The next big AI trade could be nuclear power: Morning Brief

Julie Hyman · Host
3 min read

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Nuclear power is poised for a renaissance in the US, prompted by Big Tech’s seemingly insatiable need for electricity to power AI-generating data centers.

Three recent headlines have thrown this into focus: Microsoft (MSFT) signed an agreement with Constellation Energy (CEG) to restart a reactor at Three Mile Island. Google (GOOG, GOOGL) partnered with Kairos to buy power from small modular nuclear reactors, known as SMRs. And Amazon (AMZN) is leading a $500 million funding round for another SMR company, X-Energy.

The nuclear energy industry has largely stagnated in the US. While the country has 94 nuclear reactors, according to the Energy Information Administration, their collective generating capacity has remained at around 20% of total electricity since the late 1980s. When the Vogtle plant in Georgia opened its third and fourth reactors earlier this year, they were the first new units in seven years. One main reason for the slow pace is the stringent safety and design standards imposed by regulators.

If Big Tech’s investments are any indication, that might be poised to change. Chips and energy are the picks and shovels of the AI movement, making reexamining nuclear power a logical conclusion. But if investors want to follow with their dollars, there are some key things to remember.

One is that these projects — even the Three Mile Island reactor, which isn’t using new technology — are years away. Three Mile Island is scheduled to get online by 2028.

MIDDLETOWN, PENNSYLVANIA - OCTOBER 10: in this aerial view, the shuttered Three Mile Island nuclear power plant stands in the middle of the Susquehanna River on October 10, 2024 near Middletown, Pennsylvania. The plant’s owner, Constellation Energy, plans to spend $1.6 billion to refurbish the reactor that it closed five years ago and restart it by 2028 after Microsoft recently agreed to buy as much electricity as the plant can produce for the next 20 years to power its growing fleet of data centers. The shuttered plant is the site of the worst nuclear reactor accident in United States history when one of the plant’s two reactors melted down in 1979. (Photo by Chip Somodevilla/Getty Images)
The shuttered Three Mile Island nuclear power plant stands in the middle of the Susquehanna River on Oct. 10, 2024, near Middletown, Pennsylvania. (Chip Somodevilla/Getty Images) · Chip Somodevilla via Getty Images

Then there’s the newer tech. The goal of small modular reactors is to create mini versions of larger nuclear fission generators at a lower cost and with more flexibility, Kairos CEO Mike Laufer told Yahoo Finance.

But SMRs aren’t yet in use in the US. All of the companies getting investments are in the experimental stages. The privately held Kairos, for example, has received government approval to build a demonstration unit. It will first run it with non-nuclear power to showcase its cooling technology, which Laufer said has safety benefits. That demo is targeted for 2030.

The second obstacle for investors is that there aren’t many publicly traded ways to get in, especially pure plays. Many of those stocks have skyrocketed this year. NuScale Power (SMR) has soared by more than 450%. Oklo (OKLO), backed by Sam Altman of OpenAI, went public through a SPAC in May and the shares have gained more than 80% since.

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