On November 5th, Caixin Global News (Editor Shi Zhengcheng) reported that on Monday local time in the US, several star stocks closely related to the concept of 'nuclear power + AI' experienced varying degrees of decline. The reason is quite simple - the directive from the US energy regulatory agency directly hit the core logic of speculative trading.

Many investors probably didn't anticipate facing such twists and turns just before the US election.

What happened?

The Federal Energy Regulatory Commission (FERC) voted 2-1 last Friday to reject Talen Energy's proposal to increase power supply to Amazon data centers through its nuclear power plants.

At the core of the vote is the landmark transaction of 'nuclear power plants + data centers' this year. In early March, Talen Energy announced the sale of the Cumulus data center campus it plans to build next to its Susquehanna nuclear power station to the world's largest cloud computing platform, Amazon AWS, for $0.65 billion. The data center, once fully operational, will require 960MW of power, with construction progress over halfway.

In addition to selling the data center, AWS also signed a long-term nuclear power purchase agreement with Talen Energy. Against the backdrop of the huge and rapidly growing demand for AI, exploring the method of 'co-building nuclear power stations with data centers' ('behind-the-meter' transactions) was once considered the best short-term solution.

In June of this year, PJM Interconnection, which operates the US Eastern power grid, applied to FERC to increase the on-site power scale of the Susquehanna nuclear power station from 300MW to 480MW, sparking the recent dispute. Public utility companies American Electric Power and Exelon Power openly opposed this, believing that it could threaten the grid's reliability and increase electricity costs for other users.

The U.S. government explained in the ruling: the proposal does not adequately explain why federal rules should allow this special contract, this transaction will set a precedent, and related issues should be subject to more careful scrutiny. Without approval, Amazon's datacenter can still continue to use the established 300MW power capacity.

It is worth mentioning that the dissenting vote was cast by FERC Chairman Willy Phillips, who believes that grid operators have addressed reliability issues, and this executive order is a 'step backward' for power reliability and national security. Phillips emphasizes that artificial intelligence and related technologies represent a generational opportunity for national security and economic growth.

Of course, it cannot be denied that the 'power consumption conflicts' between data centers and ordinary consumers are now on the table. While PJM is one of the parties submitting reports to facilitate the trade, grid operators also warned at last Friday's public technical meeting that there may be a shortage of power supply by 2030, and those 'large consumers located at power plants' may cause power reliability issues and hinder appropriate planning.

Stock speculation faces setbacks.

As of the time of drafting, Talen Energy rose after opening down nearly 8%, with the latest decline slightly exceeding 3%. The company issued a statement last Sunday, stating that the company believes that 'FERC made a mistake,' and the company is evaluating options, focusing on commercial solutions. The company emphasizes that the plan to combine nuclear power plants with data centers is in the best interest of consumers, as it can provide services quickly and without costly grid upgrades to meet large load demands.

(Source: Talen Energy)

Driven by the AI concept, the company's stock price tripled during the year.

(Talen Energy daily chart, Source: TradingView)

At the same time, Consolidation Energy, which is closely related to "nuclear power datacenter", fell more than 10%. The company reported better-than-expected third-quarter results before Monday's market open and raised its full-year profit guidance. Previously, the company's stock price also doubled during the year.

(Consolidation Energy daily chart, Source: TradingView)