Inside JPMorgan Chase & Co.’s investment banking division, executives are sounding a note of caution on the rising optimism surrounding nuclear energy in the United States. “We’ve spent so much time on nuclear that I’ve become worried that maybe we’re over indexing on this problem,” Rama Variankaval, the bank’s global head of corporate advisory, said in an interview.
The nuclear sector has seen renewed attention amid surging electricity demand from AI data centers. Bloomberg Intelligence estimates a $350 billion spending boom in US nuclear power, potentially increasing output from reactors by 63% by mid-century. This expectation has fueled skyrocketing stock prices: shares of startup Oklo Inc. have surged more than 500% this year, while the MVIS Global Uranium & Nuclear Energy index is up over 70%, compared with a 14% rise in the S&P 500 Index.
Yet Variankaval cautioned that supply constraints could temper the sector’s growth. “The demand of new power is materializing in real time, but the supply of new nuclear may take time,” he said. High upfront costs, decade-long construction timelines, regulatory hurdles, and labor shortages remain key challenges. Even small modular reactors (SMRs), which are designed to be faster and cheaper to build, are “probably still a handful of years away from being a cost-competitive source of energy,” he added.
Bloomberg Intelligence forecasts that only 9 gigawatts of new nuclear capacity will be added in the next decade, with widespread deployment of SMRs unlikely before 2035. Analysts also highlight that meeting near-term energy needs, especially for AI, may rely more heavily on natural gas, solar, wind, batteries, and carbon capture solutions.
Karen Fang, global head of sustainable and infrastructure finance at Bank of America, noted that while nuclear has made “really promising progress,” it cannot yet meet AI-driven power demands over the next three to five years. Bloomberg Intelligence reports that fast-build assets, such as gas, will likely play a critical role in powering AI data centers, with 72% of respondents to a recent survey emphasizing gas’s importance.
As investor excitement surges, bank executives like Variankaval urge careful consideration of the costs, timelines, and technological uncertainties involved in nuclear energy. “Power prices are already going up in many parts of the country,” he said. “A continuation of this will test the policy support and the question of who pays for the incremental cost of new energy will need to be carefully addressed.”
