Amazon, Google And Microsoft Bet Big On Nuclear: AI’s Growing Energy Demands Fuel New Projects
Nuclear-themed ETFs are doing more than giving investors a clean label for an AI-driven trade. In a niche segment, the index rules themselves matter: some products lean toward miners with direct operating exposure, while others extend into exploration, development, royalty streams and ancillary businesses. That means the portfolio is often a mix of very different risk profiles, not a single bet on uranium prices.
For long-term investors, concentration is the first issue to examine. Uranium-related ETFs can be dominated by a relatively small set of names, which can magnify company-specific news, project delays, financing needs or regulatory setbacks. A fund may appear diversified across dozens of holdings, yet still be highly sensitive to the same underlying cycle in commodity pricing, permitting and reactor demand.
Fund structure also matters. If the objective is to use the theme as a portfolio sleeve rather than a core holding, investors should check how the index is rebalanced, whether smaller companies are included, and how much turnover the strategy creates. Those design choices can affect trading costs, tracking difference and the degree to which the ETF captures the intended part of the nuclear value chain.
The bigger allocation question is whether the theme fits as a satellite position. Nuclear can sit at the intersection of energy transition and industrial capacity, but the investment case is still exposed to policy, capital intensity and execution risk. For many portfolios, the practical role of a uranium ETF is not to replace broad energy exposure, but to express a narrower, higher-volatility view with clear position sizing discipline.
The Growing Need For Nuclear
Recently, Amazon Web Services (AWS), Amazon’s (NASDAQ:AMZN) subsidiary in cloud computing, announced that it had signed an agreement with Dominion Energy (NYSE:D)*, Virginia’s utility company, to explore the development of a small modular reactor (SMR) near Dominion’s existing North Anna nuclear power station. In mid-October, Amazon announced that it would be investing more than $500 million in nuclear power, across three projects from Virginia to Washington state. SMRs are advanced nuclear reactors with a power capacity of up to 300 Megawatts electric (MW(e)) per unit, about one-third of the generation capacity of traditional nuclear power reactors. SMRs can produce a large amount of low-carbon electricity and are becoming a source of energy for AI data centers. According to CNBC, Virginia is home to nearly half of all the U.S. data centers, with one area in northern Virginia dubbed Data Center Alley. An estimated 70% of the world’s internet traffic travels through Data Center Alley daily, with Dominion Energy serving roughly 3,500 megawatts from 452 data centers across its service territory in Virginia. About 70% is in Data Center Alley. Dominion Energy projects that power demand will increase by 85% over the next 15 years. AWS expects the new SMRs to bring at least 300 megawatts of power to the Virginia region. Amazon has also announced a new agreement with Energy Northwest, a consortium of public utilities, to support the development, licensing and construction of four SMRs in Washington state. While Energy Northwest will build, own and operate these reactors, the generated energy will feed directly into the grid, contributing to Amazonโs energy needs. Through this agreement, Amazon gains the right to purchase electricity from the first four SMR modules. Additionally, Energy Northwest has the option to construct up to eight more modules, which could supply power to Amazon and regional utilities, potentially serving both residential and commercial needs across the Northwest.Google And Microsoft Also Make Nuclear Power Deals
Amazon is not the only big tech firm exploring nuclear power as a source for powering their AI development, as Google (Alphabet Inc) (NASDAQ:GOOG)* recently announced a deal with Kairos Power, an advanced nuclear energy company focused on developing affordable, safe and flexible nuclear reactors using molten salt technology.The deal sees Google buying power from Kairos via small modular nuclear reactors the company will be building. The initial phase of work is intended to bring Kairos Power’s first SMR online quickly and safely by 2030, followed by additional reactor deployments through 2035. This deal, Google says, should enable up toย 500 MWย of new 24/7 carbon-free power to U.S. electricity grids. The company also argues that it may help more communities benefit from “clean and affordable nuclear power.”
Similarly, asย reportedย by Bloomberg,ย Microsoft Inc. MSFT-0.50%has brokered a deal with Constellation Energy Corp.CEG-3.13the biggestย U.S. operator of reactors, to reopen the Three Mile Island nuclear plant in Pennsylvania. Constellation Energy will investย $1.6 billionย to revive the plant, and Microsoft has agreed to exclusively purchase the energy generated from the plant for two decades.
Shares in nuclear energy companies surged to record highs in mid-October after Amazon and Googleโs announcements. The Financial Timesย reportsย that the share prices of U.S.-listed SMR developersย Oklo Inc OKLO-7.42rose by 99%, and shares in CamecCCJ-1.60%ย NuScale Power SMR-7.89%and BWX Technologies BWXT-0.79%ย * all traded at record highs that week.
The Value Proposition Of Nuclear
The growing demand for energy globally and the need to move away from fossil fuels could be setting the stage for nuclear power. For a national, state or local utility, the appeal of nuclear power starts with its reliability. Furthermore, according toย Original Postii/S2211339822000880" target="_blank" rel="nofollow noopener noreferrer">Science Direct, nuclear energy is the “safest and most renewable clean energy.”
The announcement of the various deals by big tech and nuclear energy providers has led companies involved in the industry to see an uptick in recent equity performance. Increasing energy demand due to AI development or general societal need is leading to nuclear energy increasingly becoming an energy source various stakeholders are looking to โ making nuclear energy an industry that could be worth considering for interested investors.
Investing In Critical Materials
As big tech firms find different avenues to power their data centers, there could be increased demand for the critical materials needed to generate, transmit and store cleaner energy. In the case of nuclear energy, uranium is an abundant source of concentrated energy for nuclear reactors. This presents a possible opportunity for investors, as having material exposure to uranium could enable them to benefit from any gradual price appreciation that may occur.
For investors seeking comprehensive exposure to companies involved in the uranium industry, theย Sprott Uranium Miners ETF URNM-0.61%ย ย andย Sprott Junior Uranium Miners ETF URNJ+1.82%ย ย are turnkey solutions that provide access to investable uranium companies. URNM provides investors with exposure to companies that devote at least 50% of their assets to the uranium mining industry, which may include mining, exploration, development and production of uranium, holding physical uranium, owning uranium royalties or engaging in other non-mining activities that support the uranium mining industry, by tracking the North Shore Global Uranium Mining Index.
Meanwhile, URNJ reflects the performance of mid-, small- and micro-cap companies in uranium mining-related businesses, providing investment results that generally correspond to the total return performance of the Nasdaq Sprott Junior Uranium Minersโข Index.
For investors seeking to capitalize on the growth potential of AI, investing in critical minerals โ such as uranium โ could be an opportune way to gain tangential exposure to the technology’s ongoing evolution.
Featured photo byย Lukรกลก Lehotskรฝย onย Unsplash.
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