Rafael Grossi, the head of the International Atomic Energy Agency, yesterday warned that nuclear energy has to be part of the energy shift away from fossil fuels. However, while the UN agency is increasing its forecasts for nuclear energy production, Grossi also said this was contingent on “a better investment playing field.”
With A+ timing, NuScale—one of the nuclear industry’s great hopes—yesterday admitted defeat in its flagship small modular reactor (SMR) installation, the Carbon Free Power Project, which it just spent a decade developing in Utah. The reasons? Rising costs ($59 per megawatt hour turned into $89 over the last couple years, according to Bloomberg) and utilities’ unwillingness to commit to buying the project’s output. Here’s NuScale CEO John Hopkins, delivering the kind of statement you never want to deliver: “Once you’re on a dead horse, you dismount quickly. That’s where we are here.”
NuScale’s share price fell by over 40% on the news. However, the company insisted that there was an upside to all this, with Hopkins saying the last 10 years’ work in Utah had “advanced NuScale technology to the stage of commercial deployment.”
Indeed, NuScale announced a month ago that it had won data center operator Standard Power as a customer, with plans to use its SMRs to power energy-intensive applications such as AI and crypto mining. However, short seller Iceberg Research subsequently issued a report claiming the contract had “zero chance of being executed” due to Standard Power’s alleged inability to finance the deal, and NuScale would run out of cash by the end of 2024. NuScale angrily defended its customer and its own “solid balance sheet.”
Now we get to see the fallout (pardon the pun) of the Utah cancellation for the wider nuclear industry. SMRs are supposed to revive the sector on the basis that they’re much cheaper and quicker to deploy than traditional nuclear power plants because they would largely be prefabricated in factories rather than being laboriously constructed on-site.
The tech sector is particularly keen on this development, chiefly due to the astronomical power requirements of AI—Microsoft is developing SMR plans, as is the Swedish data center operator Bahnhof. Rolls-Royce, NuScale’s most prominent rival, is aggressively targeting the data center industry, though as yet without concrete results.
The problem for the nuclear industry is that SMRs, while a good idea, remain unproven, and renewable energy—which is very much proven to work—keeps getting cheaper. With the climate emergency demanding immediate solutions, the window for SMRs to demonstrate their worth may not be a large one, and setbacks like this will not help the sector at all.
More news below. And by the way, Meta just started forcing its European users to choose between paying for Facebook and Instagram in data or money (€9.99/month). I haven’t chosen yet, and won’t be able to use Facebook or Insta until I do, but I asked Meta nemesis Max Schrems what he will do, and he said he sees it as “selling” one’s fundamental right to privacy. That will surely be the basis of the legal challenges to what Meta is attempting here. Let’s see who wins.
David Meyer
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NEWSWORTHY
SoftBank loss. It’s not been a good week for SoftBank and its founder Masayoshi Son. After the bankruptcy of WeWork a couple of days ago, the Financial Times reports SoftBank Group gave investors a nasty shock by posting a $6.2 billion second-quarter loss. That’s the conglomerate’s fourth quarterly loss in a row. Meanwhile, Arm—still 90% owned by SoftBank after its recent IPO—disappointed Wall Street with its current-quarter revenue forecast, sending its share price south by nearly 10% at one point.
Actors' strike over. The SAG-AFTRA actors’ strike has ended after seven months, with the union and studios having reached a tentative deal. Details aren’t available just yet, but SAG-AFTRA claimed in a statement that it had won “unprecedented provisions for consent and compensation that will protect members from the threat of AI,” along with a new “streaming participation bonus.”
Apple tax bill. Remember when the European Commission decided Apple needed to pay $15 billion in Irish back taxes, and the EU’s General Court annulled the decision four years later because the Commission didn’t prove Apple’s cozy Irish tax arrangement gave the company a particular advantage? Now, as RTE reports, the main advisor to the EU’s top court has recommended scrapping the General Court’s decision because of “a series of errors in law.” That means Apple may still be on the hook for that eye-bleeding tax bill, but we probably won’t learn the outcome for a few years yet.
ON OUR FEED
“I don’t know of an industry that will be more impacted than any aspect of media, entertainment, and creation…In the good old days, you might need 500 artists and years to make a world-class animated movie. I don’t think it will take 10% of that three years from now.”
—DreamWorks cofounder Jeffrey Katzenbergsays at a Bloomberg conference that AI will soon transform the animation industry
IN CASE YOU MISSED IT
Bob Iger told investors why ESPN needs a ‘soft landing’ as Disney shifts it from cable to streaming, by Rachyl Jones
AI was not even in the top 20 business risks in a ‘shocking’ survey of nearly 3,000 corporate leaders, by Rachyl Jones
Crypto charity CEO quits after sexist LinkedIn posts are surfaced: ‘Let’s be honest—you look fat’, by Orianna Rosa Royle
Meta updates AI deepfake policy for political ads, 2 months after Google did it, by the Associated Press
AI and ethics: Business leaders know it’s important, but concerns linger, by John Kell
BEFORE YOU GO
Australian connectivity disaster. Nearly half of Australia’s population yesterday found itself without internet or phone connectivity, due to a major outage at the provider Optus. Reuters reports the blackout lasted 12 hours, hitting over 10 million people.
Optus pinned the outage on a “technical network issue” (y'think?) It apparently wasn’t a cyber attack, but whatever the cause, it resulted in utter chaos across Australia, with even emergency service calls being impossible.
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