Oklo Strikes Nuclear Power Deal for Data Centers

Nuclear startup Oklo has struck a significant deal with data center operator Switch to supply up to 12 gigawatts of power by 2044. If successful, Oklo’s small modular reactors (SMRs) could become a game-changer for powering energy-hungry data centers. However, the agreement comes with challenges, including regulatory hurdles and stiff competition.

The Deal

Oklo, backed by Sam Altman, aims to build and operate SMRs to provide clean, nuclear-generated electricity to Switch’s data centers. Switch serves some of the world’s largest companies, including:

• Google
• Nvidia
• Tesla
• PayPal
• JP Morgan Chase

Under the deal, Oklo would sell power to Switch, which would then distribute it to its customers. If realized, the agreement could mark a massive shift toward nuclear energy in the tech industry.

The Challenges

1. Regulatory Approval

• Oklo’s previous application to the Nuclear Regulatory Commission (NRC) was denied in 2022.
• The startup plans to resubmit in 2025, hoping that upcoming legislation will streamline the approval process.
• NRC approval timelines are lengthy; Oklo’s first reactors are optimistically planned to go online by 2027.

2. Execution at Scale

• Oklo must deliver dozens to hundreds of SMRs over the next two decades.
• Its initial reactors will produce 15 megawatts, scaling to 50-100 megawatts later.

3. Competition

• Other nuclear startups, like Kairos, have already secured NRC approval. Kairos is supplying electricity to Google’s data centers.
• Renewable energy projects are a major threat. Google recently announced a $20 billion renewable power deal with wind, solar, and grid-scale batteries, set to begin operation by 2026.
• Falling costs of renewables and energy storage make them attractive alternatives to nuclear power.

Sam Altman’s Role

Sam Altman, OpenAI CEO and Oklo’s board chair, has played a pivotal role in the company’s journey. He invested in Oklo’s seed round in 2015 and backed its recent reverse merger with AltC, his blank-check company. Though Oklo’s stock initially dipped post-merger, optimism around its potential to power data centers has driven recovery.

Why It Matters

Data centers are at the heart of AI growth, demanding massive amounts of energy. As AI accelerates, clean and reliable power sources will become increasingly critical:

• Nuclear energy offers a stable, carbon-free solution.
• If Oklo clears regulatory and production hurdles, its SMRs could establish nuclear power as a mainstream option for tech infrastructure.

However, the company must navigate regulatory bottlenecks, execute ambitious timelines, and compete against cheaper renewable energy solutions.

The Takeaway

Oklo’s partnership with Switch is a bold move to redefine energy for data centers. While its small modular reactors promise clean and scalable power, success hinges on regulatory approval and Oklo’s ability to deliver at scale. As renewables and competitors gain momentum, the race to power the future of AI is far from decided.

With Switch, Oklo takes a step toward nuclear-powered data centers. The question is: can it deliver?