Global nuclear explosion

• Alexis Bienvenu
  Manager
  La Financière de l'Échiquier (LFDE)

The world is hungry for energy, especially since artificial intelligence has been devouring gigawatt hours at a rapid pace, driving up the price of electricity across the Atlantic to unsustainable levels. Nuclear energy, however, can effectively satisfy the energy needs of servers: it is carbon-free, controllable, predictable and immune to the geopolitical vagaries of oil-producing countries. This is why global nuclear capacity is set to triple by 2050, driven by the commitment made by some 30 countries in 2023.

However, this renaissance faces significant challenges: construction timescales running into decades, sometimes burdened by unreasonable delays, colossal investments, and industrial, regulatory and reputational risks. Added to this are the shortage of skilled labour and the extreme sensitivity of public opinion. Once commissioned, the facilities still have to contend with the spectre of accidents, sometimes with long-lasting consequences, the threat of cyber hacking, the cost of decommissioning and the thorny issue, still unresolved at global level, of the final storage of radioactive waste.

In response, the industry is reorganising with the support of public authorities, opening up historic opportunities. In July 2024, before Trump’s return, the United States passed the ADVANCE (Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy) Act, facilitating the deployment of new-generation reactors and compact units, known as SMRs (Small Modular Reactors). The latter are easier to build for AI giants, who are desperately seeking readily available energy.

Europe has undergone a similar revolution: in 2022, nuclear power became part of the circle of “green” investments as defined by European taxonomy. This shift is illustrated by Berlin’s pragmatism: while refusing nuclear production on its soil, it has ceased to oppose it at the EU level in exchange for concessions on its natural gas consumption.

Asia is not to be outdone. In India, a 2025 law opens up nuclear power to private capital, including foreign capital, for the first time. China, on track to become the world leader in nuclear power production, has just passed a law to secure massive new investments in nuclear power, officially allowing it to aim for carbon neutrality by 2060 – conveniently to power its data centres. Initiatives in the same direction are emerging in South Korea and even Japan, where nuclear power revives painful memories of Fukushima.

The private sector is following suit. Microsoft has signed an agreement to reactivate a symbol: the Three Mile Island power plant, closed in 2019, the scene of a historic accident in 1979. Meta has also committed to a 20-year deal with a site at the end of its life, while Google, Oracle and OpenAI are betting on SMR-type projects.

This enthusiasm does not necessarily stifle renewable energies – except perhaps temporarily in the United States, but certainly not in China. Faster to install, cheaper and less risky, they offer clear advantages. But they remain difficult to manage. In the race for electrons, however, all solutions will be welcome.

Faced with these dizzying prospects, the market is jubilant. The index mentioned above shows a very high valuation: more than 50 times the expected earnings in 2026 according to Bloomberg (and 127 times current earnings!). Irrational exuberance? It all depends on the trajectory of AI. If the thirst for electricity is confirmed, nuclear power will emerge as the big winner in this mad race. Because on a race track, while not all competitors win, the one who provides the energy is guaranteed victory.