AI-driven 'Wonjeon Renaissance' Opening... Nuclear Power Stocks Surge with Big Tech Investment

Google and Amazon Sign Power Purchase Agreements with SMR Developers
Oklo Surges 99% Last Week... NuScale Up 39%

Due to the surge in electricity demand driven by the artificial intelligence (AI) boom, the stock prices of nuclear power-related companies are soaring. Analysts predict a 'nuclear renaissance' as big tech companies like Google and Amazon sign power purchase agreements with small modular reactor (SMR) companies to operate power-hungry data centers.

According to the New York Stock Exchange on the 20th (local time), U.S. SMR developer Oklo's stock price surged 99.2% last week (14th?18th). Newscale Power, the largest SMR company in the U.S., also jumped 38.6%. U.S. nuclear power companies Talen Energy and nuclear component manufacturer BWX Technologies rose 9.3% and 7.5%, respectively. The largest U.S. nuclear power company, Constellation Energy, increased by 1.5%.

The rise in nuclear power company stocks is due to big tech expanding their investments in nuclear power. On the 14th, Google signed a power purchase agreement with SMR startup Kairos Power and plans to deploy 6 to 7 SMRs by 2035. Amazon decided to receive power from Talen Energy. Microsoft (MS) also signed a 20-year power purchase agreement with Constellation last month.

Nuclear power is emerging as the most suitable energy source in the AI era. Data centers operated by big tech to run AI consume enormous amounts of electricity. According to market research firm Wood Mackenzie, as of the first half of this year, companies’ new data centers consume a total of 24 gigawatts (GW) of power, more than triple the amount during the same period last year. Among these, nuclear power is attracting attention as a low-cost, high-efficiency power source because it is cheap and has zero carbon emissions. In particular, SMRs are preferred because they are easier to build and less risky compared to large nuclear plants. The U.S. government is also investing billions of dollars in the SMR sector, concerned that Russia and China might become leaders in nuclear power.

Clay Sell, CEO of U.S. SMR developer X-Energy, said, "The only limiting factor for the U.S. to maintain its AI leadership is not land or semiconductors, but power," adding, "Securing power is the top priority."

Mike Laufer, CEO of Kairos Power, emphasized about SMRs, "This is not simply about replacing fossil fuels; we need to build more now," calling it "a truly urgent issue."

However, some point out that there is still a long way to go before SMRs become commercialized, which could increase volatility in nuclear power-related stocks. Safety, cost efficiency, and regulatory hurdles must be addressed.