Nuclear energy startup Oklo has announced an ambitious plan to deploy 12 gigawatts of power over the next 20 years, a goal set as part of a framework agreement with data center operator Switch. The collaboration, revealed on Wednesday, is expected to mark a significant step toward integrating advanced nuclear technology with the rapidly growing energy demands of data centers across the United States.
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| Courtesy: Oklo Inc. |
Oklo’s plan involves the deployment of a fleet of small nuclear reactors by 2044, collectively generating enough electricity to meet the annual power consumption of over 9 million U.S. households. As part of this arrangement, Oklo will take on the responsibility of developing, constructing, and operating these reactors.
The company will then sell the generated electricity to Switch through a series of power purchase agreements aimed at supplying the energy needs of Switch’s expansive data center operations. While the broad framework agreement has been finalized, specific power purchase agreements are yet to be signed.
Despite the potential of this agreement, Oklo’s stock reflected a decline of nearly 4% in Wednesday’s trading session. However, the company remains focused on the long-term impact of the partnership. According to Oklo CEO Jacob DeWitte, the nonbinding framework agreement is designed to establish high-level objectives for large-scale, multi-site power development and deployment. DeWitte emphasized that the framework creates an essential pathway for advancing nuclear energy solutions on a transformative scale.
Oklo is a startup spearheaded by OpenAI CEO Sam Altman, who serves as the company’s chairman. Altman’s backing has positioned Oklo as a prominent player in the microreactor sector. Earlier this year, Oklo made its debut on the public market in May through a merger with Altman’s special purpose acquisition company (SPAC), AltC Acquisition Corp., and currently boasts a market capitalization of $2.33 billion.
Switch, a privately held company headquartered in Las Vegas, is renowned for designing, building, and operating state-of-the-art data center campuses across the U.S. Rob Roy, Switch’s CEO, expressed his enthusiasm for the partnership, highlighting the company’s commitment to deploying advanced nuclear power “at a transformative scale” for its data center operations.
Oklo’s microreactors represent a significant innovation in the nuclear energy sector. Unlike traditional nuclear reactors in the U.S., which typically have a capacity of around 1,000 megawatts, Oklo’s reactors are designed to range in capacity from 15 megawatts to over 100 megawatts. The reactors planned for Switch’s operations will primarily be 50-megawatt units. To achieve the 12-gigawatt target by 2044, Oklo will need to construct approximately 240 reactors of this size.
A major selling point of Oklo’s microreactors is their potential to significantly lower the costs associated with constructing nuclear power plants while also reducing construction timelines. These smaller, modular designs aim to provide more flexible and scalable power solutions for customers, making nuclear energy more accessible and efficient.
While Oklo has yet to deploy any reactors, the company is aiming to launch its first operational plant at the Idaho National Laboratory in Idaho Falls by 2027. This milestone is expected to serve as a proof of concept for the broader rollout of its microreactor technology.
In a related development, sources informed Reuters in September that Switch is contemplating an initial public offering (IPO) that could value the company at $40 billion. Switch was previously taken private by DigitalBridge and IFM Investors in December 2022 for $11 billion.
The partnership between Oklo and Switch comes at a time when demand for nuclear power is surging in the U.S. As technology companies and data center developers increasingly prioritize carbon-free electricity to power artificial intelligence and other energy-intensive operations, nuclear energy is gaining attention as a reliable and sustainable solution.
Notably, tech giants like Amazon and Alphabet announced investments in small nuclear reactor technology in October, while Microsoft has entered into a power purchase agreement to assist in bringing the Three Mile Island nuclear power plant back online.
This growing interest underscores the vital role nuclear power is poised to play in addressing the energy demands of a digital and AI-driven future, making the Oklo-Switch partnership a potentially groundbreaking initiative in the clean energy landscape.