Nuclear reactors are an “emerging space” to meet increasing energy needs

Big Tech has gone nuclear for its AI data centers and has turned to energy startups to build nuclear reactors to meet the energy needs of artificial intelligence. This ranges from Amazon (AMZN), Microsoft (MSFT) and Alphabet's Google (GOOG, GOOGL) to recent agreements with providers.

George Gianarikas, managing director of Canaccord Genuity, joins Julie Hyman and Josh Lipton for a conversation about investing in nuclear energy adoption, starting with stocks like small modular reactor developer NuScale Power (SMR) and uranium materials company ASP Isotopes (ASPI).

“There are the energy suppliers (XLU) who invest directly in the reactors and sign the power purchase agreements with some of the big hyperscalers. But these are more indirect ways to invest in the trend,” Gianarikas tells Yahoo Finance, claiming that the U.S. energy grid is “not ready to handle the surge in power consumption for AI.”

“Some private companies actually need what’s called an NRC (US Nuclear Regulatory Commission) permit to actually build these reactor designs. The only company we cover, Nuscale ticker symbol SMR, actually has this very approval from the US Nuclear Regulatory Commission, says Gianarikas.

He goes on to explain how important uranium enrichment is to this process, which is where ASP Isotopes comes in: “They take the raw material from the miners and then enrich it, isolate the isotope needed for a fission reaction and then sell it .” So there’s a whole food chain that’s really important in making all of these things happen.

Mike Laufer, co-founder and CEO of Kairos Power, sat down with Yahoo Finance earlier this week to discuss the energy startup's agreement with Google to build small modular reactors.

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This post was written by Luke Carberry Mogan.