AI and Nuclear Power: A Dynamic Shift in the Energy Sector

Artificial Intelligence (AI) has emerged as the next big thing in technology, revolutionizing numerous industries. However, the relentless energy demand of AI presents major tech companies with the challenge of finding a suitable energy source. This search has led to collaborations between renowned tech companies and the nuclear energy sector, particularly in the development of small modular reactors (SMRs), which create exciting investment opportunities in the energy sector. While oil and coal companies still provide essential energy sources for global shipping and air transport, nuclear stocks like Constellation Energy and Vistra are experiencing significant stock gains due to their ability to meet the high energy demands of AI. Originally considered a potential substitute for fossil fuels, nuclear energy still holds the potential to do so. The capability of nuclear energy providers to build SMRs, which function as mini-nuclear power plants providing energy to AI applications from big tech, is invigorating the renewal of this energy sector. SMRs offer a stable, renewable energy source that is less susceptible to supply disruptions or price fluctuations due to global instabilities. Constellation Energy has increased its stock value by over 100% this year, particularly through a contract with Microsoft to supply nuclear energy for the next 20 years. Part of the deal involves reopening the nuclear power plant at Three Mile Island in Pennsylvania, which had been shut down since a near-meltdown in 1979. Ironically, this almost catastrophic event contributed to American skepticism toward nuclear energy at the time. Meanwhile, nuclear energy is experiencing a revival. Of all available renewable energy sources, nuclear energy is one of the few capable of supporting extensive operations like power grids or the hyperscale data centers that AI requires to reach its full potential. Even more significant is the support from federal authorities, who are now also providing strong backing for nuclear energy.