This week saw Google grabbing multiple headlines concerning artificial intelligence (AI). Despite how the company’s stocks performed, not everything was pessimistic.
Of course, the news of
search losing preference
The leading headline focused on AI chatbots such as ChatGPT among iPhone users, while the Department of Justice keeps investigating potential antitrust actions against the firm’s advertising technology operations. Nonetheless,
Alphabet Inc. (NASDAQ: GOOGL)
subsidiary continues to spend heavily on AI infrastructure and recently entered an agreement with Elementl Power to develop three new nuclear development sites to power its surging data center energy needs.
Elementl Power is a privately owned company that focuses on the development and funding of cutting-edge nuclear power initiatives for customers looking for environmentally friendly energy options. Each project they propose aims to generate
600 megawatts
in power and function under Elementl Power’s oversight.
Google wasn’t the initial corporation to adopt nuclear energy, as
Microsoft Corp (NASDAQ: MSFT)
and
Amazon Inc. (NASDAQ: AMZN)
They have also entered into agreements with suppliers of nuclear power over the past few months. However, this serves as a validation of an overarching pattern: major technology companies are seeking out environmentally friendly (and expandable) energy sources for their continuously growing network of data centers.
Shifts in the energy sector might offer investment opportunities as publicly traded companies in clean energy join forces with technology firms to drive the development of advanced AI models—and here’s why.
The Intersection of AI and Nuclear Technology: Factors Fueling the Interest
Has your home circuit breaker ever tripped when multiple devices were operating at once? This inconvenience pales compared to the challenges faced by technology firms developing artificial intelligence, yet both situations involve an overload issue—too much demand for power. The massive amounts of electricity needed for AI data centers could necessitate exploring different energy sources as we move ahead.
Nuclear power attracts businesses developing AI systems due to several advantages. Firstly, it serves as a pristine source of energy, crucial for corporations such as Google and Microsoft aiming for zero-carbon footprints and adhering to stringent ESG criteria. Additionally, reliability plays a key role since nuclear plants provide steady output without being influenced by variables like weather conditions or daylight availability.
As the demand grows for maintaining data center efficiency and adhering to environmental standards, clean energy options such as nuclear power will remain attractive choices.
tech sector
Even though numerous new nuclear facilities aren’t expected to become operational for quite some time, it’s crucial for AI developers to seize this moment and establish agreements to prepare for their upcoming energy requirements.
3 Notable Participants Joining the Fun
Eager to put money into the future of nuclear energy? Consider these three publicly traded energy firms that have inked nuclear power agreements with major technology corporations—adding them to your investment portfolio could be worthwhile.
1. Constellation Energy: The Nuclear Powerhouse Fueling Microsoft’s AI Prospects
[content-module:Forecast|NASDAQ:CEG]
Constellation Energy (NASDAQ: CEG)
It is the leading generator of nuclear power in the U.S., and the firm has recently reinforced this position through negotiations.
20-year partnership with Microsoft
.
In October, Constellation
announced a plan
To restart a transformer at Three Mile Island in Pennsylvania as part of a $1.6 billion initiative to rejuvenate the idle facility. The firm intends to utilize the location to supply Microsoft data centers with 835 megawatts of nuclear energy.
CEG is
increased by more than 50% in the past three months
, driven by a 10% increase in year-over-year (YOY) revenue.
The firm recently announced higher than expected earnings for both revenue and profit, and possesses
consensus Moderate Buy rating
with an average
price target of $282
.
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2. NuScale Power: Compact reactors offer significant potential for AI data centers
[content-module:Forecast|NYSE:SMR]
NuScale Power (NYSE: SMR)
becomes the first U.S. firm to secure regulatory approval for small modular reactors (SMRs). These reactors necessitate fewer infrastructural elements compared to conventional large facilities.
These compact, scalable reactors offer a wider range of options for companies looking to scale their operations-and NuScale’s
partnership with Standard Power
highlights these perks.
Under the agreement, Standard Power plans to
deploy 2 gigawatts
Of SMR energy to data centers located in Pennsylvania and Ohio.
NuScale has a
Moderate Buy rating
Based on five analyst reports, however, the latest one from BTIG Research assigned a rating to the stock.
$20 price target
, which would suggest an
upside over 30%
.
3. Oklo: Startup Secures Huge AI Power Agreement with Switch
[content-module:Forecast|NYSE:OKLO]
Oklo Inc. (NYSE: OKLO)
might not be as large as Constellation, but the
handle it signed with Switch
Last December could potentially overshadow the deal Constellation made with Microsoft.
As one of the top creators and managers of data center complexes, Switch employs 100% renewable energy for its initiatives and remains dedicated to environmental responsibility throughout its activities.
As part of their new collaboration, Oklo has committed to supplying
12 gigawatts
By 2044, this indicates increasing trust in Oklo’s small modular reactor (SMR) technology and its capacity to cater to the energy-demanding artificial intelligence industry.
OKLO shares have a
Moderate Buy rating
with an average
price target of $46
, indicating
benefit exceeding 70%
.
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