1 Surprising Way Oklo Could Benefit From the Looming SpaceX IPO
According to many reports, SpaceX plans on going public this summer. While there are certain methods to invest in SpaceX right now, an initial public offering (IPO) will make shares easily accessible to billions of people around the globe.
Most experts believe that SpaceX will target a valuation of around $1.75 trillion. That would allow the space stock to raise somewhere between $50 billion and $75 billion. These figures would make the SpaceX IPO one of the biggest market debuts in history.
Even though the exact details have yet to be released, the event is already drawing significant attention — attention that may soon spotlight an issue that nuclear reactor specialist Oklo (OKLO 7.41%) is looking to solve.
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One way the SpaceX IPO should help Oklo
SpaceX hasn’t yet filed its paperwork with regulators to confirm an IPO. Only then will we be able to dig into the numbers and vision with any clarity to determine how attractive the shares are at whatever valuation SpaceX opts for. But regardless of the details, one thing is clear: SpaceX has the ability to bring huge amounts of attention to novel endeavors like a human base on the Moon, orbital data centers, and even small modular reactors (SMRs) — the exact technology that Oklo specializes in.
How exactly will SpaceX build hype for SMRs? SpaceX CEO Elon Musk has been warning of energy shortages that could hinder the development of AI technologies. In short, AI relies on data centers to function. Data centers, however, are energy-intensive. More than $7 trillion is expected to be spent building out new data center infrastructure over the next few years. Huge amounts of new energy generation capacity will therefore need to come online quickly to support the buildout.
Image source: Getty Images.
Nuclear energy has a unique opportunity to meet the rising energy needs of the AI industry. Oklo’s entire business model is predicated on this opportunity, to the point that Sam Altman — the CEO of OpenAI, the company behind ChatGPT — was an early investor in the company and served as chairman for many years.
Oklo’s SMR designs are custom-designed to meet the needs of AI data centers. Oklo’s reactors are smaller, faster, and easier to construct than conventional nuclear power plants, all with similar low-carbon emission benefits. It’s no wonder, then, that a growing list of data center operators has signed early agreements to employ Oklo’s technology.
One of SpaceX’s most promising growth pathways is to launch AI data centers into space using its relatively affordable, reusable rockets. There are some physics constraints to doing so, but at least in theory the cold temperatures of space can help dramatically lower cooling costs — one of the biggest uses of energy involved in operating data centers.
It’s possible that SpaceX opts to power its orbital data centers using Oklo’s power plants. More likely, however, is that SpaceX’s efforts here highlight the AI industry’s desperate desire to bring new, reliable energy sources online quickly, to the point that deep-pocketed big tech firms are willing to invest speculatively in launching these data centers into space. Oklo’s SMR technology arguably has much more real-world validation and a clearer path to adoption.
So while SpaceX’s efforts may highlight the industry challenge and bring newfound attention to the issue, SMR stocks like Oklo may end up among the ultimate winners.
