The nuclear power sector in the United States is experiencing a resurgence, largely fueled by the growing energy demands of Big Tech. Companies such as Microsoft, Google, and Amazon are making substantial investments in nuclear energy to power their rapidly expanding data centers. The push towards clean, reliable energy sources is a reflection of the enormous electricity required to sustain the growing demands of AI technology and data processing centers.
Big Tech's Investment in Nuclear Energy
Recently, several headlines have highlighted Big Tech's interest in nuclear power. Microsoft has signed an agreement with Constellation Energy to revive the reactor at Three Mile Island, while Google has teamed up with Kairos Power to purchase energy from small modular reactors (SMRs). Additionally, Amazon is leading a $500 million funding round for X-Energy, another key player in the development of SMRs.
The renewed interest in nuclear power marks a shift after years of stagnation. Although the U.S. currently operates 94 nuclear reactors, their collective output has remained at around 20% of total electricity generation since the late 1980s. The opening of new reactors, such as those at the Vogtle plant in Georgia, represents one of the few advances in the sector in recent years. Regulatory hurdles and stringent safety standards have slowed the adoption of nuclear energy.
The Potential of Small Modular Reactors (SMRs)
SMRs are being hailed as the next generation of nuclear power. These miniaturized reactors offer lower costs, increased safety, and greater flexibility compared to traditional nuclear fission reactors. Kairos Power CEO Mike Laufer has emphasized that SMRs have the potential to meet energy demands more efficiently. However, none of these reactors are operational in the U.S. yet. Kairos Power has received government approval to build a demonstration unit, but this project is still in the early stages, with the goal of showcasing its cooling technology by 2030.
The challenges facing nuclear power investors are significant. For one, these projects take years to come to fruition. The planned revival of Three Mile Island is not expected to be complete until 2028, despite the substantial investment from Microsoft. Even with the promise of new technology, investors should be cautious, as SMRs are still unproven in many parts of the world.
Opportunities for Investors
Despite the hurdles, there are promising opportunities for those looking to invest in nuclear energy. Companies such as NuScale Power and Oklo have seen substantial growth in their stock prices this year. NuScale Power (SMR) has surged over 450%, and Oklo, backed by Sam Altman, CEO of OpenAI, has gained more than 80% since going public through a SPAC in May.
Utility companies are also benefiting from the increased demand for electricity, driven by the expanding needs of data centers. Stocks in the sector have risen significantly, with the S&P 500 utilities ETF up nearly 30% this year, a potential record gain.
Uranium producers, such as Uranium Energy (UEC) and Cameco (CCJ), have also experienced rapid growth. These companies are seeing increased demand as nuclear power becomes more attractive for clean energy initiatives.
Investors need to keep in mind that, while there is significant momentum, small modular reactors are still a work in progress. The potential for growth is substantial, but nuclear energy remains a long-term investment. According to George Gianarikas, an analyst at Canaccord Genuity, “Right now, these things are unproven. We don’t have a lot of examples of small modular reactors working in the world. They’re a promise.”
With the growing push for clean energy solutions and Big Tech's commitment to reducing their carbon footprint, nuclear power may soon play a larger role in the global energy market. As investments in nuclear power technology continue to grow, the future of nuclear energy in the U.S. will be shaped by regulatory advancements and technological breakthroughs.
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