By Kavya Balaraman<\/p>\n
April 9 (Reuters) – Big Tech is reshaping the funding landscape for new nuclear technologies as it seeks to bolster electricity supply for power-hungry AI data centers, inking deals that offer nuclear companies both funding and a clearer path \u200cto making money.<\/p>\n
Several U.S. firms are developing new modular reactors that are smaller, more advanced and scalable than conventional nuclear plants. \u200cBut none have begun commercial electricity production yet as projects face challenges such as financing constraints and first-of-its-kind risks.<\/p>\n
However, the race to secure adequate energy to power data centers amid \u200bthe burgeoning demand from AI is giving a fresh boost to the sector.<\/p>\n
In January, Meta agreed to help fund the development of two Terrapower units capable of providing as much as 690 MW of power. It has also signed a deal with Oklo to develop a 1.2 GW nuclear technology campus in Ohio.<\/p>\n
Amazon, meanwhile, is working with X-energy to bring online more than 5 GW of small modular reactors in the U.S. by 2039, while Alphabet’s \u200cGoogle has signed an agreement with Kairos Power, aiming \u2060to bring online its first small modular reactor by 2030.<\/p>\n
With these deals, tech giants introduce their top-rated corporate balance sheets into a sector historically reliant on the very regulated utility rate bases, said Shioly Dong, senior analyst \u2060at BMI, a unit of Fitch Solutions.<\/p>\n
“They create the revenue certainty that commercial banks will require for the construction debt,” she said.<\/p>\n
INVESTORS INTERESTED, BUT CAUTIOUS<\/p>\n
U.S. electricity use is poised to increase by 1% this year and 3% next year, according to the Energy Information Administration, driven largely by data center demand.<\/p>\n
Against this backdrop, \u200bsmall \u200bmodular reactors are emerging as more financeable nuclear alternatives because their modular scale and \u200bshorter construction timelines reduce upfront capital exposure, said Tim \u200cWinter, portfolio manager of the Gabelli Utilities Fund (GABUX) at Gabelli Funds, adding that he is closely monitoring companies like NuScale and Oklo.<\/p>\n
“The industry needs “someone” to take on the risks of cost overruns and delays. The degree the hyperscalers are willing to do that will determine just how much of a boost (these agreements give the sector),” he added.<\/p>\n
AI demand is prompting customers to enter into long-term agreements that can support project development, said Oklo spokesperson Bonita Chester. The company’s agreement with Meta, for instance, includes funding to help secure nuclear fuel and advance the first phase of its Ohio project.<\/p>\n
The \u200cprospect of long-term power buyers is also drawing the interest of some institutional investors \u200bto the sector, which has historically depended on government support and venture capital funding.<\/p>\n
“We \u200bhave started to hear that banks are getting excited and interested \u200bin deal-making in the space, which would be a big development \u2013 we haven’t seen that yet,” said Tess Carter, \u200cassociate director of the energy and climate practice at Rhodium \u200bGroup.<\/p>\n
However, the industry – described by analysts \u200band experts as “advanced nuclear” – still faces many hurdles, including high construction and technology risks, due to which institutional investors, while interested, are not yet stepping into the sector at scale.<\/p>\n
A looming skills shortage and competition with other industries – including data centers – for workers like \u200belectricians and pipefitters could become a chokepoint as \u200cthe industry looks to scale up, a recent report by the Nuclear Scaling Initiative noted.<\/p>\n
“Commercialization and large-scale deployment still depend on \u200bexecution across licensing, fuel supply, construction and financing, so demand alone is not the only factor in accelerating commercialization of \u200badvanced nuclear,” said Oklo’s Chester.<\/p>\n
(Reporting by Kavya Balaraman; Editing by Saumyadeb Chakrabarty)<\/p>\n","protected":false},"excerpt":{"rendered":"By Kavya Balaraman April 9 (Reuters) – Big Tech is reshaping the funding landscape for new nuclear technologies…\n","protected":false},"author":2,"featured_media":577860,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,7258,253759,135352,45528,74,253760],"class_list":{"0":"post-577859","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-data-centers","12":"tag-modular-reactors","13":"tag-nuclear-technologies","14":"tag-oklo","15":"tag-technology","16":"tag-venture-capital-funding"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/577859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=577859"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/577859\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/577860"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=577859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=577859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=577859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}