New U.S. nuclear power boom begins with old, still-unsolved problem: What to do with radioactive waste

The U.S. nuclear power sector is experiencing a renaissance, fueled by AI data center demand and manufacturing reshoring, with the Trump administration pushing for quadrupled output and an $80 billion deal with Westinghouse owners Cameco and Brookfield Asset Management potentially leading to a Westinghouse IPO. Despite significant investment and engagement from tech giants like Google and Microsoft, the industry faces the persistent, unresolved challenge of radioactive waste storage, with over 95,000 metric tons stockpiled and taxpayers incurring substantial costs due to the DOE's failure to establish a permanent disposal site. While firms like Deep Isolation and Oklo are developing solutions—with pre-revenue Oklo seeing a 429% YTD stock surge and a $16.5 billion valuation—analysts highlight high risks, long construction timelines, and the economic viability compared to other energy sources.

Analysis

The U.S. nuclear power sector is experiencing a renaissance, fueled by skyrocketing electricity demand from AI data centers and manufacturing reshoring. President Trump's executive orders aim to quadruple output in 25 years, complemented by an $80 billion deal with Westinghouse owners Cameco and Brookfield Asset Management, potentially leading to a Westinghouse IPO. This robust government and private sector commitment signals a significant expansion phase.

A critical unresolved issue remains radioactive waste storage, with over 95,000 metric tons stockpiled and taxpayers incurring $11.1 billion in costs since 1998 due to the lack of a permanent disposal site. While international peers like Finland are progressing, the U.S. faces substantial financial and environmental liabilities, despite the DOE's mandate to manage spent fuel.

Innovative solutions are emerging from companies like Deep Isolation Nuclear and Oklo, which is pursuing spent fuel reprocessing and Small Modular Reactors (SMRs). Oklo, a pre-revenue company that went public via SPAC, has seen its stock surge 429% YTD to a $16.5 billion valuation, driven by plans for a $1.68 billion reprocessing facility and an SMR in Idaho. This highlights significant investor interest but also considerable regulatory and operational risks.

Despite big tech involvement from Google, Microsoft, and Meta, skepticism remains due to historical project delays, cost overruns, and long construction timelines for new reactors and SMRs. Critics argue these timelines are too slow to meet immediate data center demands, and nuclear power's high cost compared to other energy sources adds to the speculative nature of this ambitious build-out.

Key Decisions for Investors

• Investors should evaluate established nuclear supply chain participants like Cameco (CCJ) and Brookfield Asset Management (BAM) for exposure to the $80 billion build-out, given their positive sentiment and direct involvement.
• Consider the high-risk, high-reward profile of pre-revenue innovators such as Oklo (OKLO), acknowledging its significant YTD stock appreciation and large market cap, but also its dependence on future regulatory approvals and operational milestones.
• Monitor regulatory developments, particularly regarding waste disposal solutions and SMR approvals, as these are critical de-risking factors for long-term project viability and financial performance.
• Assess the long-term viability of nuclear projects against alternative energy sources, factoring in historical cost overruns, extended construction timelines, and the evolving economics of renewables.