Sam Altman-backed nuclear power company Oklo (OKLO) has boomed on the stock market over the past month as investors look to nuclear energy as the next big AI trade.
Shares in the company, which is designing so-called small modular nuclear reactors (SMRs), have surged nearly 140% over the past month on Big Tech’s growing interest in nuclear power. SMRs are designed to produce cheaper, faster, greener energy than traditional nuclear facilities.
Amazon (AMZN) and Google (GOOG) in mid-October announced substantial investments in SMR projects as they look to balance their climate goals with the growing energy demands of the data centers powering their various AI software. Oracle’s (ORCL) Larry Ellison announced in September that the company intends to build a data center powered by SMRs.
“A nuclear power renaissance is underway with nuclear increasingly viewed as a solution which solves both the increased need for baseload power and the need to decarbonize,” wrote Craig-Hallum analyst Eric Stine in a recent note to investors. Baseload power refers to the day-to-day energy demand on an electrical grid.
Stine said Google and Amazon’s investments are “truly just the beginning of a multi-decade megatrend.”
Goldman Sachs estimates that global data center power consumption will grow 160% by 2030, driven by demand from artificial intelligence. Meanwhile, separate data from the International Atomic Energy Agency shows nuclear power production in North America potentially doubling by 2050.
Stocks of other firms making similar tech to Oklo’s, such as NuScale (SMƒR) and NANO Nuclear Energy (NNE), also surged following news of Google’s and Amazon’s investments on Oct. 14 and Oct. 16, respectively, before paring gains this week.
“The opportunity is so massive here in the market that there’s going to be a good number of folks that are successful,” Oklo CEO Jacob DeWitte told Yahoo Finance.
In fact, the SMR market could grow to $300 billion by 2040, according to research cited by Citi analysts.
Too many ‘ifs’
Oklo went public in May through a merger with a special purpose acquisition company, AltC Acquisition Corp., which Altman co-founded. In addition to Altman, Cathie Wood and Peter Thiel are on its list of investors.
Sam Altman owned a 2.6% stake in the company, according to a regulatory filing in June. He became chair of Oklo in 2024 after serving as its CEO for three years.
While Oklo was founded in 2013, well ahead of the AI boom, the energy needs of artificial intelligence have been a boon to the firm as it builds its client book, DeWitte said.
“AI does make [up] the bulk of our order book that we’ve talked about,” DeWitte said in an interview. That includes clients in the chip sector as well as data centers, he added. Publicly, the company has said it’s working with hyperscalers Equinix and Prometheus Hyperscale. It has yet to disclose any deals with Big Tech firms.
But Wall Street analysts caution that the company and its competitors face regulatory and supply chain hurdles before they can produce anywhere near the amount of power needed to run artificial intelligence data centers.
Nuclear projects have been subject to stringent regulations in response to high-profile global nuclear meltdowns at Three Mile Island in 1979, Chernobyl in 1986, and Fukushima in 2011. On average, it takes the US Nuclear Regulatory Commission 80 months to approve nuclear plant construction in the US, compared to an average of 54 months in the UK, according to research cited by Canaccord Genuity.
While a number of companies are developing SMRs — including Bill Gates’ TerraPower — none have been deployed in the US to date, and long licensing processes mean profitability isn’t exactly on the horizon.
In Oklo’s first earnings report since going public on Aug. 13, the company reported a net loss of about $53 million for the first six months of the year, wider than the roughly $9 million loss it posted in the year-earlier period.
Fuel is also an issue for companies in the space: Many SMRs, such as those of Oklo, NuScale, and TerraPower, require a specific type called high-assay low-enriched uranium, also known as HALEU, which is imported from Russia. There’s little to no domestic supply since the West at large has avoided developing a HALEU supply chain. That’s because enriched uranium is used in nuclear weapons, according to Canaccord Genuity.
“A developed Western HALEU supply chain is absent, particularly given efforts to limit enrichment due to concerns over proliferation,” wrote Canaccord Genuity analyst George Gianarikas in a note to investors early this year.
Citing supply constraints and long and difficult licensing processes, Citi’s Vikram Bagri recently reduced his price target on Oklo stock from $11 to $10.
“There are too many ‘ifs’ in this process,” Bagri said. “The new technology and new nuclear installs, it seems like, will happen only after 2030. After 2030, it remains to be seen who gets successful and how successful they get, how many nuclear reactors we see.”
But Seaport analyst Jeffrey Campbell sees Oklo having advantages in the burgeoning market, pointing to its ability to use “much cheaper” recycled fuel.
Whereas a traditional nuclear plant can take billions of dollars to build, Oklo has said the cost of bringing one of its SMRs online is a few hundred million dollars.
For his part, DeWitte is optimistic about the future of the market — and Oklo’s place in it. DeWitte cited mounting bipartisan support to reduce regulatory hurdles and enhance the domestic supply of HALEU. He said Oklo is unique because the company is looking to own and operate its facilities and sell energy directly to customers, rather than the traditional model of licensing its technology to utilities. DeWitte believes this will enable the company to bring its reactors online faster.
“In the world today, where this opportunity is so massive — diverse customers that need different things, want different things … you’re going to see a diverse ecosystem evolve,” he said. He added, “You’re not going to see one winner take all.”
Laura Bratton is a reporter for Yahoo Finance. Follow her on X @LauraBratton5.
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