In the current push for clean and sustainable energy, tech behemoths are exploring innovative avenues, and Oklo is emerging as a potential leader with its cutting-edge nuclear solutions. Seeing a remarkable 101% surge in its stock in 2024, according to S&P Global Market Intelligence, Oklo (OKLO -11.46%) is attracting keen interest from investors thanks to its promising technology aimed at fulfilling the escalating energy demands of tech firms.
With the rapid expansion of artificial intelligence applications, energy consumption has skyrocketed in 2024. This trend places Oklo, a company specializing in nuclear technology, in the spotlight. They’re developing small modular reactors (SMRs) that exploit “fast” neutrons, enabling a continuous fission chain reaction. Their goal is to tap into the latent energy within spent nuclear fuel, effectively using what remains from traditional nuclear plants. Remarkably, Oklo estimates that this nuclear waste can cater to the U.S. energy requirements for the next century.
SMRs are becoming increasingly appealing to technology companies, especially those with extensive data centers, as well as industrial enterprises. They stand out as a clean and dependable energy source that aligns with the pressing need to meet energy demands while simultaneously helping companies achieve their carbon reduction goals.
Listed on the stock market in May after a strategic merger with AltC Acquisition, a special purpose acquisition company, Oklo counts influential backers like OpenAI’s co-founder Sam Altman among its investors. The company is not losing momentum and secured promising agreements in November with two major data center providers. These letters of intent bound Oklo to supply up to 750 megawatts (MW) of power, expanding their service pipeline to 2,100 MW—further evidence of the robust demand for their eco-friendly energy solutions.
In a pivotal deal last December, Oklo struck an agreement with Switch, specializing in AI, cloud, and enterprise data centers. The “Master Power Agreement” intends to roll out 12 gigawatts of Oklo’s Aurora powerhouse projects by 2044, which the company celebrated as one of the largest corporate power deals on record.
So, what lies ahead for Oklo? While the technology holds promise, it’s crucial to remember that operational SMRs are still several years from fruition. Cost overruns have plagued similar initiatives, like the Utah Associated Municipal Power System (UAMPS) project led by NuScale Power, which ended its agreement in 2023 due to heightened complexities and costs.
Looking ahead, Oklo plans to submit its combined license application (COLA) to the U.S. Nuclear Regulatory Commission within the first half of this year, which will serve as a prototype for subsequent applications. They intend to submit additional COLAs in 2025 and 2026. Meanwhile, site development is already underway at Idaho National Laboratory, where Oklo aims to deploy its initial 15-MW reactor by late 2027.
Despite these promising developments, many experts believe that widespread deployment of SMRs might not occur until the 2030s. Oklo faces significant hurdles before achieving commercial operations and generating substantial revenue, which poses a high-risk factor for potential investors considering an investment in its stock today.
