The Case for Uranium

ranium faces extreme price volatility, high regulation and political risk, significant environmental and safety concerns, and yet has had ‘glowing’ investment returns (pun intended). Plagued by fragile supply chains and high costs for mining operations, uranium has seen price and sentiment change.

The Fukushima Japan disaster in 2011 caused the price of uranium to plummet, taking over 10 years to recover. Political instability in key uranium-producing countries such as Kazakhstan, conversely, can cause the price of uranium to rocket.

With the advent of electric vehicles (EV) and the surge in data center and related energy demands, the demand for electricity in the future seems to be increasing exponentially.  3 times the energy demand for AI, with AI to consume 22% of all US households electricity by the year 2028. AI, and specifically large language models (LLMs), require significant computational resources. Training these models involves graphics processing units (GPUs) running continuously for months, leading to high electricity consumption. By 2030–2035, data centers could account for 20% of global electricity use.

The image below from a 2024 United States Data Center Energy Usage Report paints the picture well, illustrating the vast amount of power regained for 8 GPU AI processing.  This shows the total annual server energy use from 2014 to 2023 along with a future scenario range of server energy use through 2028. Server energy use more than tripled from 2014 to 2023. A large portion of this increase came from GPU-accelerated AI servers, which grew in energy usage from less than 2 TWh in 2017 to more than 40 TWh in 2023.

Source: 2024 United States Data Center Energy Usage Report

That said, I believe the most effective and efficient means of achieving this increasing energy demand will be through nuclear power, necessitating the need for uranium.  Coal, natural gas, solar, wind, and other renewables will all be needed to support the demand. However, over time and with climate change and environmental concerns mounting, I believe the public will realize that safe, clean, nuclear-based power is the best investment. And it is for these reasons, increased demand from data centers and EV, coupled with a growing concern for environmentally friendly solutions, will lead to a growth in the demand for uranium.