The Strategic Rise of SMRs in AI-Driven Energy Demand: A $50B Opportunity for X-energy and Partners

The global energy landscape is undergoing a seismic shift, driven by the insatiable power demands of artificial intelligence (AI) and digital infrastructure. As data centers and AI operations consume an estimated 2% of global electricity today, with projections to surpass 10% by 2030, the need for scalable, low-emission energy solutions has never been more urgent. Enter small modular reactors (SMRs): a technology poised to redefine energy security, decarbonization, and geopolitical influence. At the forefront of this revolution is X-energy, alongside strategic partners Korea Hydro & Nuclear Power (KHNP), Amazon, and Doosan Enerbility, which have forged a $50 billion collaboration to deploy Xe-100 SMRs across the U.S. and beyond. This partnership not only addresses a critical energy gap but also positions itself as a capital-efficient gateway into the next-generation energy transition.

The AI-Energy Nexus: A $50B Market Opportunity

AI-driven workloads are reshaping industries, from cloud computing to autonomous systems, but their energy footprint is staggering. A single large AI data center can consume as much power as 50,000 homes. Traditional energy sources—renewables, natural gas, and legacy nuclear—struggle to meet this demand with the reliability, scalability, and carbon neutrality required. SMRs, particularly X-energy's Xe-100, offer a compelling solution.

The Xe-100 is a fourth-generation, high-temperature gas-cooled reactor (HTGR) capable of generating 80 MWe per unit, with modular scalability to 960 MWe in multi-unit configurations. Its TRISO-X fuel, encapsulated in ceramic layers, ensures inherent safety and resistance to proliferation risks. Crucially, the Xe-100's thermal output can be repurposed for industrial applications, such as hydrogen production or desalination, diversifying its value proposition.

The X-energy-KHNP-Amazon-Doosan partnership aims to deploy over 64 Xe-100 units by 2039, delivering 5 GW of nuclear capacity to power AWS data centers and AI operations. This initiative aligns with Amazon's broader $5 GW nuclear commitment and is supported by a $1.2 billion U.S. Department of Energy (DOE) grant for the Texas-based Seadrift project. With Doosan Enerbility securing manufacturing capabilities and KHNP providing operational expertise, the collaboration leverages South Korea's nuclear leadership to accelerate deployment.

Geopolitical Leverage: U.S.-South Korea Synergy

The partnership is not merely a commercial venture but a strategic alliance with profound geopolitical implications. The U.S. and South Korea, bound by the recent $350 billion trade deal, are positioning themselves to counter China's dominance in nuclear technology and AI. South Korea, home to 26 nuclear reactors and a global leader in reactor exports, brings decades of operational expertise to the table. Doosan Enerbility, a key player in reactor vessel manufacturing, ensures the scalability of Xe-100 production.

This collaboration also aligns with the Trump administration's push for advanced nuclear technologies, emphasizing energy independence and AI competitiveness. By integrating SMRs into the U.S. grid, the partnership reduces reliance on imported energy and secures a leadership role in the global race for clean, high-density power.

Regulatory and Market Tailwinds

The U.S. Nuclear Regulatory Commission (NRC) has been instrumental in creating a favorable environment for SMRs. Recent rule changes, including scalable emergency planning zones and risk-informed licensing frameworks, have streamlined approvals for NuScale and other innovators. X-energy's Seadrift project, which received NRC construction permit acceptance in May 2025, exemplifies this progress.

Moreover, the Inflation Reduction Act's $369 billion clean energy incentives and the DOE's Advanced Reactor Demonstration Program provide critical financial backing. X-energy's $148 million tax credit for its TRISO-X fuel plant in Tennessee further underscores the government's commitment to domestic SMR supply chains.

Investment Thesis: Capital Efficiency and Long-Term Value

For investors, the X-energy-KHNP-Amazon-Doosan partnership represents a capital-efficient entry into a high-growth sector. X-energy's $700 million funding round, led by Amazon's Climate Pledge Fund, signals strong private-sector confidence. With Doosan and KHNP handling manufacturing and operations, X-energy can focus on R&D and deployment, minimizing upfront capital expenditures.

The partnership's $50 billion funding target—split between public and private sources—ensures a robust capital structure. For context, the global SMR market is projected to reach $100 billion by 2040, with the U.S. capturing a significant share. X-energy's first-mover advantage in TRISO-X fuel and modular design positions it to dominate this segment.

Risks and Mitigations

While the opportunity is substantial, risks remain. Regulatory delays, supply chain bottlenecks for HALEU fuel, and public perception of nuclear energy could hinder progress. However, the NRC's proactive approach, KHNP's operational track record, and the DOE's HALEU production agreements mitigate these challenges. Additionally, the Xe-100's inherent safety features and modular design reduce public resistance compared to traditional reactors.

Conclusion: A Strategic Bet on the Future

The X-energy-KHNP-Amazon-Doosan partnership is more than a technological breakthrough—it's a geopolitical and economic masterstroke. By aligning AI's energy demands with SMR innovation, the collaboration addresses a $50 billion market gap while reinforcing U.S. and South Korean leadership in clean energy and AI. For investors, this represents a rare confluence of regulatory support, strategic partnerships, and long-term growth potential.

As the world races to decarbonize and digitize, SMRs are emerging as the linchpin of the energy transition. X-energy and its partners are not just building reactors; they're constructing a blueprint for the future. For those seeking to capitalize on this shift, the time to act is now.