Data Center REIT Equinix Inks Deal To Buy Nuclear Power From Sam Altman-Backed Firm
Colocation data center giant Equinix has signed an agreement to purchase hundreds of megawatts of nuclear power from Oklo, a California-based company seeking to manufacture small modular reactors that is backed by OpenAI founder Sam Altman.
Equinix, the world’s largest data center REIT, has already made a $25M prepayment on an agreement to purchase between 100 MW and 500 MW of energy from Oklo’s planned generation facilities to power its U.S. data centers, Data Center Dynamics reports. It is the first small modular reactor deal signed by a colocation data center company.
SMRs, like those being developed by Oklo, have been eyed for years as a more sustainable way to power the booming supply of data centers. Closer in size and scale to the reactors powering the Navy’s submarines and aircraft carriers than to the massive generating stations typically used by utilities, their small size means they require a fraction of the footprint needed for traditional nuclear plants.
Oklo says its SMRs can generate as much as 15 MW and can operate for more than 10 years before needing to be refueled.
Oklo is in the process of merging with special-purpose acquisition company AltC Acquisition Corp., an entity established by OpenAI's Altman specifically to take the company public. The deal gives Oklo an $850M valuation and provides it with $500M in capital to develop a reactor needed to produce nuclear fuel. The merger is expected to be completed in July, although hype around the anticipated closure has driven up the SPAC’s share price by nearly 60% over the past month.
The agreement with Equinix was revealed last week in a disclosure filed by AltC with the Securities and Exchange Commission showing that Equinix had signed a letter of intent in February to purchase power from the SMR firm. Where these planned Oklo reactors would be located remains unspecified, along with the location of the data centers they would potentially power.
Proponents of the technology say SMR plants can be built more cheaply, more quickly and in more places than their traditional counterparts, with none of the risk of large-scale environmental catastrophe often associated with nuclear energy. But keeping the cost of these reactors low enough to be commercially viable has proven tricky, and previous efforts to power data centers with SMRs have run into problems.
U.S. nuclear regulators approved the first small modular reactor for commercial use in early 2023. NuScale, a manufacturer of SMRs, announced last October that developer Standard Power would use dozens of its SMRs to power hyperscale data center campuses in Pennsylvania and Ohio.
But within weeks those plans were facing widespread skepticism.
NuScale’s share price plummeted after short seller Iceberg Research announced it was taking a short position on the company, publishing evidence that its progress toward deploying a commercial SMR was largely smoke and mirrors and that Standard Power was a “fake customer” with “zero chance” of executing the project. Days later, NuScale’s only other U.S. project was canceled when utilities balked at the escalating price of its reactors.
While NuScale has strenuously objected to these characterizations of its deal with Standard Power, these blows to the company’s credibility forced leaders across the nuclear and data center sectors to temper their expectations about not only NuScale but also the viability of commercial SMRs in general.
CORRECTION, APRIL 10, 2 P.M. ET: A previous version of this story incorrectly described the Equinix-Oklo agreement based on SEC filings from Oklo, but Equinix has since issued a statement clarifying the nature of the deal. This story has been updated.
CORRECTION, APRIL 10, 2 P.M. ET: A previous version of this story incorrectly characterized the status of NuScale's partnership with Standard Power and the number of projects planned with NuScale reactors. This story has been updated.
