Is AI's ultimate destination nuclear power? Oracle plans to build three small nuclear reactors to support super data centers

A major news in the tech industry has emerged. In order to meet the increasing power demands of AI, Oracle is considering using next-generation nuclear energy technology to support the operation of its super data centers. Some analysts believe that "the end of AI may be nuclear power". This week, Larry Ellison, the chairman of Oracle, announced during the earnings conference call that the company is designing a data center that is expected to require over 1 gigawatt of power, which will be provided by three small nuclear reactors. He mentioned that these reactors have already obtained construction permits and locations have been identified. The future of these small modular nuclear reactors seems promising. With a power capacity not exceeding 300 megawatts, they are expected to deploy carbon-free energy more quickly. However, analysts predict that small modular reactors may not achieve commercialization in the United States until the 2030s. Coincidentally, Oklo, a nuclear energy startup supported by Sam Altman, went public in May and is expected to launch its first reactor before 2027. Oklo manufactures nuclear power plants using liquid metal reactor technology, with power ranging from 15 megawatts to 50 megawatts, and is considered a potential solution to "extreme energy demands brought by artificial intelligence". Although licensing and fuel supply remain bottlenecks, reports suggest that the company has been selected by the U.S. Department of Energy, receiving four cost-sharing awards to advance commercialization of advanced recycling technology. Oklo has also obtained site use permits from the Department of Energy and fuel rewards from the Idaho National Laboratory. Jacob DeWitte, co-founder and CEO of Oklo, stated: "We are trying to design and approach the entire project in the most reasonable way possible so that we can build as soon as possible." He also expressed excitement about the diversity of customers, indicating that their scale and business model clearly align with customer interests. Customers do not start using facilities with such high power consumption overnight, but typically build gradually, aiming for dynamic growth of n+1 or n+2. He added: "If you are building a 300-megawatt reactor, you actually can't do that, but what we are doing can, which adds a lot of value." According to Lazard's analysis, the cost of Oklo's "Aurora Power Station" reactor with a 15-megawatt version is approximately $70 million, with a levelized cost of electricity (LCOE) of 80-130 dollars per megawatt-hour, similar to peak gas-fired power plants and offshore wind power. It is worth noting that Ellison is already a well-known supporter of Tesla's new energy. Can we expect a collaboration between Oklo and Oracle?