AI Is Not The 'Hidden Bubble' In The Market - Energy Probably Is

Forget the valuation bubble in tech - the real AI-fueled speculative frenzy may be unfolding in the energy sector, at a speed few could have imagined. A group of energy startups with zero revenue has seen their combined market value soar to over $45 billion, supported only by investors’ faith that tech giants will one day pay for power from facilities that haven’t even been built yet.

The most striking example of this mania is Oklo, a nuclear startup backed by OpenAI CEO Sam Altman. According to S&P Global Market Intelligence, Oklo’s stock has surged roughly eightfold so far this year, giving it a market capitalization of about $26 billion, making it the largest U.S.-listed company with no revenue in the past 12 months.

Another zero-revenue company, Fermi, has been equally red-hot. Upon its IPO earlier this month, Fermi debuted with a valuation of nearly $19 billion and still commands over $17 billion today. According to data compiled by University of Florida finance professor Jay Ritter, only two zero-revenue firms in U.S. history have ever gone public with higher inflation-adjusted valuations.

This speculative wave highlights the market’s extraordinary optimism about AI’s future energy demand. Yet, unlike the cash-rich tech giants driving the AI revolution, these energy startups have no margin for error. If the AI boom cools, the companies with no real revenues could face the steepest falls.

Betting on Nuclear: The Hottest Energy Trade in the AI Era

As AI’s power needs surge, investors are turning their gaze toward nuclear energy, especially small modular reactors (SMRs) capable of providing steady, large-scale power.

Oklo is the star of this trend, but its lofty valuation rests on a string of future possibilities. The company is developing SMRs that use liquid sodium as a coolant, yet it still lacks operational approval from the U.S. Nuclear Regulatory Commission and has not signed any binding contracts with electricity buyers. Wall Street analysts don’t expect Oklo to generate meaningful revenue until 2028.

The frenzy doesn’t stop there. Other firms working on even smaller micro-modular reactors have also captured sky-high valuations. Nano Nuclear Energy, which went public last year, has doubled in value this year to more than $2 billion. Meanwhile, Terra Innovatum, which just listed via SPAC last week, now boasts a $1 billion market cap. The common thread: no revenue, but plenty of investor hype.

The Valuation Fever Spreads: From Gas to Hydrogen

The AI-driven energy speculation extends well beyond nuclear. Fermi, led by former U.S. Energy Secretary Rick Perry and investor Toby Neugebauer, plans to build 11 gigawatts (GW) of generation capacity for data centers — roughly equivalent to the entire power capacity of New Mexico.

Although Fermi’s portfolio includes natural gas, nuclear, solar, and battery storage, it has so far secured only enough natural gas assets to meet about 5% of that target — and, like Oklo, has no binding customer contracts. Remarkably, Fermi’s $17 billion valuation is nearly on par with Talen Energy, a company that already operates around 11 GW of generation assets.

Other companies with modest revenues but no profits are also caught up in the frenzy. NuScale Power, an SMR company, has seen its stock surge 155% this year, though its income comes mainly from engineering and licensing fees for a Romanian project. Similarly, Plug Power, the long-struggling hydrogen fuel cell maker, has soared 90% this year on AI hype alone, reaching a market value of $4.8 billion. According to FactSet, analysts don’t expect either company to turn a profit before 2030.

History Repeats Itself: The Risk Beneath the Hype

One reason investors are piling into these speculative startups may be that profitable energy companies already look expensive. Shares of Bloom Energy have surged more than 400% this year, trading at a forward P/E of 133x, while Centrus Energy trades at 99x forward earnings. For investors chasing high returns, those valuations make the unproven startups seem almost appealing by comparison.

The flood of speculative capital could, in theory, help bring costly or untested technologies to maturity. But history offers a sobering precedent: the EV bubble of 2020. Companies like Nikola, Fisker, and Lordstown Motors went public amid similar euphoria—only to collapse once reality caught up.

For investors today, the risks are obvious. If the AI boom proves to be a bubble, or if its energy demand grows more slowly than expected, these startups—whose valuations rest entirely on future promises—will be hit hardest. With no revenue cushion, they could be the first to fall when the music stops.