Nuclear Names Surge After Three Mile Island Planned Restart To Power Microsoft Data Centers

In what is going to be seen as a major tailwind for up and coming nuclear projects, the owner of Three Mile Island is investing $1.6 billion to revive the plant and has agreed to sell all of its output to Microsoft, which is seeking power for its data centers. 

Nuclear startup company Oklo, backed by OpenAI’s Sam Altman, is surging pre-market, up over 10% as investors get their first taste of what will likely be the primary source of power for AI in the decades to come. 

Nuclear names like Cameco are also popping on the news before the cash open Friday morning.

This momentum continues our “Next AI Trade” that we pointed out in April of this year, where we outlined various investment opportunities for powering up America, playing out.

The restart of Three Mile Island, specifically to sell energy to Microsoft to power its data centers, will be the most material advancement in the nuclear/AI thesis since we first outlined it.

Constellation Energy Corp. plans to restart the Three Mile Island reactor by 2028, according to a Friday statement. The reactor, closed in 2019 due to economic challenges, will reopen despite the site’s other unit being shut down nearly 50 years ago after a major nuclear accident, according to Bloomberg.

The Bloomberg report noted that Microsoft has committed to a 20-year energy purchase from a nuclear facility, its first dedicated 100% nuclear energy deal. Financial details were not disclosed.

Constellation Chief Executive Officer Joe Dominguez said: “Policymakers and the market have received a huge wake-up call. There’s no version of the future of this country that doesn’t rely on these nuclear assets.”

An Oklo SMR reactor prototype

Constellation began exploring a restart of the reactor in early 2023 and decided to move forward, attracting Microsoft’s interest, the report says.

Microsoft’s nuclear energy purchase supports its goal to power its global data centers with clean energy by 2025, focusing on regions like Chicago, Virginia, Pennsylvania, and Ohio. The company’s shift to AI is increasing demand for cloud computing, challenging its goal of becoming carbon negative by 2030. Microsoft spent over $50 billion on data-center expansion last fiscal year and expects to surpass that this year.

Recall just days ago it was reported that the two industry giants are prepping the launch of a $30 billion AI investment fund that’ll see Microsoft build data centers and energy projects to meet the demands of AI, according to the Financial Times.

BlackRock’s new infrastructure investment unit, Global Infrastructure Partners, is launching a major investment fund with Microsoft and Abu Dhabi’s MGX as general partners. Nvidia will provide advisory on factory design and integration.

The FT wrote that the partnership aims to tackle the massive power and infrastructure needs of AI development, which is expected to strain current energy systems. AI’s computing demands far exceed past technologies.

The partnership seeks to raise up to $30bn in equity, with plans to leverage an additional $70bn in debt.In a statement, Larry Fink said: “Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multitrillion-dollar long-term investment opportunity.”

Brad Smith, Microsoft’s president, added: “The country and the world are going to need more capital investment to accelerate the development of the AI infrastructure needed. This kind of effort is an important step.”

Jensen Huang of Nvidia added: “Accelerated computing and generative AI are driving a growing need for AI infrastructure for the next industrial revolution.”

So Microsoft is on board…Larry Fink is on board…Jensen Huang is on board…and we’re guessing nuclear names haven’t even left the starting gate yet…