Emerging Technology Will Power the Nuclear Renaissance
Emerging technology is going to gobble up so much electricity. Nuclear can power this high electricity demand.
Image Courtesy: Britannica
In the myriad of business articles floating on mainstream business news, one article came and went but should have garnered way more attention, especially if you are an investor. The article from the Wall Street Journal is titled “Microsoft Targets Nuclear to Power AI Operations”. Basically the first paragraph of the article gives the whole gist away.
“Microsoft is betting nuclear power can help sate its massive electricity needs as it ventures further into artificial intelligence and supercomputing.”
Microsoft is one of the leading companies investing in R&D related to AI, cloud computing, Big Data, and other emerging technologies. But emerging technology means more consumption of power and electricity.
The chart above shows how much demand for electricity will be in the future due to the high usage of data centers in the DC/Northern Virginia. Fun fact, the DC/NoVA area has the most number of data centers in the world. Just the DC area alone demand is predicted to go up by 5 GW by 2027. Power needs for data centers are predicted to go up to 35 GW by 2030.
The widespread use of emerging technology means the usage of electricity is going to skyrocket. Energy demand will only go up. Enter nuclear.
Already, Constellation Energy (nation’s largest owner of nuclear plants) agreed to sell nuclear power to Microsoft for a data center in Virginia. Constellations itself admits that AI going to increase the demand for data centers.
As we learned during 2022 energy is not cheap. As I previously wrote, the sanctions on Russia and not having access to cheap Russian energy have plunged Europe’s economy down to recession. Same can be said about the US, where malinvestment into energy and dependence on energy imports have made energy very expensive. Countries also have to look into pollution and NetZero Carbon goals.
Uranium is the cleanest energy source and emits the least CO2. But that’s not all.
Courtesy: Sprott Asset Management
As you can see above, nuclear is a very efficient energy source. One Uranium pallet can provide the equal amount of energy to 1 ton of coal, which is the main source of energy used to generate electricity. Finally, nuclear uses the least amount of land (courtesy: Sprott).
Last but not least is energy security. For the EU, China, and even Japan the ability to service their massive economies while achieving energy independence makes nuclear the best option. China already leads the world in nuclear reactors (93 total) and is building nuclear reactors at the fastest pace possible. Japan has already lifted its ban on the country’s largest nuclear reactor.
All in all, for major economies to service their large economies, growing middle class, be carbon neutral, and now be on the cutting edge of technological innovation, their only option is nuclear energy. The need for electricity globally will only grow (especially in emerging economies), and the best option to power this electricity demand is nuclear (source: Sprott)
Finally, US based Uranium miners and explorers are going to benefit immensely thanks to President Biden’s Inflation Reduction Act. The US Department is already looking to source its own Uranium for nuclear energy. Currently, Russia and Kazhakastan accounts for 50% of global Uranium mining and refining. One bright spot for the US is Uranium Energy Corp. (currently my largest holding). UEC already acquired Uranium One’s US Uranium assets. With tax breaks and other special support given to US green energy efforts, UEC is set to benefit immensely. Already during the past 5 years the stock has risen by 500%.
As they say, the people who made the most money during the California gold rush were the people selling the shovels to the gold diggers. During the 4th Industrial boom, consider nuclear to be shovel. Uranium miners and refiners are the ones selling the “shovels”. Uranium is a great way to play the emerging technology boom.
What I write here is not investment advice. Please do your own research. Stocks like UEC and other junior miners are very volatile. I love writing and creating content. ALL MY RESEARCH IS FREE but if you can support me by subscribing to my services either monthly or annually, I would greatly appreciate it. I wouldn’t be writing if it weren’t for my readers, so THANK YOU!!!!!