(Reuters) - Sam Altman-backed nuclear startup Oklo Inc said on Wednesday it has signed a non-binding agreement to provide power to Las Vegas-based data center operator Switch (NYSE:SWCH).
Under the agreement, Oklo will develop nuclear reactors, called the Aurora powerhouse, with a total capacity of 12 gigawatts through 2044.
Each Aurora Powerhouse reactor has a maximum power level of 15 megawatts electric, according to the U.S. Nuclear Regulatory Commission.
WHY IT'S IMPORTANT
Nuclear energy, which is nearly carbon-free and considered more reliable than other sources of energy such as solar and wind, has emerged as a popular source of power amid a worldwide push towards net-zero carbon emissions.
Several U.S. utilities are signing deals with big tech companies such as Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) to power their data centers with electricity generated from nuclear plants.
MARKET REACTION
Shares of Oklo rose nearly 12% to $21.41 before the bell.
KEY QUOTES
"The timescale of this master agreement underscores Switch and Oklo's commitment to meeting artificial intelligence's growing electricity demands with clean, sustainable power," Oklo said.
CONTEXT
Switch operates multiple renewable energy powered data centers across the United States and counts companies such as NVIDIA (NASDAQ:NVDA), FedEx (NYSE:FDX), Alphabet (NASDAQ:GOOGL)'s Google and PayPal (NASDAQ:PYPL) among its clients.
Oklo, which went public in May through a merger with Altman's blank-check firm, is aiming to develop its first small modular nuclear reactor by 2027.