European data centers explore small modular reactors (SMRs) from NuScale Power and Oklo to meet surging electricity demand and decarbonization goals.

Small modular reactors (SMRs) are essentially miniature nuclear power plants. They can be built faster than larger conventional nuclear facilities and while typically more expensive on a per-megawatt basis, their upfront capital investment is much lower than traditional nuclear plants.

The SMR concept has existed for decades, yet only two systems have ever been commercialized worldwide—one in Russia, the other in China—both relatively small in generating capacity. A new era is emerging, however. The AI industry's urgent need for power to scale data center infrastructure is reshaping the sector's economics. Nuclear provides large amounts of stable baseload power with minimal refueling needs, and while SMRs carry higher per-megawatt costs, their speed of construction is increasingly attractive.

The European Investment Bank, the EU's lending arm, has recognized SMRs' potential. On September 4, it announced a €40 million loan to Steady Energy, a Finnish SMR developer. According to Reuters, "The loan is the first in a pipeline of SMR investments the EIB has planned." Though NuScale Power and Oklo Inc. weren't directly involved, the announcement carries important implications for shareholders.

Historical reluctance to commercialize SMRs stemmed largely from weak demand. Energy demand growth had long been stable and predictable, allowing utilities to prioritize cost reduction over speed. That calculus has shifted dramatically: AI companies now plan to spend billions on near-term energy infrastructure, and over 80 SMR projects are currently in development globally.

Yet many remain in conceptual or financing stages, with few firm financial commitments. Previous SMR deal collapses driven by rising costs have made the industry cautious. The solution is straightforward: deploy working SMR systems to demonstrate both execution capability and economic viability.

This is why increased government support matters critically for NuScale and Oklo long-term. Direct funding boosts the odds of successful commercialization across multiple projects, generating proof points that can unlock customer pipelines. Commercialization success could require years or even a decade, but sustained capital and government interest should gradually convert SMR developers' project pipelines into revenue-generating commitments.