Nuclear's AI Boom: How $NULR and $OKLO Could Reshape Energy Markets

Small modular reactor (SMR) technology is experiencing a dramatic resurgence as artificial intelligence data centers grapple with unprecedented power demands, creating a potential windfall for early-stage nuclear companies. NuScale Power ($NULR) and Oklo ($OKLO) have emerged as leading contenders to capture a portion of a market that could represent a $2.2 trillion investment opportunity over the next 25 years, according to industry projections. Yet despite the tantalizing growth prospects, both companies face formidable technological, regulatory, and commercial hurdles that could determine whether SMRs become a cornerstone of the global energy transition or remain niche players in the nuclear sector.

The Perfect Storm: AI Demand Meets Nuclear Innovation

The convergence of two powerful trends—explosive AI adoption and renewed nuclear interest—has created an unexpectedly bullish environment for SMR developers. Major technology companies including Meta, Google, and Microsoft have begun exploring nuclear power partnerships to fuel their data center expansion, fundamentally shifting the calculus for clean energy investments.

Small modular reactors represent a fundamental departure from traditional nuclear power plants. Rather than massive, centralized facilities requiring billions in upfront capital and decades of development, SMRs are smaller, factory-built units that can be deployed at scale:

• Smaller capital requirements: Individual units cost hundreds of millions rather than billions
• Flexible deployment: Can be located closer to end-users, including data centers
• Factory construction: Standardized manufacturing potentially reduces costs and timelines
• Scalability: Multiple units can be added incrementally to meet growing demand

The global nuclear capacity is projected to double by 2050, with SMRs expected to capture a meaningful share of this expansion. Industry analysts estimate that AI data centers alone could require significant new baseload power capacity within the next 3-5 years, creating an urgency that traditional nuclear development timelines cannot match.

NuScale Power has positioned itself as the most advanced SMR developer in the U.S., with regulatory approvals and pre-development work on several projects. Oklo, a newer entrant backed by prominent venture capital investors, is pursuing advanced reactor designs that could offer additional advantages including reduced waste concerns and enhanced safety features.

Formidable Obstacles and Unproven Viability

Despite the compelling narrative, significant risks threaten to derail the SMR revolution. The technology, while conceptually sound, remains largely unproven at commercial scale. NuScale has yet to complete its first commercial unit, and timelines for deployment have slipped repeatedly over the past several years.

Key challenges facing both companies include:

• Regulatory uncertainty: The Nuclear Regulatory Commission (NRC) continues to refine safety and licensing frameworks specifically for SMR designs, creating timeline unpredictability
• Unit economics: It remains unclear whether smaller reactors can achieve the cost-per-megawatt efficiency needed to compete with renewables plus storage solutions
• First-of-a-kind risks: Both companies face engineering and construction execution risks on pioneering projects
• Supply chain maturity: The specialized components and workforce required for SMR manufacturing don't yet exist at scale
• Mainstream adoption uncertainty: Data center operators may ultimately prefer renewable energy plus battery storage or other baseload solutions

Regulatory delays have already impacted NuScale's commercialization timeline. The company's partnership with the Department of Energy on the Carbon-Free Power Project has experienced multiple postponements, demonstrating how regulatory and political variables can derail even well-funded initiatives.

Moreover, the competitive landscape has intensified. Established nuclear operators, renewables developers, and energy storage companies are all positioning for the data center power opportunity, ensuring these SMR companies won't capture the market unchallenged.

Market Context: Nuclear's Unexpected Comeback

The nuclear sector has experienced a notable perception shift over the past 18 months. What was once considered a declining industry—facing aging infrastructure, high decommissioning costs, and public skepticism—has been reframed as essential infrastructure for decarbonization. Climate imperatives, energy security concerns following Russia's invasion of Ukraine, and the sheer energy density requirements of AI have fundamentally altered regulatory and investor sentiment.

This backdrop explains why NuScale and Oklo command premium valuations despite being pre-revenue or minimal-revenue companies. Investors are pricing in not just potential data center contracts, but broader recognition of nuclear power's role in a low-carbon economy.

However, this enthusiasm carries inherent volatility. Regulatory announcements, project delays, or technological setbacks at either company could trigger sharp stock declines. Conversely, a commercial project success—particularly a functioning data center-powered SMR facility—could trigger explosive upside moves as investors recognize the market's true scale.

The sector also benefits from geopolitical tailwinds. The U.S. government has expressed strong support for domestic nuclear manufacturing as part of energy independence and supply chain resilience strategies. Potential subsidies, tax credits, or direct government investment could materially improve unit economics for SMR developers.

Investor Implications: High-Risk, High-Reward Positioning

For equity investors considering positions in $NULR or $OKLO, the risk-reward profile reflects a classic high-growth, pre-profitability company dynamic with additional execution and technological risks.

The bull case hinges on several catalysts:

• Signed data center contracts with major technology companies
• Successful regulatory milestones demonstrating near-term commercialization
• Government subsidies or direct investment that improve unit economics
• Technological validation through functioning commercial units

The bear case emphasizes:

• Persistent delays in commercialization or regulatory approval
• Disappointing unit economics that question commercial viability
• Competition from renewables + storage proving more cost-effective
• Cash burn concerns before revenue generation

The $2.2 trillion investment opportunity cited in industry projections represents an enormous total addressable market, but it's crucial to recognize that this figure encompasses all nuclear capacity additions over 25 years, not SMR-specific opportunity. SMRs' realistic market share remains highly uncertain.

For risk-tolerant investors with multi-year time horizons, positions in $NULR or $OKLO represent speculation on nuclear power's role in powering AI infrastructure. The potential for multi-baggers exists if either company achieves commercial success and signs major contracts. However, investors should expect significant volatility and acknowledge that technology risk, regulatory risk, and market adoption risk could eliminate shareholder value entirely.

Conversely, more conservative investors seeking nuclear exposure might consider established utilities or energy companies with diversified portfolios that are investing in SMR technology, rather than backing pre-commercial developers with unproven business models.

Looking Forward: The Next Critical Months

The next 12-24 months will prove pivotal for the SMR sector. Milestones to watch include regulatory decisions, project financing announcements, and most importantly, evidence that data center operators are willing to sign long-term power contracts for SMR capacity. Until commercial demand becomes tangible, the bull case remains heavily dependent on technological and regulatory optimism.

The intersection of AI-driven energy demand and climate imperatives creates genuine opportunity in SMR technology. Whether NuScale Power and Oklo successfully capture this opportunity—or whether the market ultimately chooses alternative solutions—remains an open question that will significantly impact investor returns over the coming decade.