The AI revolution is fully upon us, and it is power hungry. As it expands, we need more and more energy for it. There’s only one major problem. The global energy grid can’t handle the voracious and exponentially growing electricity demand.
I don’t know which tech companies will dominate AI in the future. What I do know is they’re all going to need enormous amounts of reliable electricity in their quest for supremacy. So let’s discuss nuclear power, the picks-and-shovels play for artificial intelligence.
Solar’s Rapid Growth Isn’t Enough
5 years ago solar power in the US contributed just 3-4% to the energy grid. With improving technology and government mandates for clean energy, solar now makes up 8% of the energy grid’s share, with coal energy dropping the fastest. Meanwhile, nuclear power in the US hasn’t increased over the last 5 years, staying consistent at about 18% (10% globally). Natural gas has also held steady, while wind power has only experienced slight upticks.
The fastest growth is in solar, but there are two issues with solar’s limitations.
First, you need light. You lose efficiency on rainy days or cloudy days, and there’s no sunlight at night. So now you also need batteries to store any extra unused power.
Second, you need a lot of space. There’s only so many rooftops you can stick solar panels on.
Tech firms driving AI growth need clean, continuous, nonstop power. Nuclear energy, with zero carbon emissions and zero atmospheric pollution, is the only technology that fits that requirement.
Nuclear’s Asymmetric Strength and Efficiency
Five AI data centers needing 1 gigawatt of continuous electricity are expected to come online in 2026. The power needed for just one of these AI data centers is the equivalent of powering 750,000 to 1 million homes. Let’s compare how much land is required to supply the necessary power in clean energy.
- Solar: You’ll need 45 to 75 square miles of land covered in solar panels, including industrial sized battery arrays to supply electricity when the sun sets.
- Wind: You’ll need 200 to 300 square miles of land covered by hundreds of wind turbines.
- Nuclear: You’ll need 1 square mile for a traditional plant, or just a few acres for a Small Modular Reactor (SMR) facility.
The asymmetric efficiency is staggering. A single uranium fuel pellet the size of a fingertip yields the same energy as one ton of coal, 17,000 cubic feet of natural gas, or 149 gallons of oil.
Bipartisan Green Light
The ADVANCE Act, designed to fast track nuclear deployment and reduce regulatory costs, received overwhelming bipartisan support, passing through the House on a vote of 393-13, and through the Senate with a vote of 88-2. President Biden signed it into law on July 9, 2024.
Then on May 23, 2025, President Trump signed four executive orders designed to build on top of the ADVANCE Act and supercharge it, with a mandate to quadruple US nuclear energy capacity from about 95 gigawatts today to 400 gigawatts by 2050.
AI data centers have pushed power consumption to record highs, and uranium has now moved into the spotlight. In turn, government decision making has led to a surge in uranium equities across the board.
But Aren’t Nuclear Disasters Catastrophic?
My immediate thoughts when it comes to the risks of nuclear are the highly publicized and disastrous events of Chernobyl in 1986 and Fukushima in 2011.
Public support for nuclear power has directly plummeted after each of these accidents occurred, and rightly so. But much like an airplane that vanishes in a water landing and gets most of the media attention, statistically car accidents cause far more deaths. The same can be said about nuclear risk.
Among all global electricity generating sources, nuclear power is statistically one of the safest. Data gathered in 2020 by Our World in Data shows coal causing the most global deaths per terawatt-hour of electricity at 24.6, while nuclear is the second safest of all sources of energy at 0.03. Solar is the safest source at 0.02.
Major accidents are terrible, but they have also led to improvements in technology.
One of the more exciting developments is the Small Modular Reactor. Rather than taking a decade to construct a massive power plant, SMRs are designed to be factory-built reactors. They would take up a fraction of the land, carry built in automatic safety mechanisms, and can be placed directly adjacent to an AI data center or data center cluster.
NuScale Power (NYSE: SMR) is currently the only company to have an SMR design officially certified by the US Nuclear Regulatory Commission.
What About Nuclear Powered Cars?
Could nuclear efficiency put an end to the EV "range anxiety" that is still common today?
Putting a nuclear reactor in a car would be dead on arrival. Here’s why.
- Too Much Weight: Even a small reactor would require a thick shield to protect against radiation, weighing down the car by a full ton in weight, or more.
- Radiation Exposure: A car accident could also cause a reactor to crack, risking a radiation leak.
- Source of Weapons: Reactors in cars could be stolen, maybe not as easily as catalytic converters, but it could lead to materials being harvested for dirty bombs or radiological weapons.
Cars are actually already nuclear powered anyway, since they draw electricity from a grid partially powered by nuclear energy. Let’s keep it that way.
What are the Real Risks?
The growing demand for nuclear energy is compelling, so naturally I’m looking for investment opportunities. Nuclear energy is derived from its base material, which is uranium. We need to explore all forms of risk that we can think of.
- Nuclear Waste and Long Term Storage: Spent nuclear fuel rods stay radioactive for thousands of years. Thankfully, nuclear waste doesn’t take up much space, and modern facilities can store their own waste in sealed, steel-and-concrete casks. Certain modern reactor designs such as Oklo’s (NYSE: OKLO) are being developed to reprocess and recycle spent fuel, further reducing waste volumes.
- Weapons and Plutonium: Inside a nuclear reactor, some uranium naturally turns into plutonium, which is the main ingredient used to make nuclear bombs.
- Commodity Volatility and Permitting: Uranium prices, like other commodities, can experience sharp swings based on how power companies buy it. Major uranium miners such as Cameco (NYSE: CCJ) are potentially exposed to stretched valuations, price volatility as well as production disruptions.
- Permitting Delays: Getting permits to build new facilities can take a long time due to government paperwork. Also, public resistance or NIMBYism (Not In My Back Yard) can lead to delays or even cancellation through strategies such as lawsuits or protests.
- Early Stage Risk of Nuclear Involved Companies: Currently, there are multiple privately held companies backed by the likes of billionaires Bill Gates, Peter Thiel, and Sam Altman. Early stage reactor developers can face a variety of execution delays, as well as potential cash shortages and stock dilution.
Own the Sector via URA
The nuclear market today is highly fragmented. There are multiple competing reactor designs, and we don’t know which technology will become the standard over the long term. Rather than trying to guess which developer or miner will dominate the next decade, I believe capturing broad sector exposure might be a more prudent path.
The Global X Uranium ETF (NYSEARCA: URA) provides diversification across global uranium miners, equipment manufacturers, and nuclear technology firms. By owning the sector ETF, you can participate in the picks-and-shovels opportunity of AI energy demand while spreading risk across the entire industry.
The Next Generation of Energy
To power the exponentially growing AI demand, more nuclear energy will be required to make that feasible. Reach out to us today to evaluate your personal situation and explore opportunities for your long term wealth strategy.