Oklo’s $20 Billion Nuclear Ambitions Face Regulatory and Market Scrutiny

Sky-High Valuation Amid Operational Hurdles

Oklo, a Silicon Valley-based nuclear technology company, has reportedly reached a stock market valuation exceeding $20 billion despite generating no revenues and lacking a license to operate reactors, according to financial reports. Sources indicate the firm’s shares have surged over 500% since January, fueled by retail investor enthusiasm for its goal of powering energy-intensive data centers driving the artificial intelligence boom.

Sky-High Valuation Amid Operational Hurdles
Political Ties and Federal Backing
Technological Promises and Past Failures
Market Optimism Meets Reality Checks
Broader Industry Implications

Political Ties and Federal Backing

The company’s rise has been bolstered by connections to Trump administration officials, analysts suggest. Former Energy Secretary Chris Wright, an ex-Oklo board member, oversaw departmental programs that selected the startup for fast-tracked small modular reactor (SMR) development and committed to providing scarce reactor fuel. Reports note that the Department of Energy is considering supplying Oklo with weapons-grade plutonium, a move criticized by Democratic Senator Ed Markey, who cited “appearance of impropriety.” Oklo co-founder Jacob DeWitte dismissed these concerns as “partisan bickering,” emphasizing that Wright recused himself from related decisions.

Technological Promises and Past Failures

Oklo’s plan to use liquid sodium-cooled reactors—a technology that failed in U.S. trials from the 1950s to 1970s—faces skepticism from experts. The report states that the U.S. Nuclear Regulatory Commission rejected Oklo’s 2022 application for a sodium-cooled reactor, with former chair Allison Macfarlane warning that liquid sodium is “highly corrosive, flammable, and explosive.” DeWitte, however, insists advancements mitigate these risks and lower costs by eliminating high-pressure requirements.

Market Optimism Meets Reality Checks

While Oklo has non-binding agreements with tech giants, the absence of firm power purchase agreements worries analysts. Short sellers have targeted the stock, betting that commercialization will take longer and cost more than projected. The company’s reliance on retail investors—who own a significant portion of shares—also raises concerns about volatility, with experts noting that such investors “may run a lot faster” if troubles arise.

Broader Industry Implications

Oklo’s valuation and high profile could impact the nuclear sector’s revival, observers say. If market sentiment sours, it might undermine investment in competing SMR developers like TerraPower and Aalo Atomics. Nonetheless, supporters argue the regulatory environment is now “far more conducive” to nuclear innovation, with venture capitalist Michael Thompson asserting that groundbreaking companies “were achieving the valuations they deserved.”

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China’s thermal power generation dropped 5.4% in September compared to the same period last year, according to recent statistics bureau data. The decline comes as hydropower output surged nearly 32% year-on-year, marking a significant shift in the country’s energy mix. Overall electricity generation still increased by 1.5% despite the reduction in fossil fuel-based power.

Shift in China’s Energy Mix as Hydropower Rebounds

China’s fossil fuel-based power generation reportedly declined by 5.4% in September compared to the same period last year, according to recent data from the National Bureau of Statistics. The decrease in thermal power output, which primarily comes from coal with some natural gas contribution, occurred alongside a substantial 31.9% increase in hydropower generation, sources indicate.