Welcome back to Greenwashed! π
As the world continues to struggle through what will likely end up the hottest month in world history, it's becoming more and more clear that we are far behind where we need to be in the race to decarbonize.
Many proposed "solutions" (looking at you, electric vehicles and solar power) to the climate crisis are simply less bad for the environment, and rely on a level of resource extraction and reuse that simply cannot scale to a global level with the current amount of estimated supply that the world has. π
One solution, though, stands out from that paradigm: nuclear. And that's where we begin our edition this week, with one of Silicon Valley's most famous new kids on the block putting his weight behind the promise of nuclear energy. β¬οΈ
Oklo Goes Public πΈ
Most people know Sam Altman from his role as CEO of OpenAI, but long before the internet became flooded with news of AI passing the bar exam or Chat-GPT-written announcements of mass shootings, Altman was the head of influential Silicon Valley incubator Y Combinator, where he oversaw the founding of and became Chairman of the Board at Oklo.
Oklo was one of many companies looking to build and scale small modular nuclear reactors (SMRs), which many tout as the ultimate way to scale nuclear energy. Among many other benefits, SMRs are, as the name implies, modular, meaning that they can be built in a factory and then shipped and assembled on location. β‘οΈ
The biggest problem with nuclear energy by far is the massive cost to build power plants. Each plant is a huge, long-term, unique contract, and modularization is the ultimate fix to this.
Oklo has been at this for a while, but last week they announced their most significant step towards achieving scale. They're going public via an Altman-backed SPAC that will net them a whopping $500 million by early 2024--a sign that they're both ready and have the ammunition to start scaling. πͺ
Normally, a SPAC deal might arouse suspicion; they've often been criticized as ways for companies who are not ready to go public to prematurely tap into the liquidity of public markets.
Oklo, however, has the business model that fits the profile of a company that should use a SPAC. They have a long time horizon to profitability, but they need public-markets level financing to get there and have a product where it is certainly in the public interest to have them achieve. π€
It's also notable that Altman is leading the deal. With the rise of OpenAI, he's become as connected and influential as anyone in Silicon Valley, providing Oklo with all of the intangible ammo it needs to actually bring SMRs mainstream. For what it's worth, he also seems to be legitimately worried about the climate crisis (or AI, or both), as he famously owns an apocalypse compound complete with IDF gas masks, automatic rifles, and potassium iodide. π¬
From an individual perspective, Oklo's deal is also good news. I've personally been on their waitlist for a micro-reactor since 2018, and while they've paused those efforts in their roadmap because of how much PPA demand they've received, this bucket of cash provides them ample opportunity to scale SMRs to meet individualized demand as well.
Kerry Heads East π¨π³
A few weeks ago, we covered the surprise climate progress that came out of a foreign relations meeting between the U.S. and China. Despite rising military tensions, U.S climate envoy John Kerry was invited to Beijing to discuss the rising problem of the climate crisis.
At the time, there was no date for the visit. Both countries likely saw the brutality of this month, though, as Kerry's visit took place just this week, much earlier than anticipated. π€
Openly, China is still playing hardball, arguing that they're still a developing country and thus should be allotted more emissions, and also decreeing that any climate action they take will be their autonomous decision.
"[Climate goals] should and must be determined by ourselves, and will never be influenced by others" -Xi Jinping
Analysts expect that in reality, though, China is more committed to greening their economy than they let on. They're not immune from feeling the heat, as the arid part of northern China reached a record 126 degrees Farenheit. Meeting with Kerry at all is a sign that in the future, the two world powers could work together to solve this global problem. Β
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