Xenergy, a startup focusing on the development of small modular reactors (SMRs), identifies the growing energy requirements of the artificial intelligence industry as a significant business opportunity. This strategic move underscores the emerging role of AI as a new demand source. It’s also indicative of nuclear energy’s underdeveloped status as a green energy solution.

AI’s hunger for energy is squarely on the radar of Xenergy, a leading entity in the SMR sector. The company has already initiated conversations with several tech firms about supplying their power needs. Xenergy CEO Clay Sell perceives the round-the-clock requirements of data centers to be ideally suited for small reactors. As per Sell’sviews, the stability of SMRs becomes paramount when operating 24/7.

AI will also complement the economic electrification, like electric vehicles, in augmenting the power demand, which has otherwise been static for years, according to Sell. He does not forecast any negative impacts on the SMR sector due to political shifts in Washington, D.C. Sell, a former top Department of Energy (DOE) official during the George W. Bush administration, firmly believes cros-party support exists for nuclear tech.

Notably, Xenergy is supported by the DOE’s Advanced Reactor Demonstration Projects (ARDP). The ARDP was launched during the Trump presidency and received sizeable funding through the 2021 infrastructure law for the first time.

While AI energy demands offer potential opportunities, Xenergy is already progressing with projects associated with specific clients. The company is collaborating with Dow to set up four reactors at Dow’s Seadrift Operations in Texas by 2030, a plan that could receive up to $1.23 billion in DOE funding. Xenergy is also working with utility firm Energy Northwest, based in Washington State.

Despite the promising prospects, SMRs are not immune to financial and regulatory challenges. The introduction of new technology on a large scale can be difficult, particularly while grappling with rising supply chain expenses and capital costs. Such adversities are also affecting other industries. Setbacks were experienced when the proposed Idaho project of NuScale with Utah Associated Municipal Power Systems collapsed due to steep cost increases last year. Xenergy and Ares Management abandoned plans to take Xenergy public in a SPAC transaction.

Regardless, Sell remains confident about Xenergy’s future. While he doesn’t plan to revive SPAC plans, he is optimistic about an eventual IPO through a ‘classical’ approach.

Source: AI’s energy needs may boost a small modular reactor startup }}.