管理層發言
Good day, everyone, and welcome to Oklo Second Quarter 2025 Financial Results and Business Update Call. At this time, I would like to hand the call over to Mr. Sam Doane, Director of Investor Relations. Please go ahead, sir.
Thank you, operator. Good afternoon, and welcome, everyone, to Oklo's Second Quarter 2025 Earnings and Company Update Call. I'm Sam Doane, Oklo's Director of Investor Relations. Joining me today are Jake Dewitte, Oklo's Co-Founder and Chief Executive Officer; and Craig Bealmear, our Chief Financial Officer. Earlier today, following the close of markets, we released our second quarter 2025 financial results. Today's accompanying slide presentation is available on the Investor Relations section of our website. Before we begin, I'd like to remind everyone that today's discussion, including our prepared remarks and the Q&A session that follows, will include forward-looking statements. These statements reflect our current views regarding trends, assumptions, risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed today. We encourage you to review the forward-looking statements disclosure included in our supplemental slides. Additional details on relevant risk factors can also be found in our most recent filings with the SEC. Please note that Oklo assumes no obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required by law. With that, I'll now turn the call over to Jake Dewitte, Oklo's Co-Founder and Chief Executive Officer. Jake?
Thanks, Sam. We're starting today's update by highlighting a wave of federal actions that are accelerating momentum behind advanced nuclear technologies and how Oklo is extremely well positioned to benefit. Over the past quarter, we've seen exceptional policy movement from sweeping executive orders to major legislation and national infrastructure strategies. Together, these actions reflect a coordinated federal push to speed up deployment of advanced nuclear technologies, strengthen domestic fuel supply chains, and enhance U.S. energy independence. For Oklo, this shift is highly beneficial. These aren't just favorable signals; they're concrete steps that support faster licensing, faster deployment, and better project economics for first-of-a-kind deployments. The next few slides will unpack the most significant drivers, the executive orders, the One Big Beautiful Bill, and the Federal AI action plan, all of which align directly with Oklo's licensing strategy, customer partnerships, and long-term cost advantage.
The executive order signed earlier this year marked a historic shift in federal policy toward advanced nuclear. These executive orders build on legislation from the last Congress and administration to clearly recognize civil nuclear energy as a national and economic security priority. That designation alone reshapes the policy landscape and unlocks access to key government assets, including alternative fuel materials that do not require further enrichment. When used in advanced reactors like Oklo's, these material stockpiles could be made into fuel for more than 3 gigawatts of powerhouses. Just as important, these orders direct the DOE and NRC to move faster, streamlining regulatory reviews, reforming reactor testing, and targeting 3 operational advanced reactors by July 2026. It's rare to see this level of alignment across permitting fuel access and deployment. The executive orders go beyond signaling support.
They include clear directives that align directly with Oklo's strategy. First, they revitalize the domestic nuclear fuel supply chain with a specific emphasis on recycling. Oklo is one of the few fast reactor companies positioned to use downblended alternative fuel materials, which don't require enrichment. This fuel, combined with the industry-leading advances we are making in fuel recycling, can give us a significant structural advantage. Second, the orders prioritize the deployment of reactors at national security locations, including AI data centers and defense sites that align with where our customers are heading and where our small scalable powerhouse designs excel. Third, the orders mandate licensing reform, capping fees and setting an 18-month review window for new reactors. That level of regulatory clarity and speed will accelerate Oklo's path to market and strongly supports our combined license strategy.
And finally, these orders direct DOE to accelerate reactor testing and target 3 operational advanced reactors by July 2026. That's an aggressive timeline and one Oklo could qualify to help deliver on. The One Big Beautiful Bill signed into law in July delivers a suite of policy wins that are directly aligned with Oklo's business model. First, it preserves robust investment and production tax credits through 2033 that then phase out through 2036. These credits improve our project economics and offer additional certainty for early-stage deployment. Second, the bill strengthens the loan program's office, establishing the energy dominance financing program. This is important because it provides access to long-term capital for projects that can't yet tap traditional debt markets like first-of-a-kind deployments. Third, it accelerates NEPA, the National Environmental Policy Act reviews, by setting strict deadlines for environmental assessments and impact statements.
That helps reduce permitting delays and improves timeline confidence across our project portfolio. And finally, the bill allows for 100% bonus depreciation for assets that begin construction by 2029 and are in service by 2033. That gives us the ability to capture meaningful tax benefits as we build out fuel and manufacturing capabilities. The federal government's AI action plan, also released in July, is a major new dimension to the demand landscape for advanced nuclear. The plan calls for a rapid expansion of AI infrastructure, including high-security data centers and resilient domestic energy systems to support them. It explicitly recognizes that achieving AI dominance requires building new sources of reliable, dispatchable power like advanced nuclear reactors. Our powerhouses are uniquely suited for this use case, delivering distributed baseload power that can be co-located with mission-critical AI workloads.
The policy also calls for streamlining permitting, deregulation, and expanded workforce training to support infrastructure deployment. As AI infrastructure scales, we expect both commercial and policy momentum behind advanced nuclear to continue building, and Oklo is focused on delivering power solutions that meet that need. With that context, I'll turn it over to Craig to walk through how our mission, model, and design choices are translating into real execution advantages.
Thank you, Jake. Our mission at Oklo has always been clear: to deliver clean, reliable, and affordable energy at a global scale. Our co-founder started this company with the belief that advanced nuclear could play a transformative role in the world's energy future. That meant rethinking the entire model from how we design reactors to how we license, fuel, and operate them. That vision continues to guide us today, and it's now clearly aligned with where policy, technology, and customer demand are headed. Moving to the next slide. Oklo's competitive edge comes from the intersection of 3 key strategies: our business model, our sizing philosophy, and our technology. First, we build, own, and operate our powerhouses, selling power under long-term contracts. That creates recurring revenue and enables us to move more efficiently through the regulatory process. Second, our small scalable design allows us to deploy assets quickly, match customer demand in an incremental fashion, and significantly tap into existing supply chains with factory fabrication, which reduces site complexity, cuts cost, and supports faster rollout.
And third, our technology is based on proven liquid metal fast reactor designs with over 400 reactor years of operating history behind it worldwide. That gives us a deep technical foundation with built-in performance and safety benefits. Importantly, it enables us to move directly into commercialization without the need for a costly and time-consuming demonstration plant. And finally, I really can't emphasize this point enough. It provides flexibility for Oklo to use fresh HALEU, recycled fuel, and downblended alternative fuel for our powerhouses. Together, these advantages position us to deploy at speed and scale with a structure built for long-term growth. This past quarter, we made meaningful headway across all elements of our milestone framework, from licensing and project execution to field development, customer growth, and strategic partnerships. We advanced our NRC engagement, completing Phase 1 pre-application readiness, and saw our licensed operator topical report formally accepted for review.
We also took another step towards deployment at scale by selecting Kiewit as our lead constructor for the first Aurora powerhouse at INL. On the customer front, we expanded our pipeline of commercial opportunities with both the Department of Defense and Liberty Energy and advanced our corporate development efforts through agreements with Korea Hydro and Nuclear Power and Vertiv. We also remained disciplined on spend, keeping our cash burn in line with expectations and ending the quarter with a strong balance sheet. I'll now hand it back to Jake to walk through the progress we made this quarter across our licensing project and commercial front.
Thanks, Craig. We continue to make meaningful progress this quarter across our regulatory priorities. We completed Phase 1 of the NRC readiness assessment for the Aurora INL combined license application. The NRC found no significant gaps that would bar acceptance for review, reinforcing our readiness to submit Phase 1 of the application, which we expect to file in early Q4 after incorporating NRC feedback. We also had our license operator topical report accepted for review. This is an important part of our repeatable deployment strategy. It proposes licensing operators by Aurora technology rather than by site. Once approved, this report can be referenced in future applications, streamlining regulatory timelines and supporting scalable deployment. We're also seeing continued tailwinds across the regulatory landscape. The NRC recently accelerated Terra Power's review timeline by 6 months and introduced new fee reforms, reducing licensing costs through waivers and lower hourly rates.
These changes further reinforce the momentum we're seeing and could benefit Oklo's licensing path going forward. And finally, recognizing that there's a lot to track on the regulatory front, we launched a public regulatory dashboard on our website that provides a transparent view of our progress across powerhouses, fuel, and radioisotope licensing, helping keep all stakeholders informed as we move forward. Fuel is one of the most important inputs for advanced nuclear, and it's one of the areas where Oklo has built a significant strategic advantage. Our design enables a differentiated fuel strategy built around 3 complementary sources: access to government stockpiles, commercial supply partnerships, and long-term recycling capabilities. This approach provides greater flexibility, cost control, and resilience than traditional fuel models. First, we were awarded 5 metric tons of high-assay low-enriched uranium or HALEU from the Department of Energy in 2019 for our first powerhouse at INL, and we're uniquely positioned to utilize additional government fuel stockpiles made available under recent executive orders, including enriched uranium and plutonium-based materials that don't require further enrichment.
These stockpiles, effectively waste materials that would otherwise be destined for costly disposal programs, can instead be turned into a productive asset for clean energy by Oklo. Second, we're working with enrichers such as Centrus and Hexium to meet both near-term and long-term commercial HALEU needs. Centrus supports early deployment with available domestic supply, while Hexium's next-generation atomic vapor laser isotope separation or AVLIS enrichment technology could enable lower-cost scalable production over time. And third, our fast reactors can use recovered nuclear material from both today's nuclear fleet and future advanced reactors, positioning us to recycle fuel over time and build a vertically integrated long-term supply model. Together, these efforts form a comprehensive and resilient fuel strategy, one that supports near-term deployment while building long-term supply independence.
As mentioned, fuel is a critical enabler for advanced nuclear deployment. That's especially true for HALEU, which comes with its own cost dynamics. Enrichment is measured in SWU or separative work unit and so are its costs. Costs of enrichment are actually driven by both ore and enrichment process efficiency. Producing 1 kilogram of HALEU requires roughly 35 to 60 SWUs plus 30 to 50 kilograms of natural uranium depending on market conditions that can create a wide range of cost outcomes. That said, Oklo's design and business model position us well for this market. We benefit from needing consistent high-volume fuel across many small units. That matches well with enrichment module capacities and allows us to scale demand over time. Smaller cores also mean more units in the field, creating steady annual uptake that supports long-term supply agreements. We're also watching next-generation enrichment closely.
Laser-based approaches like Atlas could unlock more cost-effective batch-friendly production over time. Our engagement with Hexium positions us to benefit as that innovation matures. In short, we're managing HALEU costs in the near term, while building a supply model that reduces volatility and lowers long-term fuel exposure. Oklo's fuel strategy isn't just well designed; it's being executed today to support rapid deployment and long-term resilience. We've secured HALEU from DOE for our first commercial unit and our fast reactors are uniquely capable of using down-blended uranium and plutonium-based fuels, stockpiles that would otherwise be slated for disposal. With recent policy changes unlocking access, we can fuel dozens of early units from existing government material. We're also executing on commercial partnerships, Centrus for long-term HALEU and Hexium for long-term innovation. Their Atlas technology could materially improve enrichment economics over time.
And our fuel strategy doesn't stop at procurement. We're building towards recycling. Oklo's reactors are designed to run unrecovered fuel, supporting a close fuel cycle and long-term resilience. This isn't just a vision for the future; we're operationalizing the strategy now with a model designed to scale. There's a growing consensus that nuclear power is fundamental to the country's energy future, but historically, costs and time delays have held it back. Nuclear power is already the most land and material-efficient energy source, but decades of legacy design, complex safety systems, and custom-built construction have driven up both costs and timelines. At Oklo, one of the reasons we're in a strong position today is the disciplined approach we've taken to design and cost engineering from the outset. Our liquid metal sodium cool design enables inherent and passive safety, reducing the number of safety grade systems we need.
That simplifies our architecture, streamlines regulatory reviews, and lowers both capital and operating costs. We've also minimized the physical footprint of each powerhouse and designed around supply chain scalability, leveraging conventional components and proven industrial partners. In the next few slides, we'll talk through how these choices translate to faster and more cost-effective deployment, starting with our supply chain and system architecture. This is where our design and supply chain strategy come together to deliver real execution benefits. Roughly 70% of our powerhouse components are sourced from nonnuclear supply chains, industrials, energy, and chemicals, for example. These sectors offer mature, scalable manufacturing capabilities that we can tap into today at lower cost and with shorter lead times than traditional nuclear fabrication. This isn't just about lowering cost; it's about reducing schedule risk as well.
By designing around standardized shippable components like the reactor module, steam generators, and power conversion system, we simplify installation, support parallel builds, and minimize on-site construction complexity. We've also reduced the number of safety-grade systems by designing for inherent and passive safety. That helps streamline procurement and reduces the regulatory burden on our supply chain. Our preferred supply agreement with Siemens Energy is a great example of this strategy in action, and we continue to build out that ecosystem with more partnerships to come as those deals reach commercial readiness. These decisions help us scale faster, deliver sooner, and meet the needs of customers who value both certainty and speed. We're also pleased to announce that we selected Kiewit as the lead constructor for the Aurora INL powerhouse. Kiewit is one of the most experienced engineering and construction firms in the country with deep expertise in complex energy infrastructure, including nuclear projects.
Their capabilities go beyond construction. They also bring integrated procurement as well as asset and component fabrication capabilities that align well with our modular repeatable design approach. We've entered into a master services agreement with Kiewit intended to support the full scope of design, procurement, and construction for the Aurora INL project. Preconstruction activities are scheduled to begin this quarter, including site mobilization, early procurement, and groundwork. We're targeting a preconstruction groundbreaking in late Q3. This partnership and these efforts help ensure we're positioned to deliver our first powerhouse on a realistic, executable schedule with commercial operations targeted between late 2027 and early 2028. In parallel, Atomic Alchemy, our radioisotope business has also begun site characterization work on its commercial isotope production facility at INL and submitted its materials license application through the NRC for its demonstration facility, continuing momentum on facility development for domestic radioisotope production.
The demonstration facility will also produce revenue-generating isotopes, marking an early step toward commercial operations. We also signed a memorandum of understanding with Korea Hydro and Nuclear Power, one of the largest and most experienced nuclear operators and builders in the world. The agreement is focused on exploring opportunities to collaborate across a range of areas, including project development, licensing, manufacturing, and supply chain coordination. This partnership reflects a shared interest in deploying advanced reactors globally and in continuing to drive innovation across the nuclear value chain. It also aligns with our broader strategy of forming international partnerships that can support commercialization and accelerate deployment. As part of our work with data center customers, we also announced a joint development agreement with Vertiv, a leader in data center infrastructure.
The partnership focuses on co-developing integrated power and cooling solutions that take advantage of our ability to co-locate power generation and compute infrastructure. With Vertiv, we're building smarter nuclear power systems for compute-intensive infrastructure that could be a huge win for our customers. Vertiv will use steam from our powerhouses to drive chillers, improving the overall energy efficiency of the data center. This helps reduce total energy costs and allows customers to streamline infrastructure with a single integrated solution. It's a strong example of how we're working directly with customers and infrastructure partners to deliver tailored solutions at the core of their operations, not just selling power, but operating integrated value where it matters most. We continue to have active discussions with other commercial partners and suppliers to round out our deployment ecosystem, ensuring we can deliver scalable energy infrastructure with speed, reliability, and efficiency. With that, I'll hand it over to Craig to expand on our commercial momentum and walk through the financial and customer updates from the quarter.
Thanks, Jake. One of the partnerships we're very excited to highlight this quarter is our work with Liberty Energy. Liberty was an early investor in Oklo while we were still a private company and former CEO, Chris Wright, served on our Board prior to his appointment as the United States Secretary of Energy. We are excited that there continue to be opportunities to collaborate with Liberty in a meaningful way. This partnership is designed to solve a very real customer challenge: how to access reliable power now with a clear path to zero carbon baseload power over time. Together, we have the potential to offer a fully integrated solution that starts with Liberty's gas generation and load management platform that can transition to Oklo's nuclear powerhouses as they come online, providing a faster path to clean energy. This is a strong validation of Oklo's business model. It demonstrates how our powerhouses can integrate with existing infrastructure to deliver a phased approach that's flexible, financeable, and customer aligned.
Customers get the uninterrupted energy today and a long-term certainty around clean baseload power. And together, we're building a joint commercial platform designed to scale. We were also selected by the U.S. Air Force as the intended awardee for what would be a first advanced vision deployment at a U.S. military installation. Under the terms of the Notice of Intent to Award or NOITA, Oklo was identified as the successful awardee to design, construct, own, and operate a powerhouse that would deliver both electricity and heat under a long-term purchase agreement. This represents a major milestone both for Oklo and for the broader advanced nuclear sector. It reflects growing recognition of the role nuclear power can play in national security and energy resilience, particularly at distributed and remote sites where reliable power is mission critical. Oklo is actively working with the U.S. Air Force and Defense Logistics Agency, or DLA, on next steps, and we look forward to providing further updates as the process advances.
I will now provide a summary of our financials. Oklo's second quarter operating loss was $28 million, inclusive of noncash stock-based compensation expense of $11.4 million. Oklo's loss before income taxes in the second quarter was $24.3 million, which reflects our operating loss adjusted for net interest income of $3.8 million. On a year-to-date basis, when adjusting for noncash stock-based compensation charges, changes to working capital and deferred income tax benefits, the cash used in operating activities equates to $30.7 million. We still expect on a full-year basis, cash used in operating activities to be within the guided range of $65 million to $80 million that we disclosed at the start of this year. In addition, based on our earlier discussion points in this company update, we now see an opportunity to potentially accelerate some modest CapEx investments from 2026 into 2025, which could include advancing deployment activities at INL before year-end, progressing fuel supply and fabrication activities in response to the executive orders and other activities to deploy powerhouses beyond INL.
We also completed a successful marketed first follow-on equity transaction on June 12, generating $460 million in gross proceeds, providing the company with additional cash on hand to deliver our enhanced growth agenda. And as a result of the capital raise, we ended second quarter with approximately $683 million in cash and marketable securities on our balance sheet. To wrap up, I want to briefly highlight why we believe Oklo is one of the most compelling opportunities in the advanced nuclear industry. We're deploying proven fast reactor technology in a compact, scalable format designed to reduce cost, complexity, and deployment timelines. We are vertically integrated across power generation, fuel recycling, and radioisotopes, unlocking multiple high-value revenue streams. Our business model is built around long-term power sales, delivering recurring revenue, margin visibility, and customer stickiness.
We are pursuing superior economics through standardized design, repeatable deployment, and recycled fuel that drives long-term capital efficiency and competitive levelized cost of energy. Our 14-gigawatt pipeline spans data centers, defense, utility, and industrial customers, reflecting strong and growing demand. And we've developed a streamlined licensing strategy aligned with our business model backed by regulatory expertise, a repeatable collo path and accelerating federal tailwinds. At its core, Oklo is more than a technology company. We're building an energy platform to serve the world's next era of growth. Thank you for your time. Operator, we are now ready to take questions.
分析師問答
The first question today comes from Jeffrey Campbell from Seaport Research Partners.
Congratulations on all the multifaceted progress. Regarding pressurized water reactor fuel, current law appears to dictate that the DOE cannot take title to utility spent fuel until a permanent disposal site is designated. What's your take on how this might be amended to support Oklo's future recycling effort? And I ask this question in the atmosphere of the significant nuclear power push that's been coming from the executive orders and the deal to fiddle.
Thank you for the question, Jeff. As it stands now, there are no legal barriers preventing us from collaborating with utilities and the government to recycle the material. The main challenge is the availability of infrastructure to facilitate this process. Logistically, the situation is complicated because the Department of Energy is required to dispose of this material in a designated repository, which has not occurred. Consequently, the Department is compensating utilities for storing the material on-site due to their failure to fulfill obligations under the Nuclear Waste Policy Act. However, this presents us with a significant opportunity. Primarily, it allows us to manage fuel supplies effectively, as over 90% of the used fuel is essentially unused. Through recycling, we can harness this material, representing a vast resource. Advanced recycling methods, combined with our fast reactor technology, enable us to do this cost-effectively.
The prevailing academic view has often deemed nuclear recycling economically unfeasible, especially in the context of lower fuel costs and the need for higher purity fuel for current light water reactors. This is not an issue with fast reactors, which can accept lower purity fuel forms, allowing for a much cheaper facility. This results in lower costs for the fuel produced from recycling, which we believe will be significantly less than the cost of fresh fuel. This represents a major advantage, especially as we consider how to fulfill our orders and scale up our operations—leveraging recycling offers substantial upside. Additionally, it transforms waste management by reducing the volume of material. While we will still generate some high-level radioactive waste that requires disposal, recycling shortens the half-life significantly and changes the form factor, making it easier to manage. Some utilities are eager to expedite this process, while others are more cautious, wanting to see the infrastructure in place before engaging further.
We are having productive discussions with various stakeholders to find the most effective path for transferring material to us for recycling. Our efforts also provide a valuable service to the government in terms of managing this fuel under the Nuclear Waste Policy Act. There are further possibilities as we can utilize some of the fission products for industrial and medical purposes, and reducing the volume fundamentally alters our approach. From the utilities' perspective, the most promising material for us to begin with is the freshest fuel currently in storage pools, rather than the older fuel in casks. This choice is advantageous, given the storage pressures associated with that material. In summary, following the executive orders signaling a nuclear energy push, we are positioned to advance our plans for siting, building, and operating facilities to recycle material and produce fuel effectively. While this process takes time as we continue our pre-application and site selection work, everything is aligning for us to accelerate our initiatives, particularly regarding fuel management.
No, that's great color. And we could also add that the taxpayers are currently paying for the storage of the fuel. So there might be an argument there as if there's any resistance to moving that waste towards Oklo. I just wanted to ask you, sticking with fuels. Can you provide some color on the recently announced Atlas effort? It appears Hexium is most focused on Atlas for lithium to produce Tritium at this time. So I was interested to hear how the shift to uranium might be accomplished. I mean I'm aware of the history of Atlas, I mean what's specific to Hexium, how we move them to uranium.
I'll provide some additional insight. Jeff mentioned that Atlas involves atomic vapor laser isotope separation, which is a highly promising method for isotope separation using advanced technology. This approach combines lasers with isotope separation techniques, resulting in notable efficiency, cost, and operational enhancements compared to traditional centrifuges. This presents a significant opportunity to reduce the overall cost of fuel supplied to our systems. The methods employed in Atlas can be adjusted for various isotopes. Hexium initially focused on lithium due to favorable market conditions but is also exploring opportunities in uranium to advance this technology. The origins of this technology are closely linked to enrichment processes, particularly for uranium, and it also supports the production of stable isotopes relevant to our medical isotope business. All of these elements complement each other, and we are examining partnerships that enable high-purity isotope production for diverse applications.
While enriched uranium for fuel is a primary focus, there are also significant benefits in creating high-quality targets with enriched isotopes for radiation facilities and for direct product sales. We remain actively engaged in identifying the best partnership strategies in these areas. Overall, the enrichment sector is experiencing a notable push from new technologies due to R&D advancements and a growing market demand for enrichment capacity, leading to innovative methods that could significantly impact cost structures. Atlas has a rich history, and its previous lack of commercialization was largely due to a weak uranium market in the '90s and uncertainty about the value of investment. Additionally, our advancements in laser technology over the past few decades have transformed the landscape, making this a timely opportunity for Atlas, even as we collaborate with those utilizing established centrifuge technologies like Centrus.
The next question comes from Sherif Elmaghrabi from BTIG.
On the deal with Liberty, I imagine some of those customers are part of the 14-gigawatt pipeline that you have. It's interesting regarding the revenue aspect; could Oklo start recognizing revenues earlier, perhaps when those projects begin generating power from gas?
I can take that. So, it's still early days for how we turn that agreement into an actual set of commercial terms and conditions with our customers, and I'm not really at liberty to no pun intended to say who we're progressing those discussions with. But yes, you're correct. If there was a mechanism whereby we participated in early power sales, that could potentially lead to revenue recognition for the company.
Okay. Interesting. And Jake, one more. In your prepared remarks, you mentioned that you guys have one of the only reactor designs that can run on downblended fuel. Can you just speak to why that is? I thought that was pretty interesting.
Yes, that's a great question. There are several details to consider, so I’ll keep it brief. There are a couple of perspectives on this. Fresh, high enriched uranium is generally useful for most applications. However, there is limited availability of this material. What we typically encounter is often either rejected due to impurities or has already been irradiated. In the latter case, isotopes develop in the nuclear process that are not ideal for use in reactors that rely on moderators to slow down neutrons. Most reactors using TRISO fuel or water cannot efficiently utilize these isotopes without facing significant neutron penalties, unlike fast spectrum reactors where this is not a major issue. Additionally, there is another interesting source of material: excess plutonium inventories being released to the industry due to presidential executive orders. This represents a substantial opportunity, potentially producing hundreds of thousands of kilograms of HALEU equivalent material.
However, this material tends to be more suited for use in fast neutron reactors. Plutonium fuels have a longstanding history in fast reactors and can also be utilized in water-cooled reactors, but the necessary fuel fabrication infrastructure is lacking, making it more complex for core and reactor design compared to our current operations. Countries like France and Japan have successfully managed these processes, but it entails changes that existing plants may not be ready to adopt, especially since fresh low enriched uranium is a more effective fuel. Plutonium has different neutron absorption characteristics compared to uranium-235, which complicates management within light water reactors. Although feasible, it's more straightforward to implement in fast reactors. Moreover, fabricating plutonium-bearing fuels is generally simpler than creating oxide fuel for light water reactors. While there are many nuances, these aspects make the material highly appealing to us.
We believe that utilizing these materials in the near term can help meet the demand for HALEU while allowing supply chains to strengthen, facilitating quicker fuel shipments and reactor operations in the future, which is a key focus for us following those executive orders.
J. Dorsheimer from William Blair has the next question.
Jake, my first question for you is regarding your pipeline and the opportunities you're exploring. I'm interested in how you perceive the potential behind the meter compared to front of the meter. There seems to be more excitement surrounding behind the meter opportunities, especially related to data center expansions. How do you view the split in domestic power generation between these two areas? I also have a follow-up question.
It's a great question. We're seeing significant evolution in this area, moving at the pace of various opportunities and announcements related to policy, build-outs, and actual projects. Currently, the focus appears to be primarily on behind-the-meter applications and opportunities. However, in practice, the near-term reality seems to favor front-of-the-meter deployments before we fully embrace behind-the-meter solutions. This depends on ongoing conversations, especially regarding partnerships like the one with Liberty, which is crucial for providing the right set of options to ensure reliable and available power. While I'm confident that in time, nuclear can prove its worth, starting with a pure nuclear solution is currently more economically challenging compared to a diversified fuel source. Ultimately, behind-the-meter solutions look better on paper and make more sense, but the practical deployment realities favor grid-tied options.
I apologize if I'm overexplaining, but when I mention behind the meter, I specifically mean being behind the meter with minimal grid reliance. The optimal situation seems to be connected to the grid while considering the evolution of the sector. Generally, there's a preference for behind-the-meter offerings in the long run, though front-of-the-meter options hold significant value in certain markets. Overall, we're observing a mix that varies widely by state, location, and customer, but it seems there is a strong inclination towards behind-the-meter solutions over time.
Yes, you mentioned an important point. I believe the hybrid approach is really what I'm referring to. It appears to be where most of the current demand is focusing around SMR. That's why I was asking. As a follow-up, shifting to the radiopharmaceutical market, it's approximately a $30 billion opportunity, and it's growing. As you consider the isolation of specific isotopes, small quantities can indeed command a high price. Are there particular isotopes where you have a competitive advantage or unique capabilities due to your processing abilities? I’m curious if these isotopes are linked to specific drugs or applications. Any further insights on this would be appreciated.
Yes, I'm really enthusiastic about this. There’s so much more to come as we focus on how to prioritize selective isotopes where we have unique advantages. At a high level, we’re identifying some near-term opportunities with certain isotopes and examining the market dynamics and supply chain aspects as part of our pilot efforts in Idaho. Beyond that, we see significant scaling advantages and are exploring ways to engage with or invest in the supply chain to enhance our production capabilities for stable isotopes or specific targets. At scale, the appeal of Atomic Alchemy lies in its integration approach. One aspect is the potential to extract isotopes from recycling, including stable isotopes like Strontium-90, which have promising industrial applications that can be unlocked at large scale through recycling. Many of these isotopes are long-lived and currently trapped in waste, often overlooked because they haven't been studied due to their inaccessibility.
We anticipate this initiative will foster a new ecosystem and philosophy around isotopic research and development as these isotopes become available. Additionally, we're focused on the direct production of irradiating targets. We were drawn to Atomic Alchemy's Viper reactor design because it represents a cost-effective solution. Rather than building a highly specialized reactor that’s expensive but can produce isotopes, Atomic Alchemy’s approach is more practical—creating a reliable reactor that can be constructed in greater quantities at a lower cost. This enables us to access known isotope markets more competitively. Currently, these markets appear to have inelastic demand, meaning they will absorb whatever supply is available. Moreover, having a versatile range of isotopes will broaden our potential applications. While I can’t provide all the specifics yet, we will have more information soon.
The shift towards a mindset of abundance in isotope production could lead to expanded market opportunities, and we believe there’s significant growth potential in bolstering the production and availability of a wider variety of radioisotopes. As these become accessible, we expect increased investment and usage, which can cultivate a vibrant ecosystem in the industry.
The next question is from Ryan Pfingst from B. Riley Securities.
First, could you give us a sense of potential timing around the Eielson project milestones or maybe just how licensing and development might differ for projects located on military or defense installations like that one?
Yes, that's an interesting question. The situation has changed significantly following the signing of executive orders, which focused on leveraging and accelerating defense use cases. This particular project is a key example of that. It opens up possibilities for more streamlined and potentially faster reviews related to environmental and operational aspects. The Air Force is working through the Eielson project and is looking to obtain a NRC license for this facility. That is the overall plan. Additionally, the Defense Department has the authority to make decisions independently for deployments or other applications, providing them with flexibility, which is advantageous. Working at this facility in Alaska presents its own unique challenges. We're currently addressing the necessary work and site preparations to establish clear timelines for application submissions, construction start dates, and other related activities.
Given the limited construction window due to seasonal factors, we need to adapt our plans accordingly. We anticipate moving into detailed site work next summer, which will help refine our schedules. The Air Force has emphasized the significant potential of nuclear energy to enhance their mission capabilities. They are interested in collaborating with the industry to explore various models for delivering this energy. When working with the government, obtaining the right contracting structures is a key consideration. Historically, Defense Energy has focused on using defense land for renewable projects, which are often off the grid. However, this project targets internal energy needs, which is a unique and promising shift. Furthermore, it's not just electricity that is being procured; there’s also a significant amount of steam generated from our plants. A nuclear system mainly produces heat, which is usually converted into electricity, but in this case, some of that heat will be utilized directly for heating infrastructure, providing substantial value, especially in Alaska. This project is still developing, and we're actively working through these components, keeping the market informed as we progress.
Yes. I appreciate that, Jake. And then for my second question, shifting away from the federal side to commercial customers. How should we think about LOI to order conversion at this stage? Does the Liberty collaboration and some of the other partnership announcements you've made recently accelerate when we might see a firm order with one of the data center customers that's in your pipeline today?
Yes, I'll start with a little bit and then ask Craig to jump in as well. But I think in general, it's supportive in opening up different apertures of the conversations. But as we've said generally in the past, what we find is the demand isn't going anywhere. The opportunity in the market is pretty significant. The details are then figuring out the right ways to constructively build long and deep partnerships that really manage kind of the various aspects of these projects and the deployment realities in a much more sustainable and scalable way than just rushing into a PPA to make it sound kind of a little bit simplistic in how I answer that. But that is kind of the reality, which is we continue to keep these conversations at pace, and we continue to find a lot of enthusiasm and excitement. It really just seems to be as we kind of progress these things, the opportunity space of what's possible in terms of deepening and strengthening ties is looking at all parts of sort of the ecosystem to be supportive of our success and also, honestly, candidly, the success of the nuclear industry as a whole.
And we're excited about the positioning we have to kind of help lean into that. But yes, I mean, on the Liberty side, it does help set the stage for doing some things a little more, I would say, well a little different cadence in Tempo in some cases where you have that gas infrastructure. And what we continue to see is that the focus tends towards nuclear as a long-term solution, gas having a lot of opportunity in the near term. And really a cool thing for us is, we've been kind of pioneers in that bridging gas to nuclear on a new capacity, new deploy perspective. And I think we're seeing how that kind of unlocks thinking about different sites and different cadencing in different ways. But yes, so I'd say it does help. It kind of changes some of how we kind of cadence and tempo some of these customer discussions. But at the same time, we're still kind of focused on the macro, trying to make the most of the opportunity, if that makes sense through kind of the right partnerships. I've talked for a long time, though, Craig can add some more detail and color.
Partnerships require time to develop. Since we are aiming for more than just optimizing on a PPA price, it may take us a bit longer to establish everything, but this is for the right reasons. Our business development team is quite busy and often traveling, which also keeps the legal and finance teams engaged. We are making progress. Additionally, it seems that interest in front of the meter has significantly increased over the past year. We are aiming to be responsive to our customers as we advance these discussions. As I’ve mentioned in earlier calls, we are considering prepayments similar to what we executed with Equinix, and we are exploring various options at the asset level investment. We are currently investigating a wide range of opportunities with our customer base.
The next question comes from Derek Soderberg from Cantor Fitzgerald.
My congrats as well on the capital raise. I'll just keep that one question here. Jake, in the prepared remarks, you mentioned TerraPower's regulatory timeline. I think you said it's sped up by 6 months. I was wondering what the reason for that was? What did that entail? And are you already seeing some tangible benefits from the executive orders on regulatory timelines? Could Oklo see a sizable timeline shift forward as well?
I appreciate the question. One of the exciting developments is how responsive the NRC has been in aligning with the policy objectives of this administration to expedite processes, evidenced by their actions regarding TerraPower. We are also experiencing similar benefits. When we went public, the review process took about 24 to 36 months, but with the ADVANCE Act introducing a variety of contingencies, that review period is now capped at 18 months, which is a significant improvement. However, there are still various elements to consider, particularly in the pre-application phase, which has been positive. The Phase I readiness assessment has helped the NRC plan its review, ensuring they have all the necessary information, which highlights its importance. We were pleased to find no major gaps in our submissions, marking a significant achievement for both us and the NRC. Looking ahead to Phase II, we need to ensure we can navigate the licensing steps effectively within that 18-month timeframe, which benefits everyone by accelerating our processes.
We have to be realistic about certain factors that could complicate initial acceptance and the NRC's planning, so we want to be cautious. Readiness assessments are one way we manage these challenges, but they could still influence timelines and the quality of our submissions. Additionally, we are interested in how executive orders are paving the way for new licensing routes, which could greatly reduce timelines under Department of Energy authorization for various projects. This introduces exciting possibilities to expedite our initiatives. There may be a regulatory review completed under the Department of Energy, allowing us to build and operate a plant before transitioning to standard regulatory processes. This innovative approach could significantly alter the traditional industry mindset, which has remained unchanged for decades. There is now much more potential for faster plant construction and more efficient navigation through licensing obstacles.
We are still refining our strategies as we analyze all possible paths to optimize our efforts. The executive orders push us towards a more aggressive timeline, diminishing the risks associated with permitting processes. Moreover, there are changes in fuel availability due to developments in the EU that could enable the construction of multiple reactors without relying on HALEU, which is a considerable advantage. This shift creates a supportive ecosystem that has transformed our outlook compared to just three months ago.
The next question is from Craig Shere, Tuohy Brothers.
Hopefully, some quicker ones for me. So, do you have a timeline or roadmap for announcing PPAs on your INL plant? Do you have line of sight on sufficient fuel for full 75 megawatts there at this point? And given government support with rejected plutonium fuel that you say can support a lot. At this point, once you get past initial regulatory hurdles, could we see multiple powerhouses all announced at once?
We are continuing to make progress and notice increasing interest in power from the Idaho plant from various parties. The plant also offers fast neutron radiation capabilities, which is a significant advantage. We are exploring partnerships with government, industry, and academia to leverage our position. Additionally, we are working with Vertiv to establish a pilot thermal cooling system at the plant, which has attracted interest from potential partners. We anticipate a combination of offtake agreements and use cases, allowing us to remain flexible. I have always believed in a strong demand for this power, and current trends confirm that. Our focus remains on structuring arrangements that maximize value for everyone involved. The primary goal is to get the plant operational, and we are pleased to explore additional uses. Having diverse use cases is crucial as it brings different partners to the table.
Regarding fuel, we are in a unique position with 5 tons of material and are looking to secure more to operate the plant at its full capacity of 75 megawatts. While we have not finalized our plans, there are numerous sources of material available. We are coordinating the logistics while also preparing for multiple announcements in the near future. The potential of fast reactors and recycling excites us because it could meet global energy demands sustainably over the long term. We are motivated to build the necessary infrastructure to achieve this more quickly, especially following recent developments in the EU. Our interactions going forward will likely involve larger campuses with multiple plants. We are keen on establishing beneficial partnerships that will ensure our success in this endeavor, as we find exciting opportunities within the nuclear sector. Our model of designing, owning, and operating gives us a solid understanding of the necessary factors for success, especially when collaborating with the right partners.
Simplifying our approach is advantageous, and while utilities may not be the best stakeholders for pioneering these technologies, they can still play a role as supportive partners. Ultimately, we believe the dynamics are aligning favorably for nuclear energy's future, making it a viable and inevitable solution.
Eric Stine from Craig-Hallum is next.
Hey, Jake and Craig, just want to sneak in a few here at the end. So, the topical report accepted by NRC, I mean, is there a way to think about the timing of that process? I know that you're kind of taking a different path. So maybe that's a bit of an unknown, but maybe initial thoughts on how that speeds up the timeline? And then once you get through that, kind of what percentage of the process would that take care of that you then don't have to replicate for each successive deployment?
Yes, I believe there's a unique approach to the pre-application and topical reports. There is a strategy that involves providing information to the NRC without delving too deeply into the licensing phase until significant groundwork has been laid. This method has typically been used in the past but has not produced many successful results. What's crucial now is to utilize these processes more strategically, aiming for more than just the first plant. A topical report essentially allows us to present a regulatory issue to the NRC and receive a safety evaluation report, which sets a useful precedent for future applications. It’s akin to preseason licensing, where progress is made without completing everything at once, enabling us to break down complex tasks and address wider issues that could impact multiple plants. For instance, we might explore licensing operators to manage multiple reactors instead of just one, similar to how pilots can operate various aircraft models simultaneously.
This strategy provides substantial scalability benefits. Generally, we anticipate a timeline of around 12 months for this process, which will help with our future applications, especially for subsequent plants. Licensing is similar to playing sports; it’s not just about making the first move, but ensuring a strong follow-through for ongoing success. While it's challenging to pinpoint an exact acceleration for the first plant, this model will significantly expedite the process for future plants, which highlights the value of our approach.