Amazon's Nuclear Deal Boosts Competitor NuScale Power

The AI industry is rapidly growing, but it faces significant challenges in scaling its compute power. Two major constraints are access to capital and energy resources. As a result, major AI companies like Amazon are taking steps to ensure they have enough energy long term.

Amazon recently announced a 20-year deal with Constellation for access to nuclear power. The agreement will direct $3 billion in investment to expand one of Constellation's existing nuclear facilities. This move makes sense for Amazon, as investing directly in nuclear power is cost-effective and helps minimize price increases due to rising energy needs.

The partnership between Amazon and Constellation has a positive impact on another nuclear stock: NuScale Power. NuScale aims to build small modular nuclear reactors for utility companies, but its strategy differs from Oklo Inc., which sells directly to AI companies. The fact that Amazon is willing to work with traditional grid operators to scale regional power production is good news for NuScale's go-to-market strategy.