Why AI is driving demand for nuclear power
Oklo (NYSE: OKLO) has become one of the market’s most closely watched nuclear energy stocks, and its long-term prospects are tied to a powerful trend: the surging electricity demand created by artificial intelligence.
Investment banks, consultants, and industry analysts have projected that as much as $7 trillion could be spent on AI data-center infrastructure by 2030. Expanding that infrastructure will require reliable access to enormous amounts of electricity.
A substantial portion of the investment will go toward materials and labor, but energy generation and transmission could account for a significant share. Consulting firm McKinsey & Co. says incumbent providers cannot meet current demand for power and predicts that closing the gap will require one of the largest infrastructure buildouts in modern history.
OpenAI Chief Executive Sam Altman recognized the challenge years ago. He became an early investor in Oklo in 2015, and the company’s small modular reactor designs could eventually help power energy-hungry data centers. Oklo has also secured agreements with major technology companies, including Meta Platforms (NASDAQ: META).
Oklo nevertheless remains pre-revenue and has not received regulatory approval to commercialize its reactor designs. Regulators rejected its initial application in 2022, and the company resubmitted it in 2025. Although the review has reportedly progressed, there is still no confirmed date for final approval.
Oklo has influential backers and a promising technology pipeline, but its roughly $8 billion valuation is almost twice that of NuScale Power (NYSE: SMR), a competitor with regulatory approval and a potentially important commercial catalyst on the horizon.
NuScale combines a lower valuation with a major milestone
NuScale and Oklo are developing small modular reactors for many of the same customers and are benefiting from the same rise in AI-related power demand. NuScale’s market capitalization, however, is approximately $4.6 billion after a sharp decline, giving it a substantial valuation discount to Oklo.
NuScale has already secured regulatory approval for its reactor design. Its largest project, a proposed 6-gigawatt deployment with the Tennessee Valley Authority, is also approaching a potentially decisive financing and contracting milestone.
The nuclear industry has struggled to secure major financial commitments from prospective customers. Oklo’s agreement with Meta, for example, reportedly included only $25 million in binding commitments—a small amount relative to the multibillion-dollar cost of a full-scale project. The company has suggested that the agreement contains additional binding provisions, but the total amount Meta would owe if it withdrew remains unclear.
Image source: Getty Images.
NuScale faces an even more uncertain near-term situation. Its Tennessee Valley Authority project has received little or no financial commitment, which helps explain the market’s discount. That discount could narrow, however, if the project advances toward a definitive power purchase agreement.
During its latest earnings call, NuScale management said ENTRA1, its financing partner, continued discussions with the Tennessee Valley Authority. Chief Executive John Hopkins said the company was prepared to proceed once the necessary power purchase agreements were finalized, while the chief financial officer indicated that an agreement could be completed by the end of 2026.
A definitive power purchase agreement would obligate the utility to buy electricity from the project, providing revenue visibility and helping clear the way for construction. It could also improve NuScale’s ability to secure the remaining financing needed for deployment.
If the company reaches that milestone on schedule, it could strengthen its position relative to Oklo by combining regulatory approval, a sizable customer pipeline and a validated commercial agreement. That would give investors clearer evidence that NuScale’s technology can move from development toward deployment.
What investors should consider before buying NuScale
NuScale’s valuation discount reflects real risks, including uncertainty around the Tennessee Valley Authority project, future financing needs, construction costs and execution delays. Oklo also carries substantial risk because its commercial future depends on regulatory approval and its ability to convert prospective agreements into revenue.
For investors willing to accept those risks, NuScale may offer greater near-term upside than Oklo. A definitive power purchase agreement could validate its commercial strategy and narrow the valuation gap, but until that commitment is secured, the stock remains a high-risk investment in the future of nuclear power.