"Wall Street Warns of Nuclear Tech Bubble"

" Wall Street Warns of Nuclear Tech Bubble \r\nBillions of dollars are flowing into cutting-edge nuclear technologies, from nuclear fusion experiments to small modular reactors and microreactors that backers say will catalyze a global nuclear power renaissance. But after years of buzz and successful funding rounds, these Wall Street darlings have yet to send any of their promised carbon-free energy to the grid.\r\n\r\nIn 2024, investments in advanced nuclear companies from both private equity and venture capital hit an\u00a0 all time high . According to S&P Global, last year's investments \u201csurpassed the total deal value of the past 15 years combined.\u201d The push for next-gen nuclear energy has accelerated on the back of growing energy demand projections driven by the proliferation of AI integration.\r\n\r\n\u201cThe single biggest driver in the paradigm shift we're seeing right now in the power sector comes down to data centers,\u201d Jackson Morris, director of state power sector policy at the Natural Resources Defense Council, was recently\u00a0 quoted \u00a0by Marketplace. \u201cLoad growth for electricity that we had already forecasted is now coming 10 years sooner and five times as fast because of data centers and these facilities largely being built by the big hyper scalers like Amazon, Google, Microsoft, etc.\u201d\r\n\r\nIn addition to the AI boost, nuclear energy startups have benefitted enormously from the political upheaval currently ensnaring renewable energy technologies. For now, nuclear power remains one of very few carbon-free energy sources with broad bipartisan support, both in the United States and abroad. In the past few months, nuclear holdouts in Europe have started to\u00a0 loosen nuclear restrictions \u00a0and publicly adopt a more pro-nuclear stance, and the United States and the United Kingdom\u00a0 unveiled a new nuclear partnership . An, just this week, United States Energy Secretary Chris Wright \u201ccast a renewed vote of confidence in cutting-edge nuclear power technology this week\u201d according to reporting from Semafor.\r\n\r\nHowever, this confidence is being undercut by some Wall Street analysts, who smell a bubble in the making. Semafor\u00a0 reports \u00a0that \u201cin general, the hysteria around power demand is pushing the valuations of many newly public energy startups beyond what they will realistically be able to deliver.\u201d Dimple Gosai, head of U.S. clean tech equity research at Bank of America, told the news outlet that \u201cthe disconnect between fundamentals and valuation is too wide to ignore.\u201d\r\n\r\nOklo, a small modular reactor (SMR) startup backed by AI bigwig Sam Altman, may prove to be such a cautionary tale. While the company\u2019s share values have fared well since its 2024 IPO, the Bank of America downgraded its rating from \u201cbuy\u201d to \u201cneutral\u201d just this week. It also downgraded NuScale, another SMR startup, NuScale, from \u201cneutral\u201d to \u201cunderperform.\u201d\r\n\r\nAxios Pro has also begun to report on investors looking to make a\u00a0 hasty exit from the market via SPAC mergers . SPACs, sometimes referred to as \u201cblank check companies\u201d are shell companies with no existing assets or operations at the time that they go public, making them an ideal \u201cescape hatch\u201d for investors getting cold feet about next-gen nuclear startup companies who want to offload the risk elsewhere. \u201cThis is the epitome of dumping on retail investors,\" a venture funder told Axios Pro.\r\n\r\nThis isn\u2019t to say that next-gen nuclear is a lost cause. It still has enormous potential, and will likely be a critical component of the clean energy transition in coming years \u2013 but not this year. The sector must first overcome significant bottlenecks \u201cincluding limited supply chains for nuclear fuel and containment vessels, and the familiar red tape for construction permitting and grid interconnection.\u201d But while investors may have gotten ahead of themselves in terms of near-term bullishness, the policy environment is encouraging for those with a longer-term outlook. Dozens of countries have\u00a0 pledged to triple nuclear capacity \u00a0by 2050, and startup-backed SMRs and microreactors are sure to be a significant part of that global push."

"Wall Street Warns of Nuclear Tech Bubble"

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