AI can push uranium and utilities upwards
Raw materials
Posted by MoneyController on 25.10.2024
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Among commodities, uranium could take advantage of the growing need for energy by the US tech industry. Here's why.
On ‘MarketWatch’, Michael Brush writes about how uranium has seen its price rise over the past 5/6 years in a very big way. However, the situation could continue to prove promising for the mineral: some of the largest US tech companies seem increasingly willing to rely on nuclear power to meet their energy needs. Driving consumption are data centres and the technology that has been most talked about in the past two years, namely artificial intelligence.
A striking case in point is Microsoft, which entered into a contract with the Crane Clean Energy Center to restart a nuclear reactor in Pennsylvania. David Arcaro of Morgan Stanley wrote that Microsoft would be willing to pay 100 per cent more than the market price for energy, so high is its demand ($100 per MWh instead of $50). But other major companies are also considering nuclear energy to meet their consumption: this is the case with Amazon, Google and Oracle.
Artificial intelligence and the large amount of data produce the need to consume more and more energy. But why does nuclear power seem to be the solution in the US? Brush lists at least three reasons for this: 1) the reshoring of supply chains, including energy, also (as Sprott Asset Management CEO John Ciampaglia points out) in areas such as chip production, electric vehicles and renewable technologies; 2) strategic aspects of a geopolitical nature (just think of the tensions of Western countries with Russia and China); 3) climate change and decarbonisation objectives, which mean that nuclear energy can be considered as a credible alternative to more polluting energy.
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