The growing need for electricity to power artificial intelligence and massive data centers in the U.S. promises to usher nuclear energy into a new era of expansion, opening up opportunities for the industries that provide the fuel for the plants.
The U.S. is the world’s top producer of nuclear power with 94 reactors in operation. The country pioneered nuclear energy for civilian use in the late 1950s, but now relies on other countries for most of the mining, conversion and enrichment of the uranium used to fuel the reactors.
Most of the existing reactors were built between 1967 and 1990, according to the U.S. Energy Information Administration.
Wider acceptance of nuclear energy among Americans who want cheaper, emissions-free electricity favors development of new nuclear stations, although the high cost and time they take to approve and build compares unfavorably with natural gas-fired or solar and wind power plants.
The development of small modular reactors and micro-reactors, with generation capacity anywhere from less than 10 megawatts to 300 megawatts, is expected to lower costs and shorten the time to bring plants online. The Trump administration aims to help speed up the process.
“We know how to make these things and how to operate them because we’ve been putting them on nuclear submarines and aircraft carriers since the 1960s,” said Scott Helfstein, head of investment strategy at ETF company Global X. “The technology now is about how to scale, how to make it efficient, how to keep it safe.”
First commercial use of the new reactors looks likely around the end of the decade, Vexler added.
Industry players highlight uranium enrichment capacity as the key bottleneck to building a U.S. nuclear-fuel supply chain given high dependence on Russian enrichment, analysts at UBS said in a recent report.
“We expect energy security initiatives to drive continued investment in U.S.-origin enrichment services as U.S. nuclear reactor deployments increase,” they said.
The U.S. imports around two-thirds of its enriched uranium, and about a third is provided by Urenco, owned by the governments of the U.K., the Netherlands and two German utility companies, from an enrichment plant in New Mexico.
“Whether from AI or other types of software service, like cloud, the demand for energy consumption is going up,” Helfstein of Global X said.
Big-tech companies favor renewable energy to power their operations, but they require large amounts of round-the-clock electricity that solar and wind generators don’t provide.
“They’re pivoting from green to carbon-free, so that’s why you’re seeing a lot of them looking at nuclear power, which doesn’t create carbon emissions,” said Gary Cunningham, director of market research at Tradition Energy.
The EIA expects electricity sales to the commercial sector to grow 3% in 2025 and a further 4.5% in 2026, driven by data centers and growth in manufacturing activity.
Natural gas is the main fuel used to generate electricity in the U.S., accounting for 42% in 2024, and natural gas producers like Pittsburgh-based EQT are gearing up for the digital boom. EQT estimates that AI and data centers and coal plant retirements will drive an additional 10 billion cubic feet a day of power-sector demand for natural gas by 2030.
“In the U.S., natural gas-fired power is expected to meet immediate demand, acting as a bridge to nuclear,” analysts at Morgan Stanley said in a recent report. “The long-term advantages of nuclear-such as price stability, high reliability and energy density-are underappreciated in current market narratives.”
Source: Wall Street Journal
