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Oklo, a nuclear energy startup chaired by Open AI's Sam Altman, has secured a serious enterprise energy supply deal because the industry rushes to fulfill the growing need for artificial intelligence.
The 20-year contract with Switch Inc, a big private data center operator, calls for the development of reactors with a complete capability of as much as 12 gigawatts – enough to power all 7.6 million homes in New York state.
Oklo claimed the agreement was amongst the biggest clean energy contracts in history, regardless that it was non-binding and the corporate's technology had only been in production for years.
Oklo co-founder and CEO Jacob DeWitte told the Financial Times that the deal might be price billions of dollars if binding terms are reached.
The deal is the newest announced between nuclear developers and the technology industry as the factitious intelligence boom creates an urgent need for low-carbon, high-power energy sources.
Oklo is developing small modular reactors – recent varieties of advanced nuclear power plants with an output of 300 megawatts or less, which is a couple of third of ordinary plants.
Big Tech is increasingly betting that small reactors can provide enough energy to power AI systems, regardless that no Western company has yet successfully deployed the technology.
DeWitte said nuclear power is the one energy source that may sustainably meet the large energy needs of the AI revolution. He downplayed critics' concerns in regards to the risks related to nuclear power, which is heavily regulated and subject to delays and price overruns.
“We are entering a brand new world due to the dimensions of the energy demand,” DeWitte said in an interview. “That’s impossible with renewables since you would want quite a lot of gas backup capability and quite a lot of people need a clean solution.”
Oklo goals to have its first 15 MW reactor operational by the top of 2027 on the Idaho National Laboratory. Rival US nuclear developers X-energy and Kairos Power recently signed power deals with Amazon and Google to power their data centers with low-carbon power.
Microsoft also reached an energy agreement with Constellation Energy in September that may reactivate the Three Mile Island nuclear power plant in Pennsylvania.
Adam Stein, director of nuclear energy innovation on the Breakthrough Institute, a Washington think tank, said Big Tech's contracts with nuclear developers would give investors confidence to support a nascent industry.
“They are intentionally taking over a few of that technology risk, the first-mover risk, of their power purchase agreements,” he said. “This is how recent technologies come onto the market.”
But some analysts are skeptical that the brand new generation of nuclear startups will ever succeed.
“These agreements don’t appear to represent the sort of significant, substantial and sustained financial commitments – on the order of many billions of dollars over a long time – that will be needed to completely realize these speculative nuclear projects,” said Edwin Lyman, nuclear power security director for the Union of Concerned Scientists.
Although nuclear energy production doesn’t emit carbon dioxide, some critics deny that it’s a clean energy source, citing the radioactive waste it produces, which have to be stored indefinitely.
Switch operates several large data centers in Nevada, Texas and Atlanta that use renewable electricity. To meet the utmost contract terms, Oklo would should construct a whole bunch of its small reactors across the U.S. to power Switch's facilities.
Oklo, whose early investors include tech entrepreneurs Altman and Peter Thiel, listed in New York in March and has a market capitalization of $2.2 billion.
Chris Wright, Donald Trump's nominee for US Secretary of Energy, is a director of the corporate. DeWitte said Wright will resign from the board if he’s confirmed by the U.S. Senate.
