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AI Reviving the Nuclear Renaissance

The buzz about AI is alive and well this week, with Apple giving Siri an AI upgrade and partnering with OpenAI, and global spending now projected to top $300 billion in 2027.

The rapid expansion of AI’s footprint has reopened the floodgates for renewables like solar, wind and hydropower. But it’s also propelled nuclear power into the spotlight as a viable, clean power source. And crucially, as one capable of providing the insatiable energy needed to power AI infrastructure. Right now, the U.S. nuclear fleet, which consists of 95 reactors, is set to play a pivotal role to meet rising power demands by 2030. In Texas alone, data mining centers have requested the equivalent of 41 nuclear power plants to fuel their operations.

There’s also a growing appetite from Silicon Valley heavyweights. Microsoft founder Bill Gates, Amazon chief Jeff Bezos, and a host of VC firms have invested in several nuclear startups to help power their data centers. OpenAI CEO Sam Altman called it a “desperate need for as much energy as we can manufacture.”

Investing in Nuclear Energy ETFs

When investors consider betting on AI, they typically think of semiconductors, cloud computing, and cybersecurity companies one would find in an ETF like the ROBO Global Artificial Intelligence ETF (THNQ).

But AI data centers have sparked strong demand for utilities – including those that operate nuclear power plants. And for those who believe in the nuclear narrative, a handful of ETFs provide avenues for exposure to nuclear and uranium mining.

The newest pureplay entrant is the Range Nuclear Renaissance Index ETF (NUKZ), which launched in January, and has more than doubled its assets to reach $10 million in just the past month – putting it among the top 10 strongest equity ETF inflows on a percentage basis.

Nuclear power’s appeal stems from its ability to provide compact, stable, weather-independent electricity via the process of fission. This is critical for powering AI data centers, driving up uranium prices as global demand outstrips supply.

Global Push for Nuclear Power

Nuclear energy fell out of favor for more than a decade following the Fukushima nuclear reactor accident in 2011. Many countries to dialed back nuclear initiatives and scaled down investments in uranium mining as a result. But Russia’s invasion of Ukraine has revitalized the issue of energy security and independence. This has prompted a shift towards alternatives to Russian oil and coal.

The push for nuclear is also enjoying bipartisan support in the U.S. The White House just announced new steps to bolster domestic nuclear industry. Public opinion is increasingly in favor of nuclear power. Nearly 60% of Americans support more nuclear power plants – the highest in a decade.

Two dozen countries pledged to triple their nuclear energy capacity by 2050 at the UN climate conference in Dubai last year. The International Atomic Energy Agency also hosted a nuclear summit in March. There, 34 nations agreed to collaborate towards fully realizing nuclear energy’s potential.

Skeptics still argue over environmental and safety hazards of a largescale shift to nuclear – remaining dubious about its ability to decarbonize the globe in a meaningful timeframe. But proponents say technological advancements, such as Small Modular Reactors (SMRs), are making nuclear energy safer and more cost-effective, promising a revitalized role in the global energy matrix.

Other Nuclear Energy ETFs

The $3.5 billion Global X Uranium ETF (URA) is the largest of its kind and has often been looked to as a bellwether for the uranium mining sector. URA tracks companies involved in uranium mining and the production of nuclear components. URA is up 13% with inflows north of $780 million. Top holdings include major uranium producer Cameco and NexGen Energy.

Another multi-cap ETF offering value plays on uranium mining, storage and technology is the VanEck Uranium and Nuclear ETF (NLR). Unlike most of its peers, the fund includes utilities and is typically less volatile than pureplay miners. NLR is up 17%, with just a smattering of inflows so far this year. It’s heavily focused on large caps, like Constellation Energy Group, PG&E and Public Service Enterprise Group.

The Sprott Uranium Miners ETF (URNM) takes a more focused approach on investing in both uranium producers and explorers. Its junior counterpart, the Sprott Junior Uranium Miners ETF (URNJ) offers exposure to 34 smaller mining and exploration companies, like Paladin Energy and Uranium Energy. Both have seen net inflows over the past month.

The Defiance Daily Target 2x Long Uranium ETF (URAX) offers a more extreme leveraged approach. The fund, which launched in late May, allows investors to make amplified bets to double down on uranium, albeit with higher volatility.

Bottom line: AI continues to drive global energy demand. This is spurring nuclear power to reemerge as a critical source of clean, reliable energy. We’ll continue to track the impact of AI and the shifting geopolitical landscape on the alternative energy and beyond.

VettaFi LLC (“VettaFi”) is the index provider for THNQ, for which it receives an index licensing fee. However, THNQ is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of THNQ.

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