Breakthroughs in machine learning and artificial intelligence (AI) are transforming industries and redefining what is possible. However, this technological advancement comes with a challenge: soaring energy demands from data centers.

Enter nuclear power -- a clean, reliable solution that's coming back into favor. With countries committed to reducing carbon emissions, nuclear energy stands out as a key energy source in the quest for sustainable growth. Many countries have joined the Declaration to Triple Nuclear Energy, vowing to increase their nuclear capacity threefold by 2050.

Major financial institutions like Bank of America and Goldman Sachs are also backing this movement, showing robust support for nuclear energy's potential to generate clean, reliable, sustainable power.

Image source: Getty Images.

Small modular reactors (SMRs) represent a groundbreaking advancement in the nuclear energy sector. They offer a modular and scalable solution that could potentially lower the costs associated with bringing reactors online. At the forefront of this exciting technology is NuScale Power (SMR -3.82%), a company looking to capitalize on the growing demand for clean energy.

As nuclear energy becomes increasingly attractive and garners broader support, investors may consider NuScale a compelling growth investment opportunity. Before diving in, there are a few things you'll want to know about the company and its technology.

Tech companies are turning to nuclear to power their growing energy needs

According to the power sector consulting firm Grid Strategies, electricity demand in the U.S. is projected to increase by over 15% in the next two years. The primary driver of this growth is the rising energy needs of data centers and the major technology companies that operate them.

Technology companies are striving to meet their energy needs while maintaining their carbon neutrality goals. As a result, many are turning to nuclear power to satisfy this demand. In October, Alphabet and Amazon announced investments in start-ups developing SMRs. These SMRs can be prefabricated in a manufacturing facility, allowing components to be transported for assembly at the project site.

Moreover, the modular reactors can be connected to scale to meet specific energy requirements tailored to each company. The hope is that SMRs will reduce the time required to bring reactors online and lower the costs of building the necessary nuclear infrastructure. That's where NuScale Power comes into the picture.

NuScale is currently the only company to secure a Standard Design Approval from the U.S. Nuclear Regulatory Commission for its 50-megawatt electric (MWe) SMR, seemingly giving the company an advantage over others.

The deployment of SMR technology is years away

NuScale has made strides since it was founded 18 years ago and appears to be leading the way in the U.S. with its SMRs. However, investors buying the stock today must realize it will take years before this technology is operational.

For one, NuScale has had to upsize its SMR to 77 MWe to make it more economical. It expects that the NRC will approve this larger SMR by July 2025. After that, full certification could take another couple of years.

Another problem with SMRs today is that the cost savings have failed to materialize. For example, in 2015, NuScale entered into an agreement with the Utah Associated Municipal Power System (UAMPS) to build 12 SMRs that would generate up to 600 MWe by 2030.

Initially, NuScale projected that the project would cost $3 billion. By 2018, projected costs rose to $4.2 billion, then $6.1 billion by 2020. By 2023, the project costs were up to $9.3 billion, over 3 times the initial costs, while at the same time, it scaled down its project size to 462 MWe. The project finally became too expensive, and UAMPS pulled the plug on it in 2023.

Last year, NuScale agreed with Standard Power to develop two facilities in Ohio and Pennsylvania powered by its SMR technology. The plan is to build 24 units of its 77 MWe modules, producing 1,848 MWe energy from both sites. Standard Power thinks this facility could be operational by 2029 at the earliest.

Is NuScale Power a buy today?

NuScale's technology could potentially revolutionize nuclear power and make it accessible and modular so that data centers, industrial operators, or even small, off-grid locations can generate electricity independently.

That said, NuScale is pre-revenue right now, and it will take time for regulators to approve its upsized SMR and even longer to build out its facilities. As seen by the UAMPS project, there is a risk of cost overruns, and investors may have to wait a while before their investment starts to pay off.

For now, NuScale is a story-driven stock that could go higher with the positive news surrounding nuclear energy. Still, its lack of commercial operations and cash flow makes the stock vulnerable to volatile sell-offs along the way. While I'm intrigued by the technology and excited to see where it goes, most investors are best off watching this stock from the sidelines for now.