What Happened
Oklo Inc., a startup focused on developing compact nuclear reactors, has made significant strides toward securing a contract with the U.S. Air Force for a microreactor project at Eielson Air Force Base in Alaska. On June 11, 2025, the U.S. Department of Defense’s energy logistics agency issued a Notice of Intent to Award a power purchase agreement for a pilot reactor, marking a critical step in the project. This agreement would allow Oklo to design, construct, own, and operate a microreactor that is expected to produce up to 75 megawatts of electricity and usable heat, which is considerably smaller than traditional nuclear reactors that average around 1,000 megawatts.
This development follows a previous attempt by Oklo to secure a contract with the military, which was initially agreed upon in 2023 but later withdrawn. The renewed interest in Oklo’s technology aligns with broader U.S. government initiatives aimed at enhancing energy security and promoting the use of small modular reactors, particularly in remote locations where energy reliability is crucial.
Key Details
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Contract Specifications: The contract with the U.S. Air Force is intended to support a microreactor pilot program, aimed at improving energy resilience for national security. The exact value of the contract has not been disclosed.
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Technology Overview: Oklo’s Aurora microreactor design utilizes fast reactor technology, which allows for continuous energy production without the need for connection to the commercial electricity grid. This feature is particularly advantageous for military installations that require reliable power sources.
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Regulatory Challenges: Oklo faced a setback in 2022 when the U.S. Nuclear Regulatory Commission (NRC) denied its application for an operating license. The company plans to reapply for this license in late 2025, with hopes of obtaining it by 2027. Recent directives from former President Trump aimed at expediting nuclear licensing processes may influence this timeline.
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Market Reaction: Following the announcement of the Air Force contract, Oklo’s stock (OKLO) experienced a notable increase of 10%. Since going public in May 2024, the stock has seen a substantial rise of 465%, although the company reported a net loss of $0.74 per share for the entirety of 2024.
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Analyst Ratings: Currently, Oklo holds a consensus rating of “Moderate Buy” among analysts, with seven buy recommendations and three holds. The average price target for the stock is $57.17, suggesting a potential upside from its current trading levels.
Multiple Perspectives
The announcement has elicited varied responses from stakeholders. Proponents of nuclear energy, including Oklo’s CEO Jacob DeWitte, argue that this project represents a significant advancement in clean energy technology and national security. DeWitte emphasized the company’s commitment to delivering secure energy solutions for critical infrastructure.
Conversely, some experts express concerns regarding nuclear proliferation, particularly due to Oklo’s use of plutonium in its reactor design. Critics argue that even though Oklo claims the plutonium will be encapsulated in highly radioactive substances to prevent misuse, the potential risks associated with nuclear materials remain a point of contention.
Additionally, the previous withdrawal of the contract by the military raises questions about the reliability of future agreements. Some analysts caution that while the current contract is a positive development, it does not guarantee financial stability for Oklo, especially given its history of losses and regulatory hurdles.
Context & Background
The push for small modular reactors (SMRs) has gained momentum in recent years as part of a broader strategy to enhance energy security and reduce dependence on traditional energy sources. The U.S. military’s interest in microreactors is driven by the need for reliable power in remote locations, particularly in strategic areas like Alaska, where energy supply can be vulnerable to disruptions.
Legislative and executive actions, including the 2019 National Defense Authorization Act and various executive orders, have laid the groundwork for advancing nuclear technology within the military. These initiatives reflect a growing recognition of the importance of energy resilience in national defense strategies.
Oklo’s microreactor project is positioned within this context of innovation and energy security, aiming to pioneer the deployment of commercial nuclear technology for military applications. The potential success of this project could influence future energy policies and the role of nuclear power in the U.S. energy landscape.
What We Don’t Know Yet
Several uncertainties remain regarding Oklo’s future and the microreactor project. Key questions include:
- Regulatory Approval: Will Oklo successfully obtain the necessary operating license from the NRC in 2027, and how will changes in regulatory policy impact this timeline?
- Financial Viability: Given the company’s reported losses and the lack of current revenue, how will Oklo sustain its operations and growth in the coming years?
- Public and Political Reception: How will public opinion and political dynamics evolve regarding nuclear energy, particularly in light of safety concerns and environmental considerations?
- Long-term Contract Stability: What will be the long-term implications of the Air Force contract for Oklo, and how might future military needs shape the demand for microreactors?
As these questions unfold, the trajectory of Oklo and its microreactor project will likely remain a focal point in discussions about the future of nuclear energy in the United States.
