More than ever, tech giants are searching for clean, sustainable energy sources. One company looking to lead the way with its next-generation nuclear technology is Oklo (OKLO -11.46%). According to data provided by S&P Global Market Intelligence, the company surged 101% higher in 2024.
Investor enthusiasm around its technology and what it can do to meet tech companies’ growing energy needs has driven the stock higher. Here’s what investors need to know about the company and what you can expect going forward.
AI’s growing energy needs took center stage in 2024
Oklo is a nuclear technology company looking to build small modular reactors (SMR) that use “fast” neutrons to sustain a fission chain reaction. It seeks to harness these fast neutrons to tap into energy reserves remaining in used nuclear fuel from conventional nuclear power plants. Oklo believes there is enough energy in nuclear waste to meet the projected U.S. energy demand for the next 100 years.
SMRs have become a focus of many technology companies with large data centers and industrial companies because they promise to provide clean and reliable energy solutions to meet growing energy demand while helping companies meet their carbon reduction goals.
Oklo, which counts OpenAI co-founder Sam Altman among its investors, went public in May after merging with the special purpose acquisition company AltC Acquisition.
The company has hit the ground running. In November, it secured letters of intent from two major data center providers to deliver up to 750 megawatts (MW) of its power to data centers across the U.S. This move expanded its customer pipeline to 2,100 MW and showed strong demand for its clean energy solutions.
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It also signed an agreement with Switch, an AI, cloud, and enterprise data center provider, in December. In the nonbinding Master Power Agreement, Oklo will deploy 12 gigawatts of its Aurora powerhouse projects through 2044. It is “one of the largest corporate power agreements in history,” the company said in its press release.
What’s next for Oklo?
Investors must keep in mind that SMRs are years away from being operational, and recent projects have experienced significant cost escalation. For example, NuScale Power, another SMR developer, had numerous cost overruns on its Utah Associated Municipal Power System (UAMPS) project, and its 2015 agreement was terminated in late 2023 due to the complexities involved.
Looking forward, Oklo will submit its combined license application (COLA) to the U.S. Nuclear Regulatory Commission during the first half of this year. This will serve as a model for future applications, and the company plans to file additional COLAs for additional powerhouses in 2025 and 2026. The company is also moving forward with site work at Idaho National Laboratory, where it plans to deploy its first 15-MW reactor in late 2027.
That said, many experts don’t see SMRs being widely deployed until the 2030s. Oklo still has a long way to go before operating commercially and generating meaningful revenue, making the stock a risky one for investors today.
