Why a Once-Dominant Rocket Maker Is Trying to Catch Up to SpaceX

[00:00:00] It's 4am and you're sucking baby snot through a tube because she's congested. If you love her that much, love her enough to make sure she's buckled in the right car seat. Find out more at nhtsa.gov slash the right seat.

[00:00:11] Brought to you by the National Highway Traffic Safety Administration and the Ad Council. Welcome to Tech News Briefing. It's Tuesday, July 2nd. I'm Zoe Thomas for The Wall Street Journal. Big tech companies are looking to buy nuclear power directly from plants.

[00:00:30] We'll tell you why and what that could mean for the power grid. And then, United Launch Alliance was formed in 2006 when Boeing and Lockheed Martin fused their rival space launch businesses. For years when the Pentagon needed a launch, ULA was on speed dial. These days, things are different.

[00:00:49] Our reporter Micah Maedenberg will join us to explain what's changed and the challenges the company is facing with its new rocket. But first, new data centers needed to meet the demands of the artificial intelligence boom require a lot of power.

[00:01:10] And tech companies have zeroed in on a key target, America's nuclear power plants. Here to tell us more is our reporter Jennifer Hiller. So Jennifer, why has nuclear power in particular caught the eye of tech giants?

[00:01:24] There's a few things that make this a good matchup for both sides in a lot of ways. The nuclear plants have really struggled in this country, the ones that operate in competitive power markets for several years.

[00:01:36] And it's only been in the last few years that we haven't seen those plants closing down. So in some ways you have a wealthy customer in the tech companies that can help support

[00:01:47] the ongoing operations and relicensing and just work that needs to go on to keep the nuclear power plants that we have online. Nuclear power is also very consistent compared to other kinds of electricity generation. It's on more often, essentially.

[00:02:05] It's not on all the time, but it's on most of the time. And data centers need very consistent power supply 24-7. What concerns are being raised about big tech companies taking up the nuclear power supply? Yeah, there are definitely consumer advocates and ratepayer advocates and some lawmakers

[00:02:22] in different states that are raising questions about this because it essentially takes power out of the competitive wholesale market and diverts it directly to a data center. And so you would have less power going into the wholesale market. That could raise prices.

[00:02:40] And we're also at a time when in a lot of parts of the country we're seeing reliability risks increasing, and there's a lot of new users of power, including data centers. We have transportation that is connecting to the grid, new industrial and manufacturing

[00:02:57] that wants to connect to the grid as well. So there is just a big power demand going on broadly. And so a lot of people are wondering sort of what happens to everybody else if you can

[00:03:07] have a wealthy user come in and cut a direct deal and put a data center next to a power plant and take that power directly. Jennifer, you reported that Amazon Web Services is nearing a deal for electricity supplied

[00:03:23] directly from a nuclear power plant on the East Coast with Constellation Energy, according to people familiar with the matter. And in a separate deal in March, AWS purchased a nuclear power data center in Pennsylvania for $650 million. What kinds of concerns has this raised from government and local officials?

[00:03:44] A lot of it is just that this is a relatively new thing, and people don't know that they understand all the ramifications. But a lot of it is just that it is a startling and new amount of power use.

[00:03:58] And you've never before seen a kind of customer that can go directly to a power plant and say I would like to buy everything that you can give me, and I will take an entire reactor's worth of power.

[00:04:12] What has Amazon said about its purchase of the plant and nuclear power use generally? So Amazon is a large buyer of renewable power. They fund a lot of wind and solar projects globally, and they're just an enormous backer of renewable energy.

[00:04:29] But they need more power than that is able to supply. And so the company has basically said that they are looking for all different kinds of ways to source clean power, including through nuclear. That was our reporter Jennifer Hiller. Coming up, a once-dominant rocket maker is playing catch-up.

[00:04:48] We'll tell you about United Launch Alliance's struggles and how SpaceX pulled ahead. After the break. It's 4am and you're sucking baby snot through a tube because she's congested. If you love her that much, love her enough to make sure she's buckled in the right car seat.

[00:05:10] Find out more at nhtsa.gov slash the right seat. Brought to you by the National Highway Traffic Safety Administration and the Ad Council. When the Pentagon needed to get a satellite into orbit, United Launch Alliance, for years, got the call.

[00:05:28] Now that position has been usurped by Elon Musk's SpaceX. ULA bet big on a new rocket called the Vulcan Centaur. It hired Blue Origin, the space company founded by Jeff Bezos, to supply Vulcan with new engines.

[00:05:42] And the rocket is designed to reach near-Earth orbits as well as targets in deeper space, making it ideal for government missions. But the vehicle is years behind schedule, raising questions about the company's future and national security concerns.

[00:05:58] Here to tell us about this is our Business of Space reporter Micah Maidenberg. Micah, what are some of the challenges Blue Origin has been struggling with around the Vulcan Centaur rocket? ULA buys engines to install on Vulcan.

[00:06:12] The BE-4 engines that Blue Origin manufactures are a critical component for the Vulcan launches. A big challenge for Vulcan Centaur over the last few years has been engines, has been Blue Origin's ability to manufacture and deliver the engines that every single Vulcan needs to get off the ground.

[00:06:37] Blue Origin has been behind on delivering these engines, on making them. Like, I mean, it's not easy to design and then manufacture rocket engines at scale. Blue Origin fell behind on where they thought they'd be with doing exactly that.

[00:06:54] Vulcan has flown one time so far, that was earlier this year. But ULA had hoped to fly years ago, and executives at ULA have said the engines and engine deliveries are the long pole in the tent, as people say in the space industry.

[00:07:11] The thing that's sort of holding up the overall program. Blue has more recently delivered a number of sets of engines to ULA, and ULA says it's going to be able to launch three more Vulcans this year.

[00:07:25] So that's a big deal, and that's been a long time coming to start to get to that higher rate of production of the engines, delivery of them, and then for ULA, launching the rockets.

[00:07:38] Ultimately what ULA's customers want very much from ULA is for them to be flying Vulcan regularly, time and again, over and over. The company still has to prove that they can do that. Some of that, the most intense pressure on that front has been coming from the Pentagon

[00:07:55] and that national security client or customer that ULA has been tied to for so many years. What has Blue Origin said about the engine issues? Blue says that they're turning the corner, that they've been delivering engines to ULA

[00:08:10] and that Vulcan already has enough for its next three flights this year, and that they have dozens of more of these engines in flow in the factory, and that the scaling effort to sort of get more engines built and tested and out the door continues.

[00:08:29] So that's still the challenge at Blue is to scale up, but they say that they're working that every day. Where do things overall stand with the Vulcan Centaur now? So Vulcan is in arguably a better place than it was earlier this year.

[00:08:43] There's more visibility right now for Vulcan. Three launches are expected this year. The next one is in September. But the ongoing challenge will remain into 2025 is scaling up production of the rockets for Blue, production of the engines, and for ULA, integration of the engines and rockets

[00:09:04] on the launch pad for actual operational missions. Let's talk a little bit about the broader market that this exists in. ULA had a monopoly on this space until 2016 when SpaceX broke through and won its first contract with the Air Force.

[00:09:21] What has SpaceX done differently and how has its status changed since then? ULA was formed by Boeing and Lockheed to really serve government customers, especially the military. You took two rival launch businesses, turned them into one, and they essentially, they did have this almost monopoly for years.

[00:09:41] And SpaceX, meanwhile, was the upstart. For a long time, ULA was blasting off some of the government's most sensitive satellites on very high stakes missions and SpaceX wasn't in orbit yet. But they got there. They developed their rockets, they focused on reusability, and they've shown an ability

[00:09:58] to turn those rockets really quickly. SpaceX now is known for launching quickly, rapidly. Their flights are often cheap or cheaper than competitors. And that's been very attractive to government customers, especially in the military.

[00:10:18] Military officials don't want to be tied to a single company for pretty much any kind of component or service or what have you because it creates risk. You want to have backups and SpaceX's ability to charge into the market, develop its technology

[00:10:34] and fight some of the kind of policy and political battles that it took to get into launching national security payloads are really a huge part of SpaceX's own kind of company story over the last 20 years.

[00:10:49] But in the last few years, as ULA hasn't had Vulcan ready to go, SpaceX has really been able to step in as the Pentagon's chief launcher. And that's what ULA is pushing to change. That was our reporter Micah Maidenberg. And that's it for Tech News Briefing.

[00:11:08] Today's show was produced by Julie Chang with supervising producer Kathryn Millsop. I'm Zoe Thomas for The Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.