In the context of rapidly increasing global electricity demand, Small Modular Reactors (SMR) are emerging as a key solution to meet the needs of data centers, industrial manufacturing, and electrification. On October 18, JPMorgan Chase in its latest report stated that this technology aims to overcome the economic and construction bottlenecks of traditional large nuclear power plants through simplified design, standardization, and factory manufacturing, thus paving a new path for clean baseload power supply.

JPMorgan noted that there are currently 99 SMRs in active development globally, with only 7 of them being constructed or operational. The concepts of air-cooled and water-cooled SMRs are leading the way in recent deployments. The International Energy Agency (IEA) forecasts that if deployments proceed smoothly, SMRs could account for 10% of global nuclear power generation capacity by 2040, with the U.S. contributing 20% of that growth.

The report highlighted that the executive orders from the Trump administration injected strong momentum into SMR development. The new policy prioritizes civil nuclear energy as a matter of national and economic security, urging federal agencies to expedite the deployment of advanced reactors, simplify regulatory reviews, and open government fuel reserves. Regulatory reforms will reduce licensing review times to 18 months, with a goal to have three advanced reactors operational by July 2026, while also expanding investment and production tax credits to significantly improve project economics and reduce licensing risks.

However, JPMorgan believes that the successful deployment of SMRs still depends on government support, technological iterations, supply chain development, and regulatory approvals. Next, we provide a detailed analysis of SMR technology that may become the ultimate solution for AI power supply based on JPMorgan's report.

Core Advantages and Market Positioning of SMR Technology The report states that SMR redefines nuclear energy application scenarios through five core features:

1. Small-scale design allows for flexible deployment in various locations; 2. Modular construction supports on-site assembly to lower costs; 3. Capable of both off-grid and grid-connected installation modes; 4. A fuel cycle lasting up to 30 years; 5. Built-in passive cooling mechanisms to simplify design and reduce costs.

According to data from the Nuclear Energy Agency (NEA), SMR developers are primarily headquartered in the U.S., Canada, and Europe. By reactor concept classification, the market is currently dominated by water-cooled reactors, followed by gas-cooled and molten salt-cooled designs. From the perspective of site owners, utility companies, industrial users, and government agencies represent the main client groups, with rapidly growing demand from data centers.

The unique value of SMRs lies in their ability to meet diverse energy needs. High-temperature gas-cooled reactors can provide process heat above 750 degrees Celsius, suitable for hydrogen production, district heating, and industrial applications that traditional large reactors struggle to cover. Fast reactor SMR designs, while facing limited licensing progress, possess significant technological advantages in fuel efficiency and cost control, encompassing concepts such as gas cooling, heat pipes, metal cooling, and molten salt cooling.

Main Technical Routes and Development Progress SMR technology is divided into five concepts based on coolant type: water-cooled, molten salt cooled, gas cooled, heat pipe cooled, and metal cooled. Water-cooled reactors represent most recent concepts, with Light Water Reactors (LWR) being the closest to recent deployments. Heat pipe and metal-cooled reactors represent more advanced technological development directions.

Light water reactors utilize established technologies, including Boiling Water Reactors (BWR) and Pressurized Water Reactors (PWR). NuScale's 50 MW and 77 MW PWR designs are the only SMRs to receive standard design approval from the U.S. Nuclear Regulatory Commission (NRC), leading the regulatory process. GE Hitachi Nuclear Energy's BWRX-300 has submitted a construction license application to the Tennessee Valley Authority (TVA), making it the first U.S. utility to submit an SMR construction license.

High-Temperature Gas-Cooled Reactors (HTGR) use helium as a coolant and ceramic-coated fuel capable of producing temperatures of about 750 degrees Celsius. Key developers in this field include X-Energy's Xe-100 (80 MW), Ultra Safe Nuclear's MMR (5 MW), and Radiant's 1 MW design. These reactors have shown excellent performance in industrial applications but are constrained by a shortage of High-Assay Low-Enriched Uranium (HALEU) fuel supply.

Molten Salt Reactors (MSR) use a mixture of fluorinated salts as both fuel and coolant, operating at high temperatures with efficient heat transfer. Representing this technical direction are Kairos Power's 140 MW FHR, Natura Resources' MSR-100, Terrestrial Energy's 195 MW integrated molten salt reactor, and TerraPower's 345 MW thermal power reactor. Kairos has received NRC construction permission, becoming the first company in the U.S. to obtain a construction permit for a fourth-generation SMR.

Sodium-cooled fast reactors (SFR) utilize liquid sodium as a coolant and operate under fast neutron spectra, enabling fuel recycling and reducing nuclear waste. Significant development projects include Arc's ARC-100 (100 MW), Oklo's Aurora-INL (75 MW), and TerraPower's Natrium (345 MW), with the Natrium project expected to be operational by 2032.

Heat pipe micro-reactors utilize heat pipes for high thermal conductivity, with effective heat transfer rates ranging from 5000 to 200000 watts/meter. Westinghouse's eVinci micro-reactor (5 MW), Oklo's Aurora Powerhouse, Antares Nuclear's R1 micro-reactor, and Radiant Industries' Kaleidos micro-reactor (1.2 MW) are currently under development.

Regulatory Environment and Deployment Timeline JPMorgan stated that U.S. nuclear power plants must undergo safety, environmental, and anti-trust reviews by the NRC, obtaining early site permits, design approvals, construction permits, and operating licenses. The traditional Part 50 route employs a stepwise licensing process, first acquiring a construction license before applying for an operating license. Introduced in 1989, the Part 52 route allows applicants to obtain a combined license (COL) for construction and operation when specific conditions are met, reducing default risks and enhancing certainty.

Regulatory reforms under the Trump administration have significantly accelerated the approval process. Executive orders require the Department of Energy and the NRC to set an 18-month review window, with some new designs potentially completing approval within 12 months after successfully finishing the pre-application phase. The NRC's joint licensing method further shortens approval times by only reviewing the "increments" between newly submitted and already approved designs.

According to JPMorgan's report, NuScale's 50 MW and 77 MW Light Water PWRs are currently the only SMR designs to receive NRC standard design certification. Kairos Power received fourth-generation SMR construction permits in December 2023, with construction starting in July 2024 and a target operation date in 2027. TVA has become the first U.S. utility to submit a construction license application for GE Hitachi's BWRX-300 SMR technology. Most competitors remain in the pre-application or pre-design licensing stages.

Surge in Data Center Power Demand Creates Market Opportunities JPMorgan believes that hyperscale cloud providers (Amazon, Google, Meta) may directly support SMR projects to meet the clean energy demands of data centers. Google has signed an agreement with Kairos Power to ensure SMR online by 2030, aiming for an installed capacity of 500 MW by 2035.

The Department of Energy has listed sodium-cooled fast reactors, high-temperature reactors, and molten salt reactors on its 2030 deployment watchlist. Among the 25 SMR projects tracked by the World Nuclear Association, most are in pre-investment, collaboration agreement, project relationship, final investment decision, or construction stages. Kairos Power's Hermes molten salt-cooled reactor is the only project currently "under construction".

NuScale, Oklo, Westinghouse, TerraPower, and X-Energy are the most active developers, promoting project financing and site selection through collaboration with major utility companies, industrial users, and government agencies. Some projects have received loan approvals and technical investment agreements supported by the U.S. Department of Energy.

Commercialization Still Faces Multiple Challenges JPMorgan points out that the wide range of technical routes leads to intense competition, which may hinder any single technology from achieving commercial critical mass. While the regulatory framework is evolving, it often lags behind the diversity and novelty of SMR technologies, particularly non-water-cooled and advanced designs facing licensing uncertainties and delays.

Uneven supply chain readiness poses a significant bottleneck. Many new forms of fuel and reactor components have not achieved commercial-scale production. Limited availability of HALEU fuel presents major obstacles for many advanced SMR concepts. The Nuclear Energy Institute (NEI) projects that NAHALEU demand in North America will grow rapidly, but building supply capacity will take time.

The economic viability of SMRs still requires validation. Although they seek economic advantages through factory manufacturing and modular design, first-unit costs and economies of scale remain critical challenges. BloombergNEF's analysis indicates significant differences in progress across financing, regulation, projects, and timelines among different developers. NuScale is leading in regulatory approvals, while X-Energy and Oklo excel in project pipelines and customer bases.

International cooperation is essential for accelerating SMR adoption and scalability. Currently, global SMR projects are mainly concentrated in North America, with over 30 projects at various development stages in Canada and the U.S. Ontario Power Generation's 1.2 GW project at the Darlington nuclear facility, in collaboration with GE Hitachi, is scheduled to be operational by 2029, making it the first SMR project to be implemented in the Western world.