Will Oklo make money before OpenAI’s Sam Altman cashes out?

One of the fun things about being a Silicon Valley executive is that there are so many different ways to make money.



Sam Altman, CEO of AI powerhouse OpenAI, also runs a famed startup incubator called Y Combinator. That position afforded him the opportunity in 2013 to meet a new company in the nuclear power business, Oklo , which he invested in. Altman was intrigued by the Oklo’s mission to make a more-efficient nuclear reactor to meet the abundant energy appetite being generated by companies such as OpenAI and their raging use of AI chips.



Altman became Chairman of Oklo, and, eight years later, with no revenue yet produced at Oklo, he hit upon another way to make money with the same venture. Altman formed what’s called a SPAC, a “special-purpose acquisition company,” classically known as a “blank-check company” because they offer shares to the public in an IPO without yet having a business. Investors who buy SPAC shares are giving the SPAC managers a blank check to use the IPO money to later buy whatever business the SPAC owners deem worthy.



Altman’s SPAC, named, appropriately enough, AltC, raised half a billion dollars in 2021, and went hunting for something to spend it on. According to Michael Klein, AltC’s chair, the SPAC searched far and wide for a nuclear power company to buy. “We’ve had the ability to review every nuclear opportunity that has come to market,” he said in a filing last summer .



Altman, however, knew exactly which nuclear company AltC should acquire.



As detailed in a proxy statement last month , Altman had a telephone conversation with Klein in October of 2022, in which he “raised Oklo as a potential target in the nuclear fission industry with which AltC should consider pursuing a business combination.”



Altman recused himself from the boards of both Oklo and AltC while they mulled his suggestion that they merge, a process that included various videoconference calls with the CEO of Oklo, Jacob DeWitte. Amazingly, despite no revenue at Oklo after nearly a decade in operation, and despite a long and winding path ahead to achieve its goals, the company was able to convince Klein and the AltC board that Oklo was worth $750 million to $800 million, a figure Klein and the board felt was justified given the valuation of other companies in the energy field, such as NuScale Power Corp.



Lo and behold, AltC did in fact decide to buy Oklo by merging all the shares of Oklo into those of AltC. The deal was announced last summer, but the two were only formally merged via a vote of stockholders on May 7th. (You can see all the documents pertaining to the vote on the special site set up for the May 7th meeting )



And on May 10th, the combined entity, Oklo, began trading on the New York Stock Exchange under the ticker “OKLO.”



Now, Altman, who remains a director at the combined company, owns roughly six percent of Oklo, seven million shares, which is currently trading at $9.09, just above the $8.45 at which it ended the first day of trading. That’s a roughly $63-million-dollar haul. 



Not bad, and it shows you that there are always other ways to make money in Silicon Valley.



Altman’s shares are held up in various performance-based vesting schedules, but those “triggers” that allow stock sales will likely be realized well before Oklo has a business. The terms of the “earnout” events that allow his stock to vest are tied to the stock staying above a certain price for a period of 20 consecutive days, which is probably going to be a lot easier to achieve than the company’s actual business plan.



The pursuit of efficient reactors has been all the rage in the power industry for some time now. Fast Company recently profiled the IPO of another young hopeful, Nano Nuclear, which is making what’s called a “small modular nuclear reactor.”



Oklo has a slightly different path in that it is pursuing an older technology that it argues is well-proven in the market. The “liquid-metal-cooled, metal-fueled fast reactor” is the kind that has been in operation for “over 400 reactor-years” in plants around the world.



Oklo’s innovation is to press hard on the use of the waste materials that come out of a reactor, and recycle it into fuel. The company already has secured one plant, and with the help of the U.S. Department of Energy’s Idaho National Laboratory, it is going through tests, taking waste from an existing liquid-metal-cooled reactor, the Experimental Breeder Reactor-II, a plant in Idaho that was shut down in 1994 and given to the Lab as a research project.



If those experiments prove successful, Oklo plans to use the technology for its first plant, named the Aurora Powerhouse.



Oklo still faces all the challenges of Nano Nuclear, which include not just developing the technology but also securing regulatory approval. The company is expected to have its first plant in the market by 2026 or 2027, although the company’s formal materials describe bringing its first plant online “before the end of the decade.”



In addition to the technology and the regulatory challenges, Oklo has set itself up a novel business challenge. It plans not to sell reactors but to become its own “vertically integrated” utility, designing, building, operating the plant and then selling power. The appeal is that after sinking lots of money into building a plant, at some point, a reactor can become a cash cow as the costs are depreciated and money rolls in over the expected 40-year life of the reactor.



That is a more complex business than Nano Nuclear’s bid to sell reactors. It’s also more complex than Altman’s current business of buying Nvidia GPU chips and selling access to ChatGPT.



Altman, however, sees an exquisite symmetry in ChatGPT and nukes. Last summer, he explained on a conference call with AltC stockholders his vision for cheap power enabling even more cheap “intelligence” in the form of ChatGPT and the like.



“I think the two most important technological trends to happen in this decade, are abundant, inexpensive energy, and abundant, inexpensive intelligence,” said Altman.



“These are two things that I think drive almost everything else in our economy, everything else that we need to have great lives for people. And if these radically change if the availability of inexpensive, accessible, safe, clean energy, and inexpensive, accessible, powerful intelligence, if the structure of those change, the economy can really change, too, and I think it can be a quite remarkable future for people.”



It’s tantalizing, but it will certainly require patience on the part of investors on the way there. You may want to check the stock price now and then to see if Oklo’s stock maintains levels of $12 to $14, which would grant Altman and other insiders a chance to “earn out” and be out of there, or stay put and stick with the mission. Which option they choose could be important indicators of how Oklo is faring.