By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel is largely bearish on Oklo and NuScale, citing significant regulatory hurdles, financing risks, and unproven unit economics. While there's debate on whether data-center customers could fund Oklo's projects via PPAs, the panel agrees that both companies face substantial challenges in the next 2-5 years.
Risk: Regulatory delays and financing challenges
Opportunity: Potential for data-center customers to fund Oklo's projects via PPAs
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Oklo and NuScale are designing small nuclear reactors.
Oklo wants to sell electricity from its own nuclear reactors,
NuScale wants to sell reactor technology through its partner ENTRA1.
Throughout history, the best businesses have succeeded by lowering their costs of production and making their products more affordable to the masses. Think: Ford Motor Company and the Model T, Walmart and everyday low prices, McDonalds, Amazon, and Netflix. Each of these blue chip giants became profitable by cutting operating costs and lowering prices, incentivizing folks to pick them over pricier competitors.
In every industry, this logic holds -- even in nuclear energy, where we're currently on the cusp of what could be a great resurgence. Nuclear energy companies like Oklo (NYSE: OKLO) and NuScale Power (NYSE: SMR) are advancing new technologies that can make reactors smaller, factory-fabricated, less expensive to build, safer, and more affordable than the average nuclear power plant. The power they generate is cleaner than fossil fuels, and their small modular design appeals to big businesses that need to generate their own power -- namely, data centers and utilities companies.
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Oklo and NuScale are both expected to drive huge growth in the nuclear sector in the coming decades, taking part in a market opportunity that Bank of America (NYSE: BAC) has valued at $10 trillion. Between the two, however, one seems like a better long-term buy.
Oklo's business model might be more suitable for data center operators. In a nutshell, it wants to sell reliable, round-the-clock power from its reactors through power purchase agreements. It does not want to sell physical, concrete reactors; it wants to deploy them to customers and earn revenue on the electricity generated.
That model seems well-fitted for data centers and other industrial companies because, frankly, they don't want to be power plant owners either. They want clean, dependable power, but they would rather leave licensing and operating complexity to a utilities expert.
NuScale's model is similar to Oklo's but a little more complex. Unlike Oklo, NuScale doesn't want to become an independent power producer (IPP); rather, it wants to sell its small modular reactor (SMR) technology. In this regard, it has partnered with ENTRA1, an independent energy company, to sell its technology globally. In other words, NuScale provides the reactor smarts, while ENTRA1 finds the clients.
Both companies offer clients on-site power generation through small nuclear reactors. Yet, of the two, Oklo is the only one handling everything in-house. That direct model could be more appealing than NuScale's multiparty approach because it offers a simple pitch: Let Oklo handle the reactors, and let the client purchase the power.
There might be a speed advantage to this, as well. Tech companies are trying to build data centers at a rapid clip, and Oklo's model could one day match this speed better than NuScale's tripartite system. It could be why, to this day, Oklo has major partnerships with data center clients, like Equinix, Switch, and Meta Platforms, whereas NuScale hasn't inked a major deal with one yet.
The risk, of course, is that Oklo still needs to prove this pitch is economically feasible. Unlike NuScale, Oklo doesn't have NRC approval for its reactor designs. And while NuScale's model is slightly less straightforward, the company can lean on partners to help shoulder the nitty-gritty of nuclear projects.
NuScale's partnership with ENTRA1 has already produced one potentially big project: The 6 gigawatt (GW) SMR plant for the Tennessee Valley Authority (TVA) using NuScale's technology. If this project goes through, it would result in the largest SMR deployment in the U.S.
Both these stocks have potential to explode in value as artificial intelligence (AI) and its data centers demand more power. Between the two, however, I see Oklo emerging as a data center's go-to for on-site power generation, with NuScale more than likely partnering with utilities.
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Bank of America is an advertising partner of Motley Fool Money. Steven Porrello has positions in NuScale Power and Oklo. The Motley Fool has positions in and recommends Amazon, Equinix, Meta Platforms, Netflix, and Walmart. The Motley Fool recommends NuScale Power and recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Oklo's lack of NRC-approved reactor design renders its data-center partnerships non-actionable for at least several years."
The article positions Oklo as the cleaner data-center play via its IPP model and existing ties to Equinix, Switch, and Meta, yet it underplays the absence of NRC design approval for Oklo's Aurora reactor. NuScale already holds the only U.S. SMR design certification and has a 6 GW TVA project in motion through ENTRA1. Both firms remain pre-revenue with multi-year regulatory and construction timelines ahead; any delay in licensing or cost overruns would erase the touted $10 T market narrative. Oklo's speed advantage therefore rests on unproven execution rather than demonstrated capability.
NuScale's certified design and TVA anchor could still win on regulatory certainty, while Oklo's direct IPP approach may trigger heavier NRC scrutiny and slower deployment than the article assumes.
"Both companies are pre-revenue technology bets masquerading as near-term growth stories; the article conflates partnership announcements with de-risked business models."
The article frames this as Oklo vs. NuScale, but both are pre-revenue or near-zero-revenue companies betting on speculative demand. Oklo's direct-to-customer model sounds elegant until you ask: who finances $500M+ reactor builds for data centers? Oklo has partnerships but zero operational plants. NuScale's TVA deal is real but perpetually delayed—it was supposed to be operational years ago. The $10T BAA market claim is marketing math, not addressable revenue. Neither company has proven unit economics. The article's historical analogy (Ford, Walmart) is misleading: those companies achieved scale *after* proving profitability at small scale. These are pre-scale bets on regulatory approval, customer willingness to pay, and construction execution—three massive unknowns.
If either company successfully deploys even 2-3 operational plants by 2027-28 with positive cash flow, the stock could re-rate 5-10x on proof of concept; the article underweights how capital-starved data centers are for clean baseload power.
"The market is drastically underestimating the regulatory and capital-intensive operational hurdles that will likely dilute equity holders long before these SMR designs reach commercial profitability."
The market is conflating 'AI power demand' with 'near-term investability' in SMRs. While Oklo (OKLO) and NuScale (SMR) offer compelling long-term narratives, investors are ignoring the massive capital expenditure (CapEx) and regulatory hurdles inherent in nuclear infrastructure. Oklo’s 'power-as-a-service' model is attractive but requires them to become a utility-scale operator, a capital-intensive pivot from a pure-play tech design firm. Meanwhile, NuScale’s reliance on third-party partners like ENTRA1 introduces execution risk and margin compression. Both stocks are currently trading more on speculative fervor than on proven unit economics or finalized Nuclear Regulatory Commission (NRC) certifications. Until these companies demonstrate a clear path to positive free cash flow, they remain high-beta gambles.
If these firms successfully achieve standardized, factory-fabricated modular deployment, they could achieve economies of scale that render traditional, multi-billion dollar bespoke nuclear plants obsolete, triggering a massive valuation re-rating.
"Near-term stock upside depends on regulatory approvals and large, long-term offtake deals; without those, Oklo and NuScale face a prolonged, capital-intensive path to profitability."
Oklo vs NuScale is a long-horizon, high-uncertainty thesis. The article glosses regulatory hurdles and financing risk, noting Oklo lacks NRC approval while NuScale leans on ENTRA1 and a TVA project. The data-center power angle requires both customers to accept novel, capital-intensive energy-supply arrangements and for SMRs to achieve cost parity with large baseload plants or renewables, which is far from assured. The 6 GW TVA scenario, if delayed or canceled, would be a material setback. The Bank of America $10 trillion figure is macro hype, not a near-term driver. In essence, risk-reward skew remains skewed to the downside in the next 2–5 years.
If regulators sign off faster than expected and a major customer signs a long-term PPA at favorable economics, the upside could be much larger than risked here. In that scenario, Oklo or NuScale could achieve rapid scale that defies today’s skepticism.
"Direct customer funding of Oklo's smaller reactors via PPAs could shrink the financing risk everyone flagged."
ChatGPT's downside skew for the next 2-5 years overlooks how data-center hyperscalers could directly fund Oklo's smaller Aurora units via PPAs that cover most CapEx, unlike NuScale's larger modules. This direct IPP path might compress timelines if Meta or Equinix equity stakes materialize, a linkage between customer desperation and execution risk the panel has not quantified. The 6 GW TVA precedent could then spill over faster than assumed.
"Oklo's PPA advantage evaporates if NRC certification slips or hyperscalers demand proven operational track record before committing billions."
Grok's PPA-funded CapEx model for Oklo is compelling but assumes hyperscalers will accept novel counterparty risk and regulatory delays as acceptable trade-offs for on-site power. Data centers historically lock in long-term contracts with proven operators; Oklo has zero operational units. The 'customer desperation' framing also assumes grid constraints tighten faster than SMR deployment—a timing bet, not a certainty. We need specifics: which customer signs first, at what price per MWh, and what happens if NRC delays Aurora certification by 18 months?
"Hyperscaler-funded PPAs cannot overcome the fundamental unit-cost disadvantage of SMRs without proven, high-volume factory manufacturing."
Grok, your focus on hyperscaler-funded CapEx ignores the 'Nth-of-a-kind' cost trap. Even if Meta funds the first Aurora unit, the economics only work if Oklo achieves factory-scale manufacturing. Without a multi-unit order book, the per-unit cost for an SMR remains prohibitively high compared to existing grid-tied renewables or natural gas. You are banking on hyperscalers subsidizing R&D under the guise of a PPA, which is a massive, unpriced risk that will likely lead to significant equity dilution.
"Financing via hyperscaler PPAs alone cannot overcome the cost and factory-scale challenges; true profitability requires multi-unit orders and scalable manufacturing, which remain unproven."
Calling hyperscaler PPAs a near-term catalyst risks underestimating unit economics and factory-scale risk. Grok points to on-site CapEx subsidies, but Oklo still faces a learning-curve cost trap: without multi-unit orders and factory fabrication, per-unit costs stay elevated versus renewables or gas. The NRC/Aurora delay risk remains unpriced, and even 2-3 units by 2027-28 hinges on a funding rail that may never materialize. In short: financing alone doesn’t resolve the cost and manufacturing gaps.
The panel is largely bearish on Oklo and NuScale, citing significant regulatory hurdles, financing risks, and unproven unit economics. While there's debate on whether data-center customers could fund Oklo's projects via PPAs, the panel agrees that both companies face substantial challenges in the next 2-5 years.
Potential for data-center customers to fund Oklo's projects via PPAs
Regulatory delays and financing challenges