Oklo's partnership with Nvidia sets the stage for a new class of direct power agreements between nuclear energy suppliers and the power-hungry artificial intelligence sector.
Nuclear energy developer Oklo Inc. saw its stock climb more than 6% after announcing a new partnership with Nvidia, a move that directly connects its advanced reactor technology to the high energy demands of artificial intelligence. The deal, announced Thursday, sent shares to $77.02 as investors considered the potential for small modular reactors (SMRs) to become a key power source for the data centers fueling AI expansion.
The collaboration aligns with recent market analysis, including a report from Bernstein highlighting the critical role SMRs could play in providing reliable, carbon-free power for the massive expansion of AI infrastructure. Data centers require dense, uninterrupted electricity that next-generation nuclear technology is positioned to supply.
Oklo is developing the 75-megawatt Aurora powerhouse and has four projects selected for the Department of Energy’s advanced reactor and fuel pilot programs. The company aims to achieve criticality—a sustained nuclear reaction—for its Aurora-INL and Groves isotope projects by a July 4, 2026 target. It is also planning a 150 MW initial phase for a 1.2 GW power campus for Meta Platforms, with operations targeted around 2030.
The Nvidia partnership provides a crucial commercial pathway for Oklo, which holds no debt and has approximately $2.5 billion in cash. While analysts at HSBC initiated coverage with a Buy rating and a $96 price target, others remain cautious. Price targets from analysts range from $14 to $168, showing significant uncertainty. The company guides to $400 million in annual capital expenditures for the next two years, which reflects the high upfront costs of developing its first-of-a-kind reactors.
Oklo is pioneering an owner-operator model for its next-generation SMRs, aiming to sell power directly to large customers like data center operators. This approach bypasses traditional utility structures and offers a dedicated, reliable power source. The energy demands of AI are a well-documented challenge for tech companies and grid operators, with data centers projected to consume a rapidly growing share of global electricity. The Bernstein report noted that SMRs are a potential solution to this challenge, offering year-round, dense power generation.
The company is using a new Department of Energy-led licensing process for its 75 MW Aurora powerhouses. Besides the planned 1.2 GW campus for Meta, Oklo is also expanding its partnership with Swedish nuclear technology firm Blykalla AB to advance fast reactor commercialization, a deal that could involve $100 million to $200 million in investment. Oklo expects to book its first revenue later this year from its Idaho Radiochemistry Laboratory. Despite having $2.5 billion in cash and no debt, the company is not expected to be profitable this year as it invests heavily in its development pipeline.
The wide range in analyst price targets reflects the dual nature of Oklo's investment profile. HSBC's $96 target is based on the company's accelerated timeline. In contrast, UBS lowered its target to $60, citing execution risk and cost concerns, while Craig-Hallum cut its target to $71 on capital needs concerns. For investors, the stock represents a high-risk, high-reward play on the convergence of AI and nuclear energy. The company's ability to meet its 2026 criticality target and manage its capital expenditures will be critical milestones.
This article is for informational purposes only and does not constitute investment advice.
