Nuclear Power’s Resurgence: The Role of Big Tech in Driving the Sector's Revival

The demand for energy-intensive data centers, particularly for artificial intelligence (AI) applications, is creating a new surge in interest around nuclear power.

Major tech companies like Microsoft (MSFT), Google (GOOG), and Amazon (AMZN) are placing big bets on nuclear energy, especially on Small Modular Reactors (SMRs). Recently, Microsoft signed an agreement with Constellation Energy to revive a reactor at the infamous Three Mile Island, while Google partnered with Kairos Power to invest in SMRs, and Amazon led a $500 million funding round for SMR developer X-Energy. These investments underscore nuclear power's potential role in supporting the growing energy needs of AI-driven data centers, as tech giants seek stable, carbon-free power sources.

Barriers to Growth: Safety and Regulation
The US nuclear industry has long stagnated, with 94 reactors providing roughly 20% of the nation’s electricity for over three decades. Stringent safety regulations have limited the construction of new reactors, but SMRs offer a potential solution. These smaller, modular reactors promise greater flexibility and lower costs, but they remain in experimental stages in the US. Projects like the revival of Three Mile Island’s reactor by 2028 and Kairos’ demonstration SMR set for 2030 showcase the long timelines involved in bringing nuclear power projects to fruition. While enthusiasm is growing, the technology’s unproven status keeps the field speculative for investors.

Investment Opportunities in the Nuclear Sector
Investors looking to capitalize on nuclear’s resurgence must navigate a limited pool of publicly traded companies. Key players include NuScale Power (SMR), the only SMR developer to have received regulatory approval, and Oklo (OKLO), backed by OpenAI’s Sam Altman. Both companies have seen their stock prices soar in response to growing interest in SMRs. Additionally, traditional nuclear stocks like Constellation Energy (CEG) and Vistra (VST) have benefited from increased demand. Uranium producers, such as Uranium Energy (UEC) and Cameco (CCJ), are also witnessing strong performance due to the sector’s renewed interest.

The road ahead for nuclear energy is long, and while the involvement of Big Tech signals confidence, the industry must overcome significant regulatory, technological, and financial hurdles to reach its full potential.

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