An exchange-traded fund, a basket of stocks that trades on an exchange like a single share, centered on nuclear power companies is drawing attention as an alternative to the semiconductor-heavy AI funds that fill most investor portfolios. That fund is the VanEck Uranium and Nuclear ETF (NYSEARCA: NLR). Its core argument: electricity demand rises whether or not the AI data center buildout keeps accelerating.
Most AI-themed funds own the same cluster of chip designers and software companies. NLR takes a different path. It holds nuclear power producers and uranium miners, companies whose business does not depend on any single technology cycle.
The connection to AI is real, just indirect. Data centers consume enormous amounts of electricity, and the federal government has signaled it wants AI companies to secure their own power supply rather than drawing from the broader grid. Small modular reactors have become one preferred answer. Nuclear delivers continuous power around the clock, unlike solar, which goes dark at night and slows under cloud cover. Once a plant is running, the electricity it produces is cheap.
Why governments are pushing nuclear
The policy tailwind extends well beyond the United States. The Department of Energy has set a target for American nuclear capacity to rise from around 100 gigawatts in 2024 to 400 gigawatts by 2050. Taiwan began considering restarting its last nuclear plant. Japanese politicians called for faster reactor restarts. Belgium and the Netherlands walked back plans to exit nuclear power entirely. The European Commission warned member governments against shutting down productive reactors early. European Commission President Ursula von der Leyen went further, calling Europe's retreat from nuclear power a "strategic mistake," according to Reuters.
NLR is positioned to catch tailwinds from all of those policy shifts, independent of what any single AI company chooses to spend.
The case against rushing in
Nuclear's appeal is real, but building a plant requires an enormous upfront capital commitment, and projects routinely spend years in regulatory review before construction begins. Returns from NLR may trail semiconductor-focused AI funds in the meantime. A meaningful amount of optimism about nuclear's future is already reflected in current prices.
Those headwinds do not erase the long-term argument. Nuclear can displace natural gas in electricity generation. As electric vehicles spread, it can also substitute for oil in countries that import rather than produce it. The fund's exposure to uranium miners adds a second dimension: as reactor construction accelerates, uranium fuel demand follows.
The short version is that NLR's case rests on power demand growing regardless of what happens to AI spending. The constraints are an enormous upfront capital commitment and a regulatory process that can hold projects in limbo for years before construction even starts.