Big Tech companies are reshaping the financing of new nuclear technologies in a bid to power energy-hungry artificial intelligence data centres, Reuters reported, and a clearer path to profitability.
Reuters
Meta, for example, signed a deal with Oklo to develop a 1.2-gigawatt nuclear technology park in Ohio. Alphabet-owned Google has struck a deal with Kairos Power to build its first small modular reactor by 2030.
Further, U.S. electricity consumption, driven by demand for data centers, is expected to grow 1% this year and 3% next year, according to the U.S. Energy Information Administration.
In this context, small modular reactor is emerging as a more financially viable alternative to nuclear energy. Tim Winter, portfolio manager at Gabelli Utilities Fund, part of Gabelli Funds, says this is mainly because the size of the modules and the shorter lead times reduce the risk of upfront capital investment.
Oklo spokeswoman Bonita Chester said demand for AI is driving customers to sign long-term power purchase agreements, which will support project development. The company’s agreement with Meta, for example, includes financing to lock in nuclear fuel supplies and advance the first phase of the Ohio project.
Tess Carter, associate director for Energy and climate at Rhodium Group, said: “We are already starting to hear that some banks are interested in doing deals in this area, which would be a significant development, but we haven’t seen that yet.”