Finding opportunity in volatility, with GE Vernova CEO Scott Strazik
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We're not going to suck our thumbs and cry on our beer as things kind of change. You know, we want to use change as an opportunity to improve. Now, tariffs can create cost challenges. We're not immune to that, certainly in the near term. But again, is that something that we're going to be stuck in the mud over? You know, even in the last five days, there's some learnings that we'll be able to use to our benefit from here.

That's Scott Strasik, CEO of GE Vernova, the energy arm of GE that spun out as its own company a year ago. Scott was initially a guest on this show last year, and I wanted to talk with him again to hear how he's managing amid the Trump administration's tariffs and the rejuggling of global trade.

GE Vrnova had a tremendous 2024 among the top performing stocks for the year, but Scott knows he needs to look forward, not back. We dig into real-time adjustments and steadfast convictions, including how the shifting conversation on climate change hits his planning. His perspective on leadership and on our evolving energy needs is instructive. So let's get to it.

I'm Bob Safian, and this is Rapid Response.

I'm Bob Safi. I'm here with Scott Strasick, CEO of global energy company GE Vrnova. Scott, welcome back to the show. Bob, thanks for having me. I appreciate the opportunity to connect with you today. Yeah. So GE Vrnova is now one year into life as an independent public company, much to celebrate. Your revenue rose to $35 billion in 2024. GE Vrnova was the year's fourth best performing stock.

Again, a lot to celebrate. But in 2025, the external environment hasn't been as friendly. The Trump tariffs have everyone scrambling. Like, how do you think about this moment? How do you think about it compared to a year ago at this time?

Well, you know, our end markets really haven't changed very much, Bob. I would start there. I mean, we continue to see very strong end markets in our larger core businesses and gas power and our electrification and grid businesses. So, you know, we're going to see a lot of

Frankly, you know, there's going to be moments of dislocation between the stock market and our end markets. It doesn't mean that depending on where the tariffs go, that doesn't create an opportunity for us to prove out our nimbleness and managing our global supply chain. And we're going to have to do that. But I think it's frankly an opportunity for us to demonstrate how much we've grown in our first year as a public company to be able to operate in this kind of environment.

So you mentioned the agility that you have, and it's going to be under test, I guess, with sort of the tariffs. How do the tariffs practically impact your business? I mean, you're a global business, so changes in global relationships and reputation, all of that requires some adjustments.

Yeah, I think even if you take a step back and think about some of the stuff I've talked to our investors about on where we want to make investments, we want to invest in our business where we can improve the durability or the resiliency of our supply chain. And that's simply because we have a lot of organic growth that's coming in our businesses, irrespective of any policy changes. Now,

Policies are going to change. They're going to evolve. This is going to force us to relook at where we source certain things. It'll force us to revisit our terms with some of our suppliers in different locations. But we know how to do that. So we don't want to be too fast to respond as we're kind of trying to make sense of everything. But I'd also rather be a company that is quick on its feet in this environment, pressuring

President Trump announced the tariffs on Wednesday afternoon after the market closed. Rest assured, you know, by Friday afternoon, our teams were

actively working evaluation plans of what our alternatives are. Now, it doesn't mean within 48 hours you pull the trigger in a dynamic period of time. So we're working pretty hard right now to figure out what our alternatives are. And with a growing backlog to the extent our backlog is growing so substantially, that also puts us in a privileged position with our supply base to come and say, listen, this is what it's going to take

to keep serving GE Vernova. It's almost like there's been a pullback around the very idea of globalization, that maybe it's not good to be a global organization. Do you...

Think about that. Well, when I think about my first four months of the year, I mean, my first trip of the year was to Singapore and Japan the first week of January. I had a great trip in the Middle East in February, visiting Saudi, Qatar, Dubai, Abu Dhabi. These are all important markets for us.

I think we've got opportunities to serve these markets throughout, and we're going to work really hard to earn those opportunities. At the same time, long before the announcements with tariffs, the reality is

There has been an evolving shift with globalization. There's certainly been a lot of strategic moves towards concepts of decoupling from the Chinese supply chain explicitly. So we've been working that over a long period of time. Now, the last week certainly has been broader than any one country. And with it, it forces you to really revisit it in an even more intimate way what you do and where you do it.

But we can do that. We're capable of taking that on. And I'm highly confident we can use this moment to make ourselves a better company for the long term. You recently launched the company's first global ad campaign, the Energy of Change, around this idea that it's a time of opportunity in the energy sector. Why that messaging now? Does that change at all given the tariffs or that remains as strong as it ever was? Yeah.

I think even more so. This is very much about bringing a new energy to the energy transition. And the reality is when it comes to climate change, as an example, there's a lot of people that go at that conversation with a somber, negative, pessimistic tone that we reject inside GE Vernovo. Think about the hyperscalers, as an example, that care deeply about sustainability and

they need more electricity, they're going to help us move decarbonization technologies left, like nuclear, like carbon capture, that otherwise wouldn't be there. I would make that same argument, although it may not have been the intent of our first global campaign, that we're trying to bring the right energy to this conversation of globalization, too. So you think about India.

most populated country in the world today, it's still getting 80% of its electricity from coal. That's an incredible opportunity for us to serve that market. I was in Saudi in February. They're still getting 40% of their electricity from oil. They want to get to 50% gas, 50% renewables by 2030. We can serve that market. So

I think there's real opportunities for us to accomplish substantive things in the near term, both on decarbonization, but being a leading global company. I mean, you and I were on stage together at the Climatech conference last June, and you talked some about your vision of sort of modernizing the U.S. energy system, energy elsewhere. Climate change seems to be a topic that's kind of less in vogue maybe right now than it was then.

Does that shift your priorities, your plans, or no, you're still committed? That is a priority for you. When we talk about sustainability, we very much talk about it in the context of electrification.

and then decarbonization. And in that vein, it's how do we add more electrons to the world every day while making the average carbon intensity of those electrons cleaner? That's been our guiding true north for over a year. It remains our true north. We do think it's very important that we add the electrons, but we see a lot of ways to decarbonize them as we go. So

I think we remain just as committed today as we were yesterday. And no, I don't see that really changing for us. And when it comes to, say, like wind energy, G. Vranova supplied half the turbines for the largest wind farm project in the Western Hemisphere, Sunsea's $5 billion project in New Mexico. President Trump has sort of bashed wind turbines as eyesores that harm wildlife. Like, does that sort of

I don't know, resistance? Impact?

where you deploy your efforts as a business? Well, I was in Pensacola, Florida last week, which is one of the locations where we make our nacelles for the wind turbines, where all of the electrical equipment and generators are stored at the top of the wind turbine. And this is a facility we've been continuing to invest in. And it's about 700 employees, about 20% are veterans. We're excited about working

where we're going with wind. If I give you an example of something that from an innovation perspective, that's really changed in the last year, we're at a point now with our

wind blade technology, that every blade we manufacture, we use a crawler that crawls through the inside of the blade and takes visual images that we're now leveraging with artificial intelligence to strengthen the quality of our blade manufacturing process. I use that example to just say, we're in this business and we're investing into it. Now, at the moment, truth be told, our North America wind orders are soft.

We expect them to be soft the first half of the year as our end customers get more clarity on U.S. policy as it relates to wind. But we see a role for wind to play, and we're going to be very well positioned to serve that market. Yeah.

You mentioned the use of AI in your wind blades. And, you know, AI requires a lot of energy. G. Vernover, in some ways, has almost been swept up in some of the AI enthusiasm, almost AI adjacent, right? Yeah. Do you worry about, like, an AI bubble or what happens in that industry impacting you?

Well, I think the AI demand cycle is still a small proportion of our overall end markets. So there's a lot else going on here. You have just the development of reindustrialization in the U.S. with manufacturing. For a long time, as we were driving the most efficient global supply chain,

That may have been weighing down electric load growth in places like North America and Western Europe and driving more load growth in China with coal, as an example. As some of that decoupling takes place, it requires more supply chain growth and more locations, and those need electrons.

There's a lot of reasons why we're going into a period of time here that we see electric demand growth being substantial. I analogize that back towards, in the case of the U.S. and Western Europe, more like after World War II.

1945 is the right baseline comparison point on how much more electricity is going to be needed. AI is part of that, but it's one of many drivers. If there is an influx of more manufacturing in the U.S., which obviously the administration wants, all of that manufacturing requires energy to be able to operate. And that is opportunity and growth for you because the system needs more capacity.

Exactly. You have announced investing $600 million in U.S. factories yourself, creating over 1,500 jobs. Yes. How much does GE Vernova need to be an American company? I would say more we need to be a local company for our local markets. I think in your bigger markets, you're going to have a local supply chain to serve that market, local teams to serve that market.

We're a global company where at this moment, one of our most important local markets certainly is the U.S., and that's why we're investing into that market. But we're not going to not invest in some of these other countries that are attractive and markets, too, to be local there.

There have been some speculation that the speed with which U.S. manufacturing can ramp up to replace things that might have come from abroad, that that's going to take a while and there's going to be disruption. Is that something for your business that you see, that you worry about, or is that...

part of the nimbleness, I guess, that you're talking about on the part of your team. We do have a fair amount of industrial footprint in the U.S. that allows us to build on existing assets. So the $600 million investment is...

reinvesting in existing assets, 1,500 jobs to locations that already have the concrete poured. They already have the cranes. They already have the logistics with the railroad adjacent to the factory. So we can move reasonably quickly. Now, to the extent the policy environment drives us towards greenfield investments to reindustrialize parts of our supply chain,

That would take longer, truth be told. And that's a multi-year journey that at this point we aren't necessarily evaluating. But we will keep looking in that regard. But first and foremost, we're going to keep trying to eliminate waste in our existing processes.

and build upon the assets we have. And we feel like that can carry us for a period of time. Now, where we don't have it, as an example, we announced and closed an acquisition of a supply chain footprint from Woodward. That was a vertical supply chain integration of a small part of Woodward's business, but for our gas business, an important part of our supply chain, where we thought it made more sense to just have that internal. Yeah.

How much do you tune your sort of long-term decision-making when there's, you know, noise and change and pressure in the near term? We need to scrutinize...

how long the status quo is the status quo, for sure. And that can be hard to do in a volatile moment that we're in. But if nothing else, it gives us a chance to really challenge ourselves on what we have been doing, whether there's a different way to do it. And that's the way we talk about it internally is this is an opportunity for us to really

revisit past assumptions and think about how we can be better. Now, in some cases, we may gain conviction with exactly the play we've been running. In others, there may be a better alternative. I mean, do you have sort of, I don't know, leadership principles or lessons that you use as a touchstone when things do get volatile?

Well, we're not going to suck our thumbs and cry on our beer as things kind of change. You know, we want to use change as an opportunity to improve. In that regard, this moment when we're just reaching our one-year anniversary as a public company is a moment when I feel pretty confident we've got our feet on the ground.

And we can play into this and use this moment of change to play offense on not just how we want 2025 to go, because we won't change 2025 in any material way, certainly from a supply chain strategy. But we can use 2025 to challenge ourselves for the next decade. And that's very much what we're doing.

Scott is somehow both steady and fiery. He's looking for opportunity at a moment when many other CEOs are paralyzed by uncertainty. So how does he avoid falling into the uncertainty trap? We'll talk about that after the break. Stay with us. Meet Romeo Regali, a Capital One business customer and chef and CEO of Roz, a plant-based restaurant with two locations in New York.

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Romeo and Milka weren't certain how they would bring their dream to fruition. But they were certain of one thing, their passion. We knew we had a vision and we found a space. We had to gut the entire space and build everything from scratch. The kitchen, gas piping, and the restroom, the sound system, everything. We really believed every detail matters.

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Before the break, GE Vernova's Scott Strasick explained how he's looking for opportunity amid the tariff war. Now he explains how he stays optimistic in the face of challenges, plus talks about nuclear power growth, GE Vernova's new alliance with MIT and more. Let's jump back in.

I wanted to ask you about nuclear power. Yes. You know, the tech sector has been part of a revival of interest in nuclear power. Has investment been as robust as sort of the news cycle about it? Well, the conversation is accelerating. I would say there's urgent diligence happening with the end customers. The spending were early in that phase. So what you're seeing is spend,

on trying to get incremental megawatts out of existing plants. We've got an ability to what we call uprate existing plants this decade, and that that's starting to move. But I would say a new build...

We're just in urgent diligence. So the spend isn't happening yet. We're helping the end customers. We're helping the administration understand how we move this industry to the left and get innovation cut in by early in the next decade.

We're in construction on our first small modular reactor in Canada right now. We actually received the license to construct last Friday in Ontario. And now the goal is how do we get that license to construct in the United States as quickly as possible so we can get building some here? And how much of the...

I don't know, the delay or the slowness of the commitment is about sort of past nuclear power concerns and disasters impacting the choice and progress? Or is it more about cost?

Yeah, I would say infrastructure doesn't get built on style points. It's ultimately economics. And this is we're going to be early in the serial number build out. And that's the economics to build a small modular reactor. But for the end customers, their business case is very dependent on when the electrons can show up.

How quickly can the NRC, the regulatory body in the U.S., provide a license to construct? How quickly will it be able to provide a license to operate the plant?

We're getting closer and closer to a tipping point where a number of these projects are going to go through the regulatory process, and we're going to be building them here the second half of this decade. By early end of the next decade, a number of these will be creating clean electrons in the U.S. You mentioned the regulatory agency. Lots of businesses that work with the U.S. government are uneasy about creating

you know, crimping that relationship. I know we've seen big law firms preemptively make deals with the administration. How much do you worry about that? How much do you focus on what your relationship is with the administration and the government?

Well, I can tell you certainly on our end, as an example, Secretary Wright, Department of Energy, Secretary Burgum with Interior have been very accessible to myself and my team as we've been iterating on how we serve them in this administration. So

I'm encouraged that we can work through these things and that we'll accomplish that. Your headquarters are based in Cambridge, Massachusetts, something we talked about in part because you wanted to be near the universities in the area. Many of those universities now face a pullback or potential pullback in federal funding for research.

GE Vrnova recently launched a partnership with MIT. You committed, I think, $50 million. Is that partnership an effort to fill that funding gap? We've been talking with MIT for the better part of 18 months on this alliance. Having spent a lot of time on the campus myself, it's walking distance, a couple blocks away,

There's an incredible amount of both technical and policy enthusiasm on how to practically move the needle on technology that can electrify and decarbonize the world. So we're pretty excited about this. We're going to have about 12 research projects every year we're going to work on.

We're going to match masters and PhD students with our PhD researchers at our Advanced Research Center and to work on projects together. We're going to pick three policy topics every year that we want to work on and bring our teams together to the GE, Vernova, MIT think tank to kind of put positions in the ground on how we can

help governments think about policy. We're going to hire a lot of interns during the summer and bring them into the mix of GE, Vernova. So I'm really excited about the MIT Alliance. And I think it's one of many things we'll do. I mean, when you think about

the number of STEM graduates we need in the U.S. to meet this growth we've talked about and reindustrialize in the U.S., we'll also look for opportunities to be involved in STEM programs throughout the country, maybe more community college-oriented in different ways, close to some of our epicenters of our larger factories. So MIT's a start, but we're going to keep investing in this space generally because we're

we feel like we can play an important role in this ecosystem. The funding cutbacks have hurt a lot of research projects. Do you feel like

There's more of a opportunity, obligation as a business person to sort of fill those gaps. I mean, it's obviously it's not all going to be you filling the gap of all the money that the government was putting towards these things. But it does potentially slow some of the research that, you know, is valuable for you.

China graduates three and a half million STEM graduates every year. That's about as many graduates as we graduate across all disciplines every year. So this is important. You know, we need to keep investing in science, technology, math, engineering.

Some of that's undergrad. Some of that can be community college. Some of it can be PhD level stuff, which is a little bit more oriented towards the MIT Alliance. We're going to be involved in all the above. And we do that because we want the communities that we're in, MIT as a neighbor to thrive, but we do it because we think it's good business. We're only going to grow our company and serve these markets with

the best team in the world. And to do that, you got to invest in people. And sometimes the best way to get the people is to be part of an ecosystem that allows them to get to know you and to iterate together. And that's what we're all about. Givernova has, what, 75,000 employees all over the world. What would you say to them about

This moment for the company, this moment given this economic global war that's kind of going on, like how do you calm them, give them perspective?

Well, we've been talking about this moment as an investment super cycle into the electric grid for the better part of 18 months now. And there's nothing in the headlines that give me any less conviction in the market opportunity presenting itself. More electrons are going to be needed.

especially in a decoupled supply chain where there's going to be more redundancy maybe built into the global supply chain because of policy. So our opportunity to serve these markets is as strong as ever. Now,

tariffs can create cost challenges. We're not immune to that, certainly in the near term. But again, is that something that we're going to be stuck in the mud over? Are we going to act on it and at least challenge ourselves every day and use this moment to become a better company? We've had a good first year as a public company, but it's just the beginning.

And we have to use this moment to challenge ourselves to be that much better a company. And that's what our expectation is. And that's the way I talk to our teams today. And it's the way I'm going to talk to them tomorrow, because there'll be other variability and volatility that the world and the markets create. But the world needs GE Vernova. So if we're going to serve this market, we're going to do it with a little bit of

gritty resilience and practical optimism every day that the world needs. I mean, I could see someone in your shoes being like, all right, I managed this spinoff from GE. I took this company public. We had a great first year. Everything's going well. And then, oh, I got to deal with this hassle of all this external stuff. Like it would be, oh, really now? Yeah.

No, Bob, I've got a kick in my step right now. I like our chances, but I think volatility creates opportunity to even further differentiate ourselves. That doesn't mean it's easy. It doesn't mean we don't have our challenges. We will have moments here, depending on where the tariffs go, that we will incur incremental costs.

But you don't win a game when consistently, when the ball always bounces your way, you know, you've got to kind of be ready to respond to the environment we're in. We're going to have moments like this. We're in the beginning of year two. I like our chances to respond to it and be better because of it. And it's also a great opportunity for me to see how my team responds, right? And it's easy in a first year or easier, right?

In a first year when we're reasonably popular, I'll say in quotation marks on how we performed for everybody to be in. Now's the moment to really say, okay, who really is leading with what we call a we culture of open palms towards how do I help versus what we try to avoid, which is a you culture, a finger pointing culture.

And that's in both internally, but also how we interact with the outside world. I mean, I try to always put myself in the counterparty's shoes and then find a way to go with open palms versus finger pointing. And that's going to be the way we run this company.

Do you find it hard ever to stay optimistic? Are there things that you do? I mean, your team calls you relentlessly optimistic. This is a privilege, the opportunity that we have right now. I have the luxury of a board, a management team that wakes up every day focused on leading the energy transition forward. And

I think that focus that we have today as a purpose-built public company is very well suited for the volatility of today. It doesn't mean we won't have our challenges. By no means are we immune to tariffs. That is not what I'm saying. I'm just saying that we're going to take advantage of those challenges, and I'm determined we can do that and look forward to showing you those results over time.

Well, Scott, this has been great. Thank you so much for doing it. Bob, thank you for having me. I appreciate it. I look forward to more interactions from here, okay?

Scott has a way of making me feel more optimistic, despite all my concerns. He's not denying the challenges ahead, but he's not letting them slow him down either. I'm struck by how he's sticking to his principles. Despite changes in the macro environment, he's not backing away from climate change and decarbonization or from global projects that may get more complicated with tariffs. Of course, those choices are good for GE Vernova's business too.

But still, it's nice to talk with a CEO who's not rewriting his playbook to appease anyone. He's not picking any fights, but by holding to his perspective, that sends a message too. I'm Bob Safian. Thanks for listening.

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I'm Rana El-Khalioubi. On my podcast, Pioneers of AI, we bring questions like this to some of the leading thinkers and builders working in AI.

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