After the AI chip shortage, is an energy crisis coming?

A recently overlooked issue in the tech world: AI is going to consume the global power grid.

According to S&P Global Market Intelligence data, the electricity demand for AI will increase tenfold by 2030. The International Energy Agency has been very straightforward — the electricity consumption of data centers has doubled and is a foregone conclusion. In other words, the world is currently rolling out chips, and the next step will be to roll out electricity.

Why does AI consume so much electricity?

Large model training and inference require high-density computing. The power consumption of a data center is equivalent to that of a medium-sized city. Imagine hundreds of such data centers spread across the globe in the future; the traditional energy system simply cannot handle it.

Even if chips become more efficient and cooling systems become more advanced, they can only delay the problem and cannot change the trend - the world needs more energy to feed AI.

Opportunities for Small Nuclear Reactors

Here comes a company called Oklo. They are doing something that sounds very hardcore: designing small modular nuclear reactors to be installed right next to data centers.

Core advantages include:

• Ultra-long Battery Life: The flagship product Aurora is designed to operate continuously for 10 years without needing fuel, while traditional water-cooled reactors can only manage a 5-fold difference.
• Quick Deployment: Compared to the traditional nuclear power plants which often have a ten-year construction period, the assembly time for small reactors is greatly shortened.
• Compact and Efficient: A single reactor can reach a power output of 75 megawatts, sufficient to drive a medium-sized data center to operate continuously 24/7.
• Reliability: The inherent stability of nuclear power, unlike solar and wind energy which are intermittent.

Hype vs Reality

Oklo's stock price has risen over 300% this year, and the market enthusiasm is evident. But let's cool down: this company still has no commercial revenue and has not yet obtained a commercial license from regulatory authorities. Currently, it can only rely on cash reserves (last quarter $410 million) to keep playing.

Moreover, the stock market is highly volatile, and it's common to see declines of over 20% in a single day. If you don't have a strong heart, you should definitely stay away.

Is it worth the bet?

From a 5-year perspective, AI energy demand is a necessity, not a hype. Small modular reactors, as one of the solutions, indeed have strategic value. Although Oklo is still in the storytelling phase, the narrative is significant enough—it may shape the future energy landscape.

Key risks: regulatory approval, verification of technical reliability, and whether commercialization can meet expectations. These are all critical hurdles.

Bottom Line: Long-term bullish, short-term volatility. Suitable for investors who can withstand a 50% drawdown.