> So far, I think they're relatively

anchored. That's a good news for the Fed

and that's far more important for the

Fed than whatever the inflation number

by whatever measure they look at is

today. But I think the risk is if the

war continues and prices remain elevated

and of course we still have tariffs

working their way through the system

even if the ultimate effect is to

stabilize. Uh that's going to be an

inflation problem and that could unhinge

expectations.

>> So what does this mean for the new chair

coming in Kevin Worsh?

>> Good luck. I mean Kevin Worsh is

actually well suited for this moment. He

has outstanding small P political

skills, consensus building skills. He's

very smart. He knows these issues. I

think his challenge is going to be

looking at the men and women around the

table, whether it's the governors or the

FOMC, and figuring out how to bring them

together. That's going to require two

things. I think one is his skills, which

as I said he has, but another's the

theory of the case. I mean, how do you

talk about the economy? I think that'll

have to be job one for our new chair.

>> Some are interpreting that threeperson

descent as putting a marker down really

almost against President Trump uh with

President Trump's pressing for lower

rates. So, don't go too far too fast.

>> I'm not sure that that's true. I mean,

it is true President Trump would prefer

lower rates. He certainly has told us

all that. Uh I think it's more a matter

of a sincere difference of opinion and

policy. And given where we are right now

with the labor market softening a

little, yet we have a robust economy,

inflation is stuck, you can see why

people are wondering, is the glass half

full or half empty. When you have

uncertainty more often than not,

watching and waiting until you get more

information is the right answer and I

think it is here.

>> Is it a symmetric risk right now as you

look at it or or is there a real risk of

stagflation where you actually could

hurt growth and still have inflation?

Well, there's certainly a risk of

stagflation, but I would be more worried

about inflation at the moment. The

underlying economy is very good and the

the GDP numbers we got for the first

quarter are reassuring still about the

pace of AI investment and about final

sales even though the headline print is

a little below expectations.

>> Kevin Walsh comes in saying that he

thinks there is a room for rate cuts

because of AI. How does that work?

Well, the story if it's correct is what

I would call more of a long run story.

So AI in the long run uh certainly has

the potential to be disinflationary. It

reduces the cost particularly in service

producing sectors. Think about the cost

of producing what lawyers do or

accountants do or engineers or dare I

say economists. That could all be

disinflationary. The problem is that's

not today and it's not tomorrow and it

may not even be a year or two from now.

The immediate effect of AI is the

aggregate demand effect of building data

centers. The investment numbers that

showed up so robust in in GDP. All else

equal that raises not lowers the real

interest rate and inflation is stuck. So

I think um incoming chair Worsh's story

makes sense as a potential longrun

hypothesis. I don't think it could be a

theory of the case for cutting rates

now. to cut rates. Now, you'd have to

have a view that the economy's weakening

is such that that trumps small T, the

inflationary pressures.

>> There are other parts of the Fed's job

besides just rates. Uh what do we expect

from Kevin Wars's chair in the other

parts?

>> Well, I think he's signal that he wants

to take a look at least in a couple of

areas. One is the size of the Fed's

balance sheet, which of course ballooned

enormously since the global financial

crisis. That's not really as simple as

saying, do I want a big balance sheet or

a small balance sheet because the Fed

has proven to be the market maker of

last resort in the Treasury market

multiple times and the Treasury market

is the market for the world's safe

asset. Regulation perhaps unwittingly

made it hard for private market makers

to do the job they could be doing. So, a

Fed balance sheet is pretty important,

but I do expect Kevin Worsh to spend a

lot of time there. The other is

financial regulation. Especially since

the global financial crisis, the Fed got

more territory in financial regulation.

So there may be a look, do we have the

right rules? Do we have the right

capital regime? I would expect uh

incoming chair wash to take a hard uh to

take a hard look at that. A warning

though, regulation unlike monetary

policy is a political subject and so do

expect Congress do expect the president

to with good merits have political views

to balance. A

>> further question that's been raised by

some other members of the Fed right now

is the relationship of the regional uh

Fed to the national Fed in fact maybe

there should be more power or authority

or responsibility taken into Washington.

Does that make sense?

>> I don't think so. So I I think the

decentralized structure of the Fed is a

feature not a bug. Remember the history

lesson for the Fed is it was done to get

points of view throughout the nation.

We're a nation of different business

sectors and different geographies. That

said, there is a point that I think

regional presidents may be communicating

too much in any organization.

The top of the organization needs to set

the tone internally and externally. So

having a lot of debate inside strikes me

as a good thing. Doing it out in the

press or on television, I'm I'm less

persuaded that's a good thing.

>> There's a good deal of talk about what

uh a chair war will do in terms of for

example forward guidance uh and even

number of news conferences that are held

the dot plot things like that. How much

of that is in the authority of the

chair? Does that need to be voted on by

the full fed?

>> Well, he would need to get his

colleagues support, but I I suspect he

could get it. I I count myself as among

those who wonder what the utility of the

dot plot is and the excessive

communication. There's a continuum if

you will. Chair Greenspan was quite

opaque. He famously said, you know, if

you thought you understood me, you must

be mistaken to chair Bernani who was

extremely transparent. I think probably

an incoming chair Walsh wants to be

somewhere in in between there. One thing

that incoming chair wars will have that

has not been had for a very long time is

a former chair sitting in the room at

least for some period of time. What will

that do to that dynamic do you think?

>> I'm not sure it's actually going to do

very much. Uh I think chair Powell's

current chair Powell's points of view

are well known. He said them many times.

I expect he'll repeat those uh as a

governor in the time he has left. Uh I

think he also is somebody who would be

differential in the way he would be to a

new chair. So I I don't think it's going

to change things very much. Whether he

leaves is a personal decision and he'll

have to make it.

>> The independence of the Fed really

>> We also spoke with former US Treasury

Secretary Hank Pollson about the

challenges facing the next Fed chair.

Pollson agreed that Worsh has a hard

road ahead, but that he is up to the

task. When you have a chairman of the

Fed, you want someone who understands

markets, who is a good communicator, has

a a a good understanding of sound

economic principles, and I think Kevin

Walsh meets those tests, right? And he's

been before he's done it. Now, I think

his job becomes more difficult because

there's independence and the perception

of independence. So I think how this

transition between J Paul who's just

been a star performer and got great

credibility and integrity. I think how

that transition is handled and how the

administration deals with it is either

going to make Kevin's job more difficult

or you know somewhat easier. But Kevin

won't have an easy job anyway. And you

know, I compliment the Trump

administration on selecting him. Right.

>> Coming up, AI may be coming for a job

near you, especially if you're a

computer programmer.

This is a story about a double-edged

sword. At this point, AI is promised to

do just about everything. But it turns

out that it's best at creating the very

thing that it is made of, code. It was

once considered a high-skll task, but

coding is now accessible to just about

anyone with the help of generative AI.

On the one hand, this unlocks

possibilities for creating a wide range

of products and businesses that

otherwise might never have seen the

light of day. On the other hand, it's

made the future less certain for those

who write code professionally. Our

colleague Ed Ledllo brings us the story

of what happens when we lean in and let

AI do the work.

In Upper, West Virginia, Jamie Grove

owns a boutique warehouse helping

clients ship out anything from dinosaur

bones to board games. Last year, he

built software that automates shipping

out packages with help from AI.

>> Where's the uh order at that you're

looking at there? There's absolutely no

way I could have done any of this

without AI. For the initial run to take

some spreadsheets that we had that we

were working with to get an actual

workable sample ready to go took me less

than a day and we were live and we were

using it right here in the warehouse

>> in Oakland, California. Cynthia Chen

wished there was an app that collects

pictures of different breeds of dogs.

>> And then it was when I learned about

vibe coding online is when I thought

maybe I should try it myself.

The first time you see like this little

popup and it says build succeeded and

then you can see the app pop up and you

like it's actually real. That was like

the sort of magical moment where I was

like oh my gosh this is crazy. I can

actually build things myself.

>> The term vibe coding was coined by Andre

Karpathy, a founding member of Open AI

to describe a process of computer

programming akin to having a

conversation with a robot. Here's what

it looks like in practice. Say I want to

create a website that visualizes and

animates a data set. I would use a

generative AI tool like Claude or Codeex

or in this case Gemini and tell it

exactly what I want using plain English.

AI then writes the code for me. And as

coding has gotten easier, it's led to

the creation of more code than ever

before. Activity on GitHub, the platform

used for storing and sharing code, has

seen a massive increase in activity,

surging in early 2025 when AI coding

pilots became popular.

And although Vive coding has helped

small businesses and hobbyists create

their own software, it's the

professionals who are leading the way.

So what goes on in this building is we

have a mix of folks working on Google

Cloud. At Google, when we talk about

autonomy and agentic engineering, we

have systems that allow you to kind of

have almost a virtual software engineer.

Hold on. If all these brilliant

engineers are using AI in this way, what

is it that they're doing all day long in

beautiful buildings like this one?

>> Excellent question.

>> Adi Osmani is the director of Google

Cloud AI. He oversees teams of engineers

currently building the next generation

of AI tools for businesses.

>> So if you are vibe coding, you're pretty

much just giving into the vibes. You

don't necessarily have a clear full idea

of your vision. You're just working with

the LLM. You're trying to get somewhere

with it. If you're engineering, that's

where you have to apply rigor to it. You

have to have this clear set of

requirements. You are testing. And

whether you are a startup or whether

you're in a big enterprise right now,

the role of the software engineer is

going to be evolving to one where you

are increasingly a little bit more of a

manager, you're going to have

effectively like a virtual team of

agents that you're responsible for and

you have to own the outcomes. Doesn't

matter how many

>> responsible for the output.

>> You're responsible for the output.

Exactly. And so you need to decide like

how am I evaluating quality? How much

time am I going to spend evaluating

quality? Because there are some people

who very much enjoy YOLO. Like, okay,

well, the agents ran overnight, looks

good, kind of runs, I'm just going to

deploy it. But if you're building any

kind of serious software, you still need

to have some idea of like what is what

is the quality bar? What are my quality

gates? How am I making sure this is

actually going to meet um the needs of

my users in a consistent way?

For the engineers at Google's

headquarters here in Sunnyvale,

California, Osmani says AI isn't just

making their lives easier, it's making

them better at coding.

>> The extension of that question, which

will be posed largely by investors, is

how do we measure the productivity gains

of that engineer or that team?

>> I remember in the earlier days of AI,

you know, org leaders would look at

things like, oh, hey, well, how many

lines of code are being generated,

right? is not not in any way a good

proxy for productivity but these days I

think that people use a mix of different

kinds of metrics you try to use

qualitative and quantitative generally

speaking there's a big productivity

boost in the earlier days of AI would

have said you know that boost is 10 to

15% these days it's anywhere from 30 to

50% and I see that number only

continuing to go up

at MIT Frank Nagel and a team of

researchers surveyed over 187,000 and

software developers who are using GitHub

Copilot, a generative AI tool for

coding. And they found that workers are

more productive because what they spend

time on has changed.

>> I think one of the big things that we

often think about with AI is that it's

just going to enhance productivity,

right? It's going to make us faster

doing whatever it is we do. Um, but

that's just really just scratching the

surface. You have 100% of your time that

you allocate to work. How did that break

down along these dimensions of what we

called core work, actual coding versus

more project management type of work?

And what we found is that when uh coders

started using these types of tools, they

massively shift the amount of their time

that they allocate to coding and they

take away a whole lot of their allocated

time towards from project management.

And so part of the reason we think that

this is happening is that if in the old

days you were writing piece of code A

and that piece of code was dependent on

some other piece of code B, you had to

wait for that other person. You had to

interact with them and make sure that

everything worked together. Whereas now

you can just write it all yourself.

This productivity boost is particularly

true for those who are writing and

deploying brand new code and especially

those with no knowledge of code

whatsoever, including creatives like

Chen. This is Press Petals, the new app

that I'm working on. And here is a press

flower. So, I'm going to go to um the

claude code that I have running. And

then I'm simply going to describe what I

want it to do. I actually tried a whole

bunch of tools in the beginning and this

was about a year ago which I think is

like feels kind of like the stone ages

of vibe coding. I was able to make the

foundations of the app in maybe a month

and as like a totally non-technical

person I was actually able to like build

a full stack app. So there's like front

end and backend capabilities and I was

able to get it out on the app store just

entirely myself.

For business owners like Grove, his

vibecoded solution is helping his

warehouse save on costs. We have three

main coding solutions here that we've

used AI for. One is to create batching,

which is the important part in terms of

taking orders that are different and

getting them all together into groups

that make that easy to pick. And then

the other solution that we have is

inventory tracking. So that's a a

standard warehouse feature, but our

clients are also very different. And so

trying to force a client into a single

inventory tracking system is really

difficult. So we actually we used AI to

build a inventory tracking solution that

allows them to be themselves basically.

So I have a pretty varied background. I

started out as a programmer a long long

time ago but even someone who is a a

very uh fast coder could not have built

all these solutions. Impossible. If I

were to do it with a team of

programmers, I could have five

programmers working on this full-time

and still not deliver as many results.

If I were to install a software system

that does everything that we're doing

now, uh let's just say without all the

customizations and all the the

flexibility, we might be talking about

an annual license of anywhere between $6

and $10,000 a year, scaling all the way

up to maybe $30 to $50,000 a year,

depending on how much volume we push

through our warehouse. This doesn't have

the flexibility uh that we would want

and it's expensive. Like for a small

boutique warehouse, that's a big

expense.

Now, for about $20 a month, business

owners like Grove are building their own

software solutions. And whilst that's

opened up new possibilities, there is a

downside. Since 2022, employment for

software engineers right out of college

has fallen by nearly 20%. Nagel thinks

companies are making a big mistake.

>> I do think that one of the biggest risks

of the whole thing is that people are

going to get too focused on the short

term and not think about the long term

enough. First of all, if you don't hire

any new people, who's going to run the

company in 10 to 15 years? Uh but second

of all, our research and and others has

shown that these junior people are

actually the ones who are able to change

their job and and get the most out of

using these tools. And so if we're not

hiring them at the same rate we were

before, uh, then we're not going to be

able to take advantage of that.

>> And Chen agrees.

>> I feel very strongly that this is like

not replacing engineers. I think the

more you use AI to build, the more you

understand the space and kind of even

know what you can and can't do. It's

like technically I can make it, but an

engineer probably could have made this

in a much shorter timeline and probably

with like much more robust code.

>> From the business standpoint, I do think

there's this opportunity where companies

that have been thinking about things

like reverse mentoring where the younger

folks can help the more experienced

folks learn how to better use these

types of tools while the experienced

folks are able to better help the the

younger folks understand how the

industry works.

If AI can write code, then what is the

role of the software engineer? Osmani

says today it's all about quality. If I

want to build a robust engineering

artifact, something that's going to last

time, something I can ship to hundreds

of millions of users or billions of

users, there are a lot of things that it

needs to factor in. And so what people

in buildings like this are doing all day

long are trying to make sure that the

code is actually meeting that quality

bar so that when we do ship something to

you that happens to be using AI behind

the scenes, you're actually getting what

you want. That's the important thing for

the users at the end of the day. They

don't care if a human has been authoring

it or AI has been authoring it. Does it

help them get the job done in a reliable

way?

>> Is vibe coding a term that's therefore

used? Is it banned within?

>> Absolutely not. I think that vibe coding

has a lot of value. VIP coding is

enabling people to go from idea to

execution faster than ever. And it has

completely changed how many teams

approach prototyping. You know, so many

times in the past in Silicon Valley and

lots of places, if you had an idea,

you'd go through weeks or months of just

discussing or debating like, hey, can we

afford to build this? Now, you can just

build it. And I think that it has a very

concrete place um in our our our

language. Now, it's just important that

you understand that vibe coding a thing

does not necessarily mean that you have

a production ready artifact that's going

to be battleh hardened.

>> In Silicon Valley, the test of AI's

progress is true autonomy. to start a

project in the evening and wake up in

the morning to code written autonomously

by an AI agent. A dream for senior

software developers and perhaps a

nightmare for entry-level computer

engineers who would have once done that

work themselves. But for us non-coding

mere mortals, the moment could be ripe

to do what mankind is best at, building

and creating.

Up next, journey to the center of the

Earth, or at least toward it. Geothermal

may be an important part of what gets us

the energy we need to power all that AI.

This is a story about resourcefulness.

In the quest to feed AI data centers,

the US is looking to get more power from

just about everywhere it can. From

fossil fuels to wind and solar to

nuclear. But it turns out that an

important part of the puzzle lies

beneath our feet. Our colleague Michael

McKe takes us into the promising and

developing world of geothermal energy.

This is not a gold mine, but in an age

of power- hungry data centers desperate

for energy, it might be even better. So,

what are we looking at here?

The OMAT geothermal power plant in

steamboat where we have to generate

electricity.

How much electricity do you produce

here? In the entire Steamboat area, uh,

we've produced between 80 to 90

megawatt.

>> That's enough to power more than 50,000

homes, a small city. Orat Technologies

is one of America's largest geothermal

companies with plants throughout the

Southwest, a hot bed of the country's

geothermal activity.

>> These are the heat exchanger.

>> Duron Blashar is the company's chief

executive.

>> We operate 24/7 every day, regardless of

the sun, regardless of the wind. H and

that's the main benefit that you get

from geothermal a steady 24/7

electricity.

>> Led by the hypers scaling of AI

installations, electricity demand in the

US is projected to grow by as much as

20% over the next decade. Analysts say

that means the country needs an all of

the above approach to power generation.

And on the list of potential sources,

geothermal stands out for being a clean

source of constant or base load power.

>> We need base load power. And that's the

the sweet spot that that geothermal

brings us. You don't have to worry about

it if the sun's not shining, if the

wind's not blowing. It allows that base

load that every grid needs to uh to

operate. So far, geothermal is just a

small piece of the US power generation

mix, producing less than 1% of total

utility scale electricity. But demand

and technology are changing the outlook.

>> Geothermal energy is the heat of the

earth and it's been used for millennia.

Hotring systems were used by the cavemen

to to cook their food. Until now, the

industry has largely been confined to

the rare places where hot water and

permeable rock come together in

underground reservoirs like this site

outside of Reno, Nevada. Now, enhanced

geothermal systems or EGS have the

potential to give nature an assist. Much

of the work has been pioneered at Utah

Forge, a Department of Energy funded

field lab. Joseph Moore is its principal

investigator. Emmeritis.

>> The conventional geothermal systems,

these are also called hydrothermal

systems or hotring systems, have the

natural fractures that allow water to

move through the rock, extract heat, and

then come to the surface. Enhanced

geothermal systems are not associated

with hot springs. These are areas where

fractures don't extend to the surface

and are not abundant enough to allow

water to circulate in the subsurface. We

have to make the fractures in order for

the water to move through them. And this

can be done almost anywhere in the world

if we drill deep enough to reach the

temperatures that that we need.

Typically, these temperatures are in the

order of 400 degrees F and and higher.

>> To do that, EGS companies are turning to

the oil and gas industry, which

increased production by inventing the

technique of fracking.

>> The fracking actually creates that

permeability that you need to flow the

water through the rock in order to

harvest the heat.

Cindy Taff is the CEO of Sage Geos

Systems, a next-gen geothermal and

energy storage company. After spending

35 years at Shell, she is now using her

knowledge of oil drilling to partner

with Ormat.

>> We're going to be drilling adjacent to

their conventional geothermal field and

then putting our production, which will

be hot water, into an existing power

plant. And the reason why we're excited

about that is it it expedites our

ability to have a commercial project by

at least a year and a half because we

don't have to acquire land. We don't

have to build a power plant. We don't

have to have a grid interconnection.

We're going to be drilling the wells

later this year, if not early next year,

depending on the permitting timeline.

And we're going to be flipping the

switch in 2027.

And so this partnership is really going

to open up the ability to scale

commercially around the world because of

Ormat's footprint.

>> If Sage can provide the hot water, Ormat

will use it to generate power. We signed

with them a collaboration agreement

basically allowing us if that once they

are successful to use their technology

and build a power plant. Joining forces

with Sage having them bring the

experience and knowledge from the oil

and gas industry combining with the

geothermal that we bring. We do believe

that we get a a winning partner. As the

technology begins to prove itself, other

private capital is moving in behind it

with next generation geothermal

attracting more than one half billion

dollars since 2021.

>> A company called Fervo now has uh has

their drill site located very closely to

the Forge site. They're drafting off of

that that new technology. It's gotten

better and faster and cheaper already.

And uh and and so that's that's how

these things are working together. Now,

Fervo has a 400 megawatt plant that

they're building right now, which is is

incredible. The investments are there,

and so it's it's going to take less uh

subsidies uh because these companies

don't need the subsidies. They just need

the power and they need it really

quickly.

>> In Utah, Governor Spencer Cox wants to

make his state an energy and business

hub with geothermal an important part of

that plan.

>> We understand the demand for energy

right now. It's why we in Utah I

launched something called Operation

Gigawatt about 2 years ago. We know we

have to double Utah's energy production

over the the next few years in order to

compete with the the rest of the world

and to make sure that our citizens have

the uh the technological advancements

that are happening out there and that

they have low cost. It helps Utah and

Nevada that much of the land where EGS

geothermal can be developed belongs to

the US government and the Bureau of Land

Management is making more of that land

available. demand is running ahead of

supply. Average leasing prices paid

surged almost 300% last year.

>> That's one of the things that we're

finding out. Look, there are a lot of

states who give giant subsidies away to

attract businesses. We're we're not like

that in the state of Utah. We do have

some subsidies like like every state,

but we understand that what people

really need is is speed and they need

asurances that we're not going to pull

the rug out from under them, that we're

not changing our regulatory scheme every

few months. That it's a place where it's

easy to do business and deploy capital.

>> Geothermal is also politically

palatable. At the same time that

Washington is opening up more land for

geothermal development and continuing

tax credits supporting it, it's pulling

back support for wind and solar.

>> It's one of those rare forms of energy

where there's no opposition at all. The

far right is opposed to uh is opposed to

wind and and and some solar. Um the left

is opposed to uh to to coal and and some

nuclear. Um fi finally we have this this

energy source that everybody believes in

that everybody loves. We just didn't

have a way to produce it at scale in

enough places and uh and because of

human ingenuity because of uh of this

abundance mindset that we're starting to

get as America again we're getting base

load power at scale that prices are

coming down because the technology is

getting easier and cheaper and faster.

Still, as with any source of power,

there are risks that come with

geothermal energy. Most important,

concerns over access to water and its

use. TD Cowan sustainability and

disruptive technology analyst Jeff

Osborne covers ORMAT.

>> Geothermal historically is, you know,

out in the middle of the desert,

typically in vast uh expanses of land

and uh not the most accessible for

water. Uh so the a big risk for

investors to monitor is is where's the

water going to come from and if we need

an additional water source uh is that

available as a a backup plan and what's

the the cost of that and what's the

political uh ramifications

uh as it relates to uh future permitting

approvals. And so, uh, as we move into

new geographies that maybe are are less

familiar with, uh, geothermal, thinking

like a state like Texas, that the water

availability in West Texas where some of

these data centers are coming in, uh, is

certainly going to be an issue. And so,

uh, that's where learning comes in from

some of these initial projects that are

being done by the likes of Fervo and

what Ormat will have with the Sage and

Swam partnerships. they'll be able to

take some of that data and then

hopefully uh convince a investors but b

uh both local and uh state level uh

politicians that this is something that

should be approved uh to move forward

with. Typically things around uh water

and uh grid interconnection are two of

the the key punch list items that

investors are going to want to

understand.

>> When does it start producing a profit

for investors? Once it starts we can

start scaling which actually is very

soon after this first commercial uh

pilot um I would say we can scale in the

next two or three years to 400 500

megawws that's when the returns will

really come for investors because as you

scale of course you can drive cost down

because of the efficiencies of uh during

scaling we have a term sheet with meta

for 150 megawws for one of their data

centers there already in need for more

power at that data center because uh

some of the solar um production has

dropped out. And so we've got an

agreement with them. We're also working

with the Department of War and they're

very interested in behind the fence

power that's easily defendable and

because a lot of our equipment is below

ground and it doesn't have a big surface

footprint. It will help to solve the

supply demand mismatch that you

currently see in the power markets being

base load. There's a huge demand.

Geothermal is just a huge untapped

resource.

Next generation systems could be a

gamecher in the renewable energy

industry, especially if everybody is on

board.

>> Good news is that Democrats support this

now. So, this used to be just a partisan

issue. It was just Republicans who cared

about this. Now, it's a bipartisan

issue. Uh members of Congress from both

parties are pushing towards this. This

is a technology that is bringing us all

back to the table, bringing us all

together, bringing investment at every

level. And I think the future is bright

for our country.

>> Coming up, playing the odds. Whether

it's in a casino or in what's next to

the casino, Las Vegas is reinventing

itself yet again.

>> Vegas as a whole is extremely elastic.

Vegas isn't going anywhere.

This is a story about taking a chance,

having a shot at wealth and success.

Something at the heart of what many

consider the American dream and

something built into the very foundation

of Las Vegas, Sin City, which for over a

century has drawn visitors from all

walks of life.

What brings me to Vegas? Well,

>> my husband and I were married here.

We're here on a girl's birthday trip.

>> We came here to party. We We partied.

You see, we've got pirates coming from

all around the world.

>> Beneath the bright lights and the

constant buzz of the strip, the city

itself is taking a chance at reinvention

as signs of slowdown in its core

business start to surface. To understand

the Las Vegas of today, you have to go

back to where it all began.

And few have followed that story like

screenwriter and journalist Nick Pelgi.

After the Second World War, with the air

conditioning allowing these places to

remain open 12 months a year and

aviation advancing, it changed the whole

economy of going to Las Vegas and it

allowed people to begin to invest money.

It was the only place in America where

you could gamble legally. Every illegal

bookmaker all around the country, all of

whom were fully operational and had all

the political and police connections

they needed to operate in the open

really. Uh they all went to Las Vegas

where they were legit. It was an amazing

moment.

It was the start of the infamous mob

era, a world pelgi would later chronicle

in the Academy Award nominated film

Casino. Who could resist? Anywhere else

in the country I was a bookie, a

gambler, always looking over my

shoulder, hassled by cops day and night.

But here I'm Mr. Rothstein. I'm not only

legitimate, but running a casino. And

that's like selling people dreams for

cash.

>> All of us have heard about the time of

the mob in Las Vegas. How much of that

is myth and how much of that is reality?

Well, it's it's mostly reality. When it

came time to open casinos, maybe or

expand casinos in Las Vegas because of

air conditioning and the new aviation,

where were you going to get that cash?

Who was going to invest? Banks were not

investing in casinos because casinos

were immoral.

So, you couldn't go to a real bank. You

couldn't go to Jaime Diamond and say, "I

need $200 million."

So the only cash you really had came in

cash from the men who had originally

made their wealth in prohibition. And

they were doing legitimately what they

had been doing basically illegitimately.

It's really a sort of slice of the free

enterprise system at work. And it just

kept getting bigger and bigger until it

got so damn big the government said

they're making too much money. And the

government legalized illegal gambling

and has taken it over and of course not

dealing with it as well as the mob guys

did.

From mob money to corporate capital, Las

Vegas kept evolving. But now in the age

of online gambling, when a casino fits

in your pocket, what's next? Fed

President Mary Daly oversees the Federal

Reserve's Western region. The economy of

Las Vegas is the kind of economy that if

the US sneezes, it usually gets a cold

or maybe the flu. And so we're seeing

some of the things that are playing out

in the US economy play out here in

Vegas. I think that the Vegas residents

are a little worried about that, but you

know, Vegas reinvents itself regularly

so they're not depressed.

>> At the center of Las Vegas's latest

reinvention is entertainment. And one of

the biggest players is the Tao Group, a

hospitality and entertainment company

known for operating restaurants and

nightclubs. Jason Strauss is the group's

co-founder.

>> You didn't start in Las Vegas.

>> No, we started in New York City. Our

first two venues was Tao Restaurant in

Midtown and Marquee Nightclub, which I

I'm proud to say 21 years later is the

longest running nightclub in New York

City history. And we have one here in

Las Vegas.

>> Why did you pick Las Vegas? Because we

mostly think about Las Vegas for

gambling. Well, back then we saw a small

incle of nightife and the need for

stylized dining. It was just starting.

There was a lot of celebrity chefs back

then and nightife was maybe one or two

nightclubs on the strip, but we saw a

real need for it and frankly we were

right. We hit it right on the nose. The

timing was amazing. This is going back

20 21 years. We opened with the first

restaurant and nightclub combination

together. We were the first really to

like merge and marry those two concepts.

And within the first year, we're the

highest grossing restaurant in the

United States. So, we had a lot of

success with that.

>> Tell us about the evolution. I mean, how

fast did it happen? How big has it got?

>> Oh, man. In 20 years, it's been an

evolution. When I was out here, maybe

two or three nightclubs. We now have 16

to 17 venues on the strip, depending on

how you classify a lounge or a day club

or a nightclub. Now, there's this is the

nightclub capital of the world and the

stylized dining capital of the world.

>> Is it continuing to grow? I mean, what's

been the pattern of growth just

measuring by how many people you have

coming?

>> Well, yeah, it has continued to grow.

We're we're dealing with a particular

segment. We we say premium segment

that's really looking for experiential.

I mean this nightclub that we're in

right now, Omnia is the highest grossing

nightclub in the country and we have hit

our best number every year for the last

3 years here in here at Omnia. So this

is a really good indication of where

things are and where it's going.

>> When you say best number, is that both

in total revenue and in revenue per

customer?

>> Gross net sales.

>> Gross net sales.

>> Gross net sales. And you measure also

how much you revenue you get per

customer.

>> Uh yeah, there's a price point, there's

a price per head, but that that differs

on day of the week. You know, there's a

different customer in Vegas every

weekend based on convention scheduling.

So it depends on the time of year, who

the talent is, sort of other factors

that come into town, if there's a UFC

fight in town. So all those things

factor into different sort of per head

uh numbers. A lot of the people who

follow Bloomberg are concerned about

business cycles. They go up and they go

down.

>> Are you vulnerable to business cycles or

are you outside of business cycles?

>> You know, I think we we live in a

particular demo of premium where people

have disposable income for experiential.

So, I think we're insulated a bit, but

listen, Vegas as a whole is extremely

elastic. Vegas isn't going anywhere.

>> Look at this. And now Tao is doubling

down. I get it. Yeah, that' be pretty

nice.

>> Making its biggest bet yet with its

newest venture, Omnia Day Club, set to

open later this month.

>> 46,000 square ft of cabanas, dayb beds,

pools, and up on that platform up there

is our Omnia Sky Deck.

>> Dayclubs have become one of the biggest

entertainment formats in Las Vegas.

daytime party venues that combine

elements of the city's famous nightlife

scene with its pool culture featuring

DJs, cabanas, and high energy crowds.

But even as Las Vegas leans further into

entertainment, the signs of softening

demand are hard to ignore. Visitor

numbers are down 7% in 2025, the

sharpest annual decline outside the

pandemic.

>> There are reports of some softness and

occupancy and things like that. How true

are they? because you monitor these

things. What do you look at?

>> It's definitely weaker than it was last

year and that they have many factors

that are affecting it. There's

international tourism has just dropped

to the United States. Then you have, you

know, the households who are making 50th

percentile or less in household income.

They're just making trade-offs. You

know, they have to. Gas prices are

higher. Other goods and services are

higher. And they get here and they're

like, "Okay, I'm going to pay for this

experience, this show, but maybe I'm not

going to spend as much at restaurants.

Maybe I'll bring food into my hotel

room. And so other aspects of this are

hurting a little bit. But again, Las

Vegas is used to this.

>> In a city built on volume and

discretionary spending, even small

pullbacks can have an outsized impact.

Since the pandemic, Las Vegas

unemployment has remained roughly a

percentage point above the national

average. As you look from your perch at

the the Federal Reserve, at the economy

of Las Vegas, what are the major

component parts? What do you really pay

attention to? There's gaming obviously

and you say not so much gaming, some

other things.

>> Yeah. So, I look at travel and leisure.

So, what are they doing in travel and

entertainment? How are these different

pockets doing? Then I also look at

technology and not so much the coding

and things but the infrastructure. You

know, are they attracting investments in

things like data centers or they have a

technical, you know, interest here? They

want to build technology out because

it's just a great place to put technical

things. So, they're working on that.

Then there's the all the support parts

of the economy that are here to help the

gaming and entertainment industry

thrive. So, even if you're not directly

working in travel and leisure on the

strip, you're actually supporting the

broader economy by doing distribution

and supplies. And so, their economy is

really built on that. But if you ask

what's the one thing they would get

worried about, it's are the flights

coming in? Are the guests coming?

because that drives a lot of their

economy. The technology is something

they looking to build too, but it's not

something that's driving their economy.

>> We see a lot of development always in

Las Vegas. You said it's always

reinventing itself and you always

reinventing big buildings getting torn

down and big buildings bu being built

up. One of the things we've heard is

that Las Vegas has been sort of advanced

in minimizing the regulatory

constraints, the permitting of things.

And we we've talked to people who say

they're building things here much faster

than they would in some other parts of

your district like Los Angeles or San

Francisco. Absolutely.

>> How true is that?

>> It is true. So, one of the things that

we know is that, you know, there's

federal laws about zoning and other

things, but most of the zoning and and

where you can build and how you can

build and what kind of light fixtures

you have to have, that all comes from

localities or states and Vegas because

they need to reinvent themselves and

bring this these new buildings along.

That's part of their attraction. They

have to be faster. They have to be

better. They have to be less expensive.

>> That combination of speed, quality, and

affordability sets Las Vegas apart. And

Jason Strauss says it's why projects at

the size and scale of TA's new day club

can happen here.

>> I don't think I need to tell you

anything more. You can just look at

where we are and how we are just dead

center of the middle of the strip. All

the famous lights and sound that make

Las Vegas strip famous, we're right in

the middle. And here on the Omnia Sky

Deck, you're completely immersed in it.

You can have food and drink. You can

enjoy it any day of the week. Open 7

days a week. And this, we think, is

going to be a really special experience.

>> It's experiences like these that have

long drawn people to Las Vegas, a city

built on reinvention, risk, and the

willingness to take a chance on what

comes next.

>> I think it's the most American thing

we've got,

isn't it? I mean, it's kind of frontier.

It has the cowboy world to it. It's got

everybody's got a shot. It's sort of

like it's America in in miniature

because so many different people go

there, right? From all over the country.

So, it's like an America for America.

That does it for us here at Wall Street

Week. I'm David Weston. See you next

week for more stories of capitalism.