AI's Power Needs Outpace Data Center Growth, Impacting Oklo and NuScale Power
Key Takeaways
- •Nvidia CEO Jensen Huang stated that artificial intelligence will need 1,000 times more power than current capabilities can provide.
- •Data center growth, which would typically fuel demand for nuclear reactor developers like Oklo and NuScale Power, appears to be encountering delays.
- •Oklo is still in the pre-application phase of the NRC review process, while NuScale holds the first NRC-certified small modular reactor design but awaits customer procurement, so neither may benefit immediately from AI's power demand.
- •Microsoft signed a 20-year power purchase agreement with Constellation Energy in 2024 supporting the restart of a Three Mile Island generating unit as part of its push to run data centers on carbon-free energy.
- •Pricing points to a reduced likelihood of data center moratoriums in Texas and Missouri, with construction trends there, state leaders' actions, NRC progress on Oklo's applications, and NuScale's procurement developments serving as key indicators for future reactor demand.
Nvidia CEO Jensen Huang has stated that artificial intelligence requires 1,000 times more power than current capabilities can provide. Despite that demand, the growth in data centers — the expansion that would typically drive demand for nuclear reactor developers such as Oklo and NuScale Power — appears to be facing delays.
The prospective link between data center growth and nuclear suppliers has precedent in recent industry deals: Microsoft, for instance, signed a 20-year power purchase agreement with Constellation Energy in 2024 that supports the restart of a generating unit at Three Mile Island, part of Microsoft's effort to power data centers with carbon-free energy.
Oklo remains in the pre-application stages of the Nuclear Regulatory Commission (NRC) review process — a phase in which a prospective licensee engages with NRC staff before a formal licensing application is docketed for full review — while NuScale Power holds NRC approval, having become the first developer with a small modular reactor design certified by the agency, but is still awaiting customer procurement. As a result, neither company may see immediate benefits from AI's power demand.
The situation suggests that reactor demand is contingent on actual data center expansion rather than AI power forecasts alone. Huang's statement appears to highlight a potential mismatch between AI's electricity needs and the current pace of data center growth — one that could affect reactor developers.
Pricing suggests a decreased likelihood of data center moratoriums in Texas and Missouri — measures that would pause new data center construction — aligned with a reduced urgency for new power infrastructure. A slower pace of data center expansion could indicate that the anticipated demand for nuclear reactors from Oklo and NuScale Power may not materialize as quickly as expected.
The trajectory of data center construction in Texas and Missouri will be a key indicator to watch. Any legislative or executive actions by state leaders, such as Texas Governor Greg Abbott or Missouri Governor Mike Kehoe, could influence market odds. Additionally, developments in the NRC's processing of Oklo's applications or in NuScale's customer procurements might further shape expectations around the energy infrastructure needed to support AI's growing power demands.
