AI “power-swallowing behemoths” are stirring up a wave of nuclear power restarts! Is a new round of growth in the nuclear energy industry about to begin?

The Zhitong Finance App learned that as various US tech giants have signed nuclear power agreements to meet the electricity needs of artificial intelligence, the nuclear energy industry has once again entered the eyes of investors, and analysts are also beginning to look forward to the industry's optimistic prospects.

Is nuclear energy making a comeback?

Nuclear power plants continue to reopen, but the first question the market faces is can global supply meet the growing demand for clean energy? On October 1, Aniket Shah, Jefferies' global head of sustainability and transformation strategies, was interviewed to discuss his position on the resurgence of nuclear power amidst the artificial intelligence boom.

Shah shared that the nuclear boom was no surprise. Looking back, the US signed an important partnership many years ago to increase the supply of nuclear energy, which shows that the value of the industry is not unknown or recent.

He added that big tech companies will be the main catalysts and will influence the entire market. These companies will invest millions or even billions of dollars in nuclear energy, making it easier for others to follow suit. Shah said some key areas of investment will be small modular reactors and nuclear fusion.

According to information, Google (GOOGL.US) recently stated that it will buy electricity from a series of small nuclear power reactors (SMR) produced by the nuclear energy startup Kairos Power. Meanwhile, other tech giants, including Microsoft (MSFT.US) and Amazon (AMZN.US), are already betting on nuclear power. Microsoft has agreed to buy electricity from the shut down Three Mile Island (Three Mile Island) nuclear power plant in Pennsylvania, and Amazon recently purchased a nuclear power data center in Pennsylvania.

Shah also acknowledged that both parties in the US agree on the nuclear energy boom, which explains why regulations and laws favorable to nuclear energy can be passed quickly. However, while the infrastructure for nuclear power is being assembled, Shah is still concerned about implementation. He stressed that the United States does not have enough skilled labor and resources to make the nuclear energy boom a reality and must work very hard to achieve this goal.

Nuclear energy is expected to grow amidst the AI boom

One of the most opportunistic investment themes in 2024 is artificial intelligence, and the other is electrification, both of which require large amounts of electricity. The surge in electricity demand has in turn fueled the rise in utility stocks. Evercore ISI managing director Durgesh Chopra was interviewed on October 4 to discuss how utility companies can benefit from AI-driven electricity needs.

Chopra emphasized that for companies like Vistra Energy (VST.US) and Constellation Energy (CEG.US), the biggest catalyst is data center demand for all-weather clean energy. Therefore, nuclear power companies must seize the opportunity and sign long-term contracts as soon as possible to lock in future growth.

Currently, several projects are being prepared in the US, totaling about 1.5 GW of energy, which will position nuclear power plants as the next major event in the energy sector. On the other hand, balancing supply and demand will be a key challenge facing enterprises.

Despite the many challenges, Chopra believes the utility market is ready to grow. There has been no increase in demand for utilities in the past decade, but things have finally changed in the industry. Overall, as the inflation rate falls, the industry is likely to experience significant benefits. Chopra also emphasized that the industry's growth will pay off in five to seven years.