NuScale Power: Pioneering SMRs to Power the AI Cloud Revolution

The rapid growth of artificial intelligence (AI) and cloud computing has thrust data centers into the spotlight as energy-hungry powerhouses. With global data center energy consumption projected to triple by 2028, tech giants like Microsoft, Alphabet, and Meta are racing to secure reliable, carbon-free energy solutions. Enter NuScale Power (NYSE: SMR), a leader in small modular reactor (SMR) technology, positioned to capitalize on this demand while addressing regulatory and sustainability challenges head-on.

A Regulatory Milestone: NuScale's SMR Certification

At the core of NuScale's value proposition is its NRC-certified SMR design, a first-of-its-kind achievement in the U.S. The company's 77-MW SMR modules, approved in May 2025, offer scalable, passive-safety nuclear power that can be configured in arrays of up to 12 units. This design retains the NRC's stamp of approval for safety while boosting output from the original 50-MW modules, enhancing commercial viability.

The regulatory win is critical: SMRs are now cleared for use in U.S. projects, with global applications following through partnerships like ENTRA1 Energy, NuScale's joint venture for turnkey SMR deployment. This milestone lowers barriers for utilities and tech firms seeking low-carbon energy without the massive upfront costs of traditional nuclear plants.

Tech Giants' Appetite for SMRs: Microsoft, Alphabet, and Meta

The $80 billion AI data center boom is driving partnerships between NuScale and tech leaders:
- Microsoft: While no formal SMR purchase agreement exists yet, Microsoft's hiring of nuclear experts and its Advanced Clean Electricity initiative (teaming with Nucor and Google) signal intent. Nucor's $15M investment in NuScale and plans to collocate SMRs at steel mills create synergies for Microsoft's data centers.
- Alphabet: Google's commitment to net-zero by 2030 includes backing SMR developers like Kairos Power, but NuScale's NRC certification and scalability could make it a future partner.
- Meta: Targeting 4 GW of new nuclear power by 2030, Meta's needs align with SMRs' reliability and modular flexibility.

These partnerships are strategic: SMRs offer the 24/7 baseload power critical for data centers, outperforming intermittent renewables. Microsoft's job postings for nuclear program managers and its Clean Energy Credits (CECs) procurement from Ontario Power Generation (OPG) further hint at a SMR-focused roadmap.

The Demand Driver: AI's Insatiable Energy Appetite

AI workloads are 10x more energy-intensive than traditional computing, with data centers projected to consume 12% of U.S. electricity by 2028. NuScale's SMRs address this directly:
- Cost Efficiency: SMRs cost ~50% less than conventional reactors, with a 462-MW plant (e.g., Romania's RoPower project) generating scalable, carbon-free power.
- Speed to Market: SMRs can be built in 3–4 years versus 10+ for traditional plants, ideal for tech firms needing rapid infrastructure.

Valuation Concerns vs. Long-Term Catalysts

Critics point to NuScale's $30/share peak in late 2024 and its valuation relative to revenue (2024 revenue: $34.2M). Yet, this is a seed-stage company in a $500B global nuclear market. Key growth catalysts include:
1. Commercial Agreements: NuScale aims for 10+ firm deals by late 2024, with RoPower and Ohio State University's training center as proof points.
2. Supply Chain Advancement: Partnerships with Doosan and Fluor are de-risking manufacturing.
3. Policy Tailwinds: The Inflation Reduction Act's $6B for advanced nuclear and global net-zero mandates are accelerants.

Investment Thesis: Hold to Buy with a Catalyst Watch

Hold: Near-term risks include delays in securing major tech contracts and competition from rivals like Kairos Power (Hermes reactor operational by 2027).
Buy: On dips below $25/share, with a target of $35–$40 by 2026 if NuScale secures a flagship tech partnership or secures DOE funding.

Conclusion

NuScale's SMRs are uniquely positioned to serve the AI cloud's energy needs, backed by NRC certification and tech giants' sustainability goals. While valuation and execution risks exist, the company's first-mover advantage and partnerships with industry leaders make it a long-term buy for investors willing to ride out near-term volatility. The AI revolution isn't just about algorithms—it's about powering them, and NuScale is building the reactors of the future.

Final Note: Monitor for NuScale's progress with Microsoft's data center pilots and RoPower's Romanian project milestones in 2025–2026.