All Things Nuclear and AI
- SWS
- Oct 1
- 5 min read
Energy Policy Perspectives Vol. 11 - October 1, 2025
Nuclear energy is certainly a hot topic. The rapid pace of artificial intelligence development pronouncements and AI data/computation center deal announcements leaves all of us wondering where all of the incremental power supplies will come from and when it will be realistically both needed and be deliverable. These speculations have led to numerous Executive Orders (EOs) from President Trump seeking to accelerate nuclear energy commercialization. Investors have likewise gravitated to IPP stocks and other power tech companies now within the orbit of the AI story.
DOE activity ramping up. Yesterday, the Department of Energy announced that it has selected four more companies through its Fuel Line Pilot Program (for a total of five now) to build new nuclear fuel fabrication facilities in support of the new nuclear reactor technologies in development. The DOE’s nuclear fuel pilot program follows the DOE’s Reactor Pilot Program that has selected ten reactor companies for pilot projects. While the DOEs descriptions of the programs remain somewhat vague thus far, the players and the locations of the projects are now settled which is a significant advancement in the development trajectory of new nuclear reactor commercialization year-to-date.
More nuclear fuel cycle activity to come. The U.S. nuclear fuel cycle industries have been allowed to atrophy even more than new reactor development in recent decades as the U.S. has relied heavily on foreign sources of both nuclear materials and fuel fabrication expertise/services. Difficult policy questions remain to be answered regarding spent fuel reprocessing and long-term nuclear waste storage. The nuclear fuel cycle is a diverse and complicated set of processes that extend well beyond reactor fuel fabrication that will also need to be addressed, leading to further significant infrastructure investment opportunities and new companies. We expect more DOE announcements along the nuclear fuel chain in the months to come.
Bloomberg report. On Monday, Bloomberg Intelligence issued a report suggesting that about 53 GW, $350 billion of new nuclear investment potential by 2050 will be needed to support AI electricity demand. We have little doubt that an incremental nuclear generation investment of that magnitude will be required by 2050. In fact, we believe that the investment potential and generation capacity potential could be substantially larger than Bloomberg calculated in its estimate. However, making a discreet calculation of specific generation types for specific customer types in a fungible market without regard for all the other apparent huge demand for dispatchable power and a dynamic power asset market, including unknown generation retirements and new transmission over decades, simply seems like silly speculation.
Some perspective would be useful, play the long game and diversify. While the AI excitement is palpable, some of the benefits investors are grasping for within the AI orbit have a fairly long tail, i.e. when the first commercial nuclear units will produce revenues and future data center electricity demand. We saw someone asked on CNBC yesterday about the potential for data centers to get more efficient over time and whether all of the excitement for power demand might not materialize and might that not affect IPP stock valuations. The question was a variation of the question of what if AI does not meet the hype of expectations or the returns on massive AI CAPEX investments prove disappointing? The interviewee’s response was perfect. The electricity demand growth story is not solely an AI data center story. It is a manufacturing, technology, robotics, EV, climate change, broad economy electrification story. The story does not end with AI. While AI technology and IPP names have been dominant in 2025, investors should not forget that there are plenty of areas in which to play the electricity growth theme. Investor owned utilities own over 50% of U.S. electricity generation and utility construction services companies build the grid infrastructure. The combined TAM (utility CAPEX) for just these two industries could be over $10 trillion as well.
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