With soaring demand for AI and reliable energy generation, nuclear power is taking center stage. Tech giants are looking at nuclear power to fuel energy-hungry data centers to train and operate AI models used in today’s generative AI applications.

Highlighting this trend, a Bank of America report projects that nuclear power is emerging as a $10 trillion opportunity that could help tackle global energy shortages, as quoted on Yahoo Finance. Strong demand, government support and a more positive public outlook have driven share gains in the nuclear supply chain this year.

Per a Goldman Sachs report from earlier this year, nuclear energy supply is set to rise sharply in the coming years after decades of stagnation, driven by growing power demand, the shift to cleaner energy and the need for reliable, round-the-clock electricity, as quoted on the Yahoo Finance article.

As per the director of the U.S. Energy Dominance Council, Jarrod Agen, as quoted in a Reuters article in early September, the Trump administration favors nuclear power over wind and solar and is willing to offer greater support through loan guarantees and tax incentives.

Nuclear Energy Steps In to Power the AI Era

Data centers are energy-intensive, with AI applications consuming much more energy than traditional computing. As a result, most tech giants are shifting toward renewable energy to meet their growing energy needs and are increasingly exploring nuclear energy as a power source.

President Trump has repeatedly emphasized his ambition to make the United States the global leader in AI. With the global AI market projected to surpass $1 trillion by 2031, the field is emerging as an increasingly attractive investment opportunity, driving up demand for nuclear power.

With AI taking center stage and tech giants increasing their investments in the United States, companies are entering into deals for data centers to meet their energy needs.

Per estimates, according to the Bank of America report, as quoted in the abovementioned Yahoo Finance article, nuclear capacity will need to be tripled by 2050 to support global electrification driven by data centers, with investments of more than $3 trillion projected over the next 25 years.

SMRs Redefining Nuclear’s Next Era

As global economies push for a transition to cleaner energy sources, the demand for nuclear reactors is growing. However, high costs and project management have always been areas of concern affecting large nuclear plants, often leading to budget overruns and delays.

Small modular reactors (SMRs) are emerging as a promising solution in addressing these challenges. This could help nuclear plants become smaller, simpler and easier to construct, speeding up the deployment of new plants to meet the rising clean energy demand.

Bank of America, as quoted on the Yahoo Finance article, suggests that meeting rising energy demand amid a renewed interest in nuclear may depend on SMRs, calling them “one of the most consequential energy technologies for the next 25 years.”

ETFs to Consider

As nuclear energy gains momentum, these funds offer a smart way to tap into the industry’s growth. The performance of the following funds over the past month highlights strong momentum and the bullish outlook of investors for nuclear-focused ETFs.

VanEck Uranium+Nuclear Energy ETF (NLR Quick QuoteNLR - Free Report) has gained 22.02% over the past three months and 58.34% over the past year.

Range Nuclear Renaissance Index ETF (NUKZ Quick QuoteNUKZ - Free Report) has gained 16.17% over the past three months and 78.76% over the past year.

Themes Uranium & Nuclear ETF (URAN Quick QuoteURAN - Free Report) has gained 15.8% over the past three months and 37.54% year to date.

Global X Uranium ETF (URA Quick QuoteURA - Free Report) has gained 27.07% over the past three months and 62.28% over the past year.

Sprott Junior Uranium Miners ETF (URNJ Quick QuoteURNJ - Free Report) has gained 34.10% over the past three months and 26.76% over the past year.