**Google and Amazon Sign Power Purchase Agreements with SMR Developers**
With the rise in power demand due to the artificial intelligence (AI) boom, the stock prices of companies related to nuclear power generation are soaring. There is an analysis that a ‘nuclear renaissance’ may unfold as big tech companies like Google and Amazon enter power purchase agreements with small modular reactor (SMR) companies to operate energy-intensive data centers.
According to the New York Stock Exchange on the 20th (local time), the stock price of U.S. SMR developer Oklo surged by 99.2% last week (October 14–18). The largest U.S. SMR firm, NuScale Power, also saw a jump of 38.6%. Other U.S. nuclear power companies such as Talen Energy and BWX Technologies, a nuclear component manufacturer, rose by 9.3% and 7.5%, respectively. Constellation Energy, the largest nuclear power company in the U.S., increased by 1.5%.
The rise in nuclear company stocks is attributed to big techs expanding their nuclear investments. On the 14th, Google signed a power purchase agreement with SMR startup Kairos Power, planning to deploy 6-7 SMRs by 2035. Amazon is set to receive power from Talen Energy. Microsoft (MS) also agreed last month to a 20-year power purchase from Constellation.
Nuclear energy is emerging as the most suitable power source in the AI era. Data centers operated by big techs for AI consume enormous amounts of power. According to market research firm Wood Mackenzie, as of the first half of this year, new data centers by companies consumed a total of 24 gigawatts (GW) of power, more than triple the size from the same period last year. Among these, nuclear power is highlighted as a low-cost, high-efficiency power source with zero carbon emissions. SMRs, in particular, are favored for their simpler construction and lower risk compared to large reactors. The U.S. government is also investing billions of dollars in the SMR field, concerned that Russia and China could become leaders in nuclear technology.
Clay Sell, CEO of U.S. SMR developer X-energy, stated that “the only limiting factor for the U.S. to maintain its leadership in AI is not land or semiconductors, but power,” emphasizing that obtaining power is the top priority.
Mike Laufer, CEO of Kairos Power, highlighted the urgent need to build more SMRs, stating that it’s not simply about replacing fossil fuels but addressing a pressing issue.
However, some caution that there is still a long way to go for SMR commercialization, which could lead to increased volatility in nuclear-related stocks. Safety, cost efficiency, and regulatory barriers need to be addressed first.