The AI data center build-out just hit a rough patch.
According to a new Gallup poll, 71% of Americans oppose any construction of AI data centers in their area, with 48% strongly opposed. Meanwhile, just 7% strongly supported such construction. That's an incredibly lopsided result.
The reasons for the opposition were varied, but the most common concerns were data centers' excessive water and electricity use, their environmental impact, and their potential to raise utility bills. But in order for companies' AI investments to pay off, the infrastructure needs to be built without getting mired in years of litigation or red tape. Is there any way to make AI data centers palatable?
Surprisingly, nuclear energy company Oklo (OKLO 1.69%) might have an unexpected solution to this problem. Here's how the scrappy start-up's ambitious business plan could make everyone a winner (including its shareholders).
Image source: Getty Images.
Power to vote
The strong bipartisan opposition to AI data centers is disrupting the AI build-out in communities across the country.
Local opposition has blocked or delayed at least $64 billion in U.S. data center construction projects since 2024, and that number is expected to increase as more projects come before local zoning boards and other decision makers who answer to voters. In the town of Warrenton, Virginia, for example, angry residents voted out every town council member who supported construction of a local Amazon data center. The new council then voted unanimously to approve a zoning change that permanently banned all data centers in the entire town.
Similar stories have recently played out in Oregon, Utah, New Jersey, and Massachusetts. This month, Maine became the first state to pass a statewide ban on AI data center construction. So, how could a lone nuclear power start-up stem the tide?
Image source: Getty Images.
Power to spare
Oklo is a pre-commercial company that's currently building its first prototype power plant with a small modular reactor (SMR) at the Idaho National Laboratory. When completed, this "Aurora powerhouse" will provide up to 75 MW of nuclear power -- much less than a full-size nuclear power plant but enough to power about 50,000 residences.
Because AI data centers and nuclear power plants both require massive, electricity-hungry cooling systems, Oklo has partnered with manufacturer Vertiv (VRT +0.49%) to develop a cooling system for facilities that house an Oklo SMR and an AI data center. The same system would cool both the reactor and the data center, with the reactor providing all the electricity needed.
Not only would such a combined SMR/data center be more energy-efficient, it could also be located far from existing electric grids (and municipalities' pesky zoning regulations). Or it could send its excess power back to a local grid, easing potential energy shortages. Oklo plans to debut this combined cooling system technology at its first Aurora powerhouse, scheduled to go online late next year.
NYSE: OKLO
Key Data Points
Power to succeed
Oklo and Vertiv haven't publicly released details about what a co-located SMR data center would look like, or how large or powerful it would be. And until Oklo starts bringing its Aurora powerhouses online, we won't know if it's a viable plan, let alone one that could scale nationally.
That said, Gallup's poll showed that nuclear power plant construction polls 18 percentage points better than AI data center construction. It also found that carbon-neutral nuclear energy was the least politically divisive form of energy generation. So even if it takes years to bring Oklo nuclear-powered AI data centers to market, it might still be worth the wait for companies that are currently seeing their data centers mired in expensive litigation or canceled altogether by zoning law changes.
Keep in mind, though, that Oklo's business plan and technology are both highly speculative, making its stock a very risky buy at the moment, with plenty of volatility and potential for things to go wrong. Only the most risk-tolerant investors should even consider buying Oklo's stock now. But if Oklo can create an appetite for its nuclear-powered data centers, its stock could be a massive long-term winner.
