Nuclear Power’s Return: Big Tech Fuels a New Age of Energy

Nuclear power in the United States is on the brink of a revival, driven by the growing energy demands of artificial intelligence (AI) data centers. As companies like Microsoft, Google, and Amazon invest heavily in nuclear energy projects, it seems we might finally see significant movement in an industry that has stagnated for decades.

Big Tech’s Bold Moves

Recently, three major headlines have highlighted this trend:

1. Microsoft’s Commitment: The tech giant has partnered with Constellation Energy to reboot a reactor at the infamous Three Mile Island. This facility holds the dubious honor of being the site of the worst nuclear accident in U.S. history back in 1979. A $1.6 billion refurbishment will allow the reactor to come online by 2028, with Microsoft pledging to purchase all the energy produced for the next 20 years to power its growing network of data centers.

2. Google’s Partnership: Google has joined forces with Kairos to secure power from small modular nuclear reactors (SMRs), reflecting a shift towards innovative energy solutions that can meet increasing demands.

3. Amazon’s Investment: Amazon is at the forefront as well, leading a $500 million funding round for X-Energy, another company focused on developing SMR technology.

The State of Nuclear Energy

Despite having 94 nuclear reactors, the U.S. nuclear industry has remained relatively stagnant, contributing around 20% of the country’s electricity since the late 1980s. The Vogtle plant in Georgia marked a notable change earlier this year by opening its third and fourth reactors—the first new units in seven years. Strict safety regulations and design standards have kept new developments at a crawl, but technology advances from Big Tech could be the key to changing that narrative.

The Promise and Challenges of SMRs

Small modular reactors are designed to be more efficient and flexible alternatives to traditional nuclear plants. However, they remain largely in the experimental phase in the U.S. Kairos, which has received government approval for a demonstration unit, plans to showcase its cooling technology with a non-nuclear power trial aimed for 2030.

Notably, even with these exciting developments, many nuclear projects—such as the reboot of Three Mile Island—are still several years away. This inflection point presents both an opportunity and a challenge for potential investors.

Investing Insights

While there is great interest in nuclear energy, especially fueled by Big Tech, the investment landscape is still tricky. Publicly traded nuclear stocks have surged, such as NuScale Power, which has seen a whopping 450% increase this year. Similarly, Oklo, backed by OpenAI’s Sam Altman, has claimed over 80% gains since going public in May.

Utility companies are also benefiting from the rising demand for energy. As data centers proliferate, rates and stock prices for utility companies have soared, with a nearly 30% increase in the ETF tracking S&P 500 utility stocks this year.

Investors looking for exposure to the nuclear sector are also eyeing uranium producers. Companies like Uranium Energy and Cameco have experienced significant growth, reaching near record highs.

The Road Ahead

While Big Tech is pushing investments into nuclear power, it’s important to remember that the future of SMRs remains uncertain. The technology shows promise, but without proven track records in operational settings, it’s a gamble. As George Gianarikas, an analyst at Canaccord Genuity, points out, "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 eyes of the tech world directed toward nuclear energy as a viable solution for sustainable electricity generation, only time will tell if these investments yield fruit.

The AI Buzz Hub team is excited to see where these breakthroughs take us. Want to stay in the loop on all things AI? Subscribe to our newsletter or share this article with your fellow enthusiasts.