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Nuclear Power Could Be the Next Big AI Trade

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Due to Big Tech’s constant need for electricity for its AI data centers, nuclear power is poised for a huge renaissance in the US. This new trend is highlighted by recent events.Constellation Energy and Microsoft have partnered to restart a reactor at the notorious Three Mile Island.

In the meantime, Google and Kairos are working together to buy electricity from cutting-edge small modular nuclear reactors (SMRs). Another notable move by Amazon is that it spearheaded a $500 million funding round for the SMR startup X-Energy.

In the past, the nuclear energy industry in the United States has experienced stagnation. Even though there are 94 nuclear reactors operating at the moment, their aggregate output has not changed since the late 1980s, contributing roughly 20% of the country’s electricity. Rigid regulatory safety and design standards have largely impeded the first major addition to the Vogtle plant in Georgia in seven years, as seen by the recent activation of additional units.

The latest investments made by Big Tech may indicate a change in this pattern. Reassessing nuclear power seems like a sensible course of action because chips and energy are crucial components for the artificial intelligence industry. Potential investors should, however, bear in mind a few important factors.

First off, it is anticipated that the projects—including the reactor at Three Mile Island—will take some time to complete. The plant is planned to be operational by 2028. Modern small modular reactors are tiny versions of conventional nuclear generators designed to provide flexible, affordable alternatives. CEO of Kairos Mike Laufer reports that the company has gotten government authority to build a demonstration unit. The unit will first be powered by non-nuclear power to verify its safety-enhancing cooling technology, and it is expected to be launched in 2030.

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Limited publicly traded choices for direct investments in this emerging industry present additional difficulty for investors. This year, a lot of stocks have gained a lot of ground. For example, NuScale Power (SMR) has increased by over 450%, while Oklo (OKLO), which is supported by Sam Altman of OpenAI, has increased by over 80% since going public through a SPAC in May.Stakeholders are encouraged to keep a careful eye on these advancements for potential investment opportunities as the relationship between AI and nuclear power develops.

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