Sterling Infrastructure, Inc. Common Stock Morgan Stanley's 14th Annual Laguna Conference

Yeah. I appreciate everybody taking the time. Joe Cutillo, CEO of Sterling Infrastructure. We focus in, when we talk about the AI space, in the site development and the electrical aspects of the build-out. As we get into the questions, I can tell you right up front, we've had a lot of questions around slowdowns, delays, pauses, all the political rhetoric. I can tell you firsthand, we've seen no delays, no pauses, no push-outs, no cancellations. Every week we hear from our customer base, which is the biggest hyperscalers in the U.S., along with the second tier below them, "How do we do more faster?" It's interesting in today's world and in today's market, I read the newspaper and I hear and see one thing, and I talk to our teams, and I talk to our customers, and it's 180 degrees from what we are reading.

I think the hyperscalers will admit one thing. They have not done a good job of getting ahead of what I'll call the public perception of what they're doing. I think there's a lot of myths that are very different from the realities. We were talking earlier with some groups on water consumption, what they're doing with the grid. There's very little water used in these. They're closed systems, so once you fill them, they're not using a lot of water. They're actually building out or funding a lot of the grid build-out to get power to them, et cetera. They haven't done the greatest job. There's a very different reality versus the political rhetoric that we see in the newspaper every day. We're in the state of Texas.

To hear the governor of Texas come out and talk about slowing down data centers, I don't know who had a heart attack first in the state. The reality is, what they've put in place, I think is more guardrails and stuff around small projects. It's had no impact on the large hyperscalers of the projects that are coming out in the fourth quarter, first quarter for sure. We don't see anything happening in the future on that.

Yeah, it is. The projects, what people don't realize is two things. One, we're in a unique situation that we have 3 to 5 years of visibility of what's coming. We're working with these customers for multiple years on projects before they even come out. We haven't seen any of those slow down. When we start a project, all the permitting's done, power's there, everything is completed. So it's not going to necessarily stop.

Yeah. It's done. The one thing we are seeing with the projects is the size and the scope of them continue to get significantly larger.

A few years ago, when we got into this, we got interested when they were around 100 acres. We were really excited when they got up to 300 or 400 acres and said if they could just stay there for the rest of our lives, we'd be the happiest people in the world. I'll tell you, we're working on jobs right now that are 10,000 acres plus. When you start- That's amazing.

putting self-power generation on, 28, 29, they're talking jobs or talking campuses north of 30,000, 40,000, 50,000 acres.

Yeah. As I tell people, we're the canary in the coal mine. What most people don't understand is for the next generation of data campuses to start and break ground 5 years from now, they're working on them today. They're literally spending hundreds of millions of USD upfront to get those ready. So we work with the hyperscalers on their 5-year plan. So we know what's coming out, approximately where it's coming out, and obviously the timing. People say, "Well, why is that?" Well, it takes 5 years today. First, you got to get land. You have to permit the land. You got to either run power or get utilities there in some way, shape, or form. On the self-power generation, you have to order a turbine, which now has a 5 or 6-year lead time, so they're ordering this stuff upfront.

The time it takes from the decision point of spending money to actually breaking ground used to be about 3 years. It's now out to 5 years. Semiconductors, similarly. We started doing the facility in N.Y., and I tell the story, I remember when Micron announced they were going to spend $110 billion or $150 billion on this facility, our phone was ringing off the hook. "Did you get the job? Are you going to do the job?" I said, "There's not a job, first of all." A couple of months go by, and everybody says, "You got the job. You going to do the job?" We said, "There's not going to be a job for 5 years." One year into it, people said, "Well, you must have lost the job.