Rolls-Royce taps AI and nuclear power in bid to become UK’s most valuable company

Rolls-Royce CEO Tufan Erginbilgic has outlined an ambitious plan to propel the company to the top of the UK stock market, driven by its position at the intersection of nuclear power and the artificial intelligence (AI) boom.

In an interview with the BBC, Erginbilgic stated that the company has the “potential” to become the UK’s highest-valued firm, a goal he sees as achievable through its development of Small Modular Reactors (SMRs) to power energy-intensive AI data centres.

The engineering giant has already signed agreements to provide SMRs to the UK and Czech governments. The AI revolution, while driving economic growth, has created a massive demand for energy, prompting a search for sustainable and reliable power sources. Rolls-Royce’s SMRs, which it claims are smaller, faster to build and potentially cheaper than traditional nuclear plants, are being positioned as a key solution to this challenge.

Erginbilgic, who has overseen a ten-fold increase in the company’s share price since taking the helm in early 2023, is highly confident in the future of the technology. “There is no private company in the world with the nuclear capability we have,” he said. He estimates a global need for 400 SMRs by 2050, representing a trillion-dollar-plus market that he expects Rolls-Royce to dominate.

Despite the technology being unproven with no working SMR example yet, major tech companies like Google, Microsoft, and Meta have already signed deals to secure energy from SMRs in the United States. This demonstrates the high demand for a nuclear-powered solution to AI’s energy needs.

However, Erginbilgic, has dismissed the idea of a US stock market listing, a path other British companies have considered, stating: “I don’t agree with the idea you can only perform in the US. That’s not true and hopefully we have demonstrated that.”