Nuclear technology is on the brink of a renaissance, showcasing new possibilities as modern society’s appetite for energy continues to escalate—especially among tech giants harnessing power for artificial intelligence (AI). The emergence of Small Modular Reactors (SMRs) presents a solution to some of the long-standing challenges facing the nuclear industry, offering a potential path to cleaner energy generation. The increasing involvement of major technology companies in SMR investment signifies a transformative shift in the landscape and has indeed reignited interest in nuclear solutions.
In a world that is increasingly dependent on digital technologies, the demand for reliable, clean energy sources has become a top priority. Tech companies like Amazon and Google are at the forefront of this movement, underscoring the need for a sustainable infrastructure to support their data-heavy operations. These companies have publicly acknowledged the importance of transitioning to fossil-free energy, positioning nuclear power—especially the innovative SMR technology—as a viable candidate.
Amazon’s substantial investment of over $500 million across various advanced reactor projects showcases its commitment to a future powered predominantly by renewable energy. In parallel, Google has entered into an agreement with Kairos, a developer of SMRs, to procure energy, marking a poignant development in the nuclear arena. According to experts, such initiatives could lead to a surge in the market for SMRs, potentially yielding an increase of between two to five gigawatts by 2035—equivalent to the energy generated by between six to seventeen reactors.
Despite the promise inherent in SMRs, the technology has grappled with delays in reaching commercial viability. Traditional utility companies have often hesitated to invest in SMR projects due to the high costs associated with pioneering a novel energy technology. Paul Zimbardo, a managing director at Jefferies, explains that utilities have a fiduciary responsibility to their shareholders, requiring them to be judicious about investments that could impose financial risks.
Conversely, the tech sector’s increasing willingness to absorb a premium on energy costs demonstrates a significant shift in priorities. This newfound willingness stems from a pressing need for dependable, carbon-free electricity to support the burgeoning AI infrastructure. For instance, Microsoft has set a precedent by agreeing to pay $130 per megawatt-hour for power generated from the reopened Three Mile Island nuclear facility—illustrating a paradigm shift in how companies perceive the cost-benefit analysis of nuclear energy. The price point seems reasonable, offering hope that SMRs could gain traction in the market and become financially viable.
While the renewed interest in SMRs heralds a potentially lucrative opportunity, options for investors are currently sparse. As noted by Zimbardo, significant liquid investments in the SMR sector remain few. Small players such as NuScale and Oklo are noteworthy, but they come with inherent risks due to their volatility and unclear business prospects.
NuScale, valued at approximately $4.7 billion, recently saw its stock surge, albeit after a series of setbacks including a canceled project in Idaho due to soaring costs linked to inflation and interest rates. Oklo, on the other hand, is ambitiously pursuing the construction of smaller microreactors, aiming to deliver operational turbines ranging from 15 megawatts to 100 megawatts. Backed by prominent figures such as OpenAI CEO Sam Altman, Oklo’s goals reflect high aspirations for the future of nuclear innovation, with plans to have its first reactor operational by 2027.
However, even established companies, such as GE Vernova, face challenges in the SMR sector. Although scheduled to commence a project in Ontario that intends to utilize its BWRX-300 small modular reactor, GE Vernova anticipates that revenue growth from this technology won’t translate into financial gains until the early 2030s.
The landscape for nuclear energy is undergoing a notable transformation as innovative solutions like SMRs pique the interest of corporations and investors alike. Technology companies’ hunger for clean, reliable energy signals a promising pivot away from fossil fuel dependency. Nevertheless, challenges remain, particularly concerning cost management, regulatory frameworks, and commercial deployment. The commitment from tech leaders to support SMRs could act as a catalyst for reintroducing nuclear power into the energy mix, ultimately paving the way for a sustainable future grounded in advanced energy technologies. As momentum builds, industry stakeholders must navigate the complexities of investment and development to capitalize on this potential resurgence in nuclear energy.