Used to be that buying a utility stock was so boring! You got the dividend and earnings increases were granted by the county approval of local utility rate increases. That has now changed! Demands for power in this country have skyrocketed with the demands from AI, Crypto currencies and a reliable power source for companies who have had power disruptions from solar and wind.
Big Tech is going big on nuclear power. Amazon has joined other tech giants Google and Microsoft, announcing $500M of investments in atomic energy in a bid to satiate its data center demands and artificial intelligence ambitions while continuing to meet its clean energy goals.
Amazon on Wednesday said it signed a deal with Dominion Energy to explore building a small modular nuclear reactor near the North Anna station. Amazon would also invest in reactor developer X-energy and collaborate with regional utility consortium Energy Northwest. Just days before, Google announced an agreement to purchase power generated from multiple small modular reactors to be built by nuclear energy startup Kairos Power. Not only this, Microsoft has also teamed up with Constellation Energy to resurrect a unit of the Three Mile Island nuke plant in Pennsylvania.
The fact of the matter is that AI models require loads and loads of electricity. This is because of the vast amount of data that these models need to compute and generate responses. To give an idea, a basic text response from these AI models can consume enough energy to power a 10-watt LED bulb for an hour. In comparison, a typical Google search can consume electricity equivalent to powering a 10-watt LED bulb for about two minutes. In that context, nuclear energy appears favorable over wind or solar, as nuclear creates a larger amount of power that is stable and consistently available on demand.
The recent nuclear bids from technology firms have raised the prospects of an entire sector. Nuclear power plant developers Oklo and NuScale Power saw their stocks jump over 40% on Amazon’s news. Similarly, investors bought shares of established independent power producers with nuclear footprints like Vistra, Constellation Energy, and Dominion Energy. Even uranium-related names joined the party.
Great Quotes
“You will never have a greater or lesser dominion than that over yourself. The height of a man’s success is gauged by his self mastery. The depth of his failure is measured by his self abandonment. This law is the expression of eternal judgement. He who cannot establish dominion over himself will never have dominion over others.” – Leonardo da Vinci
Picture of the Week
Autumn in Central Park, NY
All content is the opinion of Brian Decker
