GE Vernova CEO Scott Strazik said he has had conversations with OpenAI CEO Sam Altman multiple times over the past few weeks as power scarcity remains a challenge and opportunity for hypescalers.
“I met with Sam multiple times over the past few weeks. It is a relationship that continues to evolve,” Strazik told CNBC in a phone interview Wednesday, following the release of the company’s third-quarter results. “I’ve been with his team over the last 72 hours. Clearly, OpenAI is a critical piece of this growth trajectory with a lot of ambition.”
Strazik said the talks have focused on OpenAI’s power needs, “both with power generation and the electrical equipment required to do it.”
GE Vernova shares fell about 6% on Wednesday. The company’s third-quarter results topped expectations, helped by a 55% increase in power equipment orders. However, the company didn’t raise its 2025 forecast, disappointing some investors. Also, onshore wind remains soft, but analysts say that was largely expected due to ongoing regulatory hurdles.
Melius Research analyst Rob Wertheimer told CNBC there was nothing negative in this report.
The “bar was set high,” he said, noting that GE Vernova shares have doubled over the past year.
Wall Street remains optimistic about GE Vernova capitalizing on growing demand from big tech. According to LSEG, the average analyst price target is $658, or about 20% higher than where the stock is trading now.
GE Vernova shares year to date
The company has quickly become the key power equipment provider to every major hyperscaler including OpenAI, Oracle, Nvidia, Google, XAI, according to people familiar to the situation.
According to Strazik, $900 million in electrical equipment orders have come from the hyperscalers year to date versus $600 million in orders in all of 2024.
“When we add in Q4 orders, our electric equipment orders will be directionally double with them [hyperscalers],” Strazik said.
Analysts say some of the key challenges GE Vernova is facing right now are capacity constraints, evolving tariff policy and regulations that have slowed down orders for onshore wind turbines.
GE Vernova is mostly sold out of its power generation equipment through 2028, Strazik said.
The company has ballparked $300 million to $400 million in tariff-related costs this year. At the company’s upcoming investor day in early November, Strazik is expected to detail more forward looking numbers.
The company also has $8 billion of cash and no debt, which means it’s keeping an eye out for opportunities, Strazik said.
On Tuesday, GE Vernova said it would buy the 50% it didn’t already own in transformer manufacturer Prolec GE for more than $5 billion. Transformers are key to increasing power voltage to accelerate transportation of electricity.
(Source)