AI Energy Demand Fuels Long-Term Outlook for Small Modular Reactors

The rapid expansion of artificial intelligence is fundamentally altering the trajectory of U.S. electricity demand, ending a decade-long plateau. Between 2007 and 2018, U.S. power generation remained largely flat due to energy efficiency gains and slowing population growth. However, this trend is reversing, with demand now expected to grow by 4% annually through 2030. Leading this surge is the AI sector, which is projected to increase its share of the nation's total electric demand from 4.3% to 11.7%. This shift has left many utilities struggling to secure new, low-carbon energy sources capable of powering massive data center expansions. To address this gap, the industry is turning toward Small Modular Reactors (SMRs). Unlike traditional large-scale nuclear plants, SMRs are designed to lower initial capital expenditures, shorten deployment timelines, and allow for scalable modular expansion. NuScale Power (NYSE: SMR) is a primary developer in this space, competing with other firms such as Oklo Inc., which has already secured several data center contracts. From a macro perspective, Bank of America estimates the global nuclear renaissance could represent a $10 trillion opportunity. However, analysts emphasize that this growth will likely play out over a 30 to 35-year horizon. While the upside potential for companies like NuScale—currently valued at $3.5 billion—is significant, investors face substantial execution uncertainty and an exceptionally long holding period.