New ETF Bets on Nuclear Power to Fuel AI Revolution

DENVER, CO – February 19, 2026 – As the artificial intelligence boom strains global power grids, a new financial product is betting that the solution lies in a resurgent and miniaturized nuclear industry. SS&C ALPS Advisors has launched the ALPS Nautilus SMR, Nuclear & Technology ETF (NYSE Arca: SMRF), an actively managed fund designed to capitalize on what it calls a "compute + firm power" strategy.

The fund's launch highlights a critical challenge facing the 21st-century economy: AI's voracious and rapidly growing appetite for electricity. SMRF aims to offer investors a single vehicle to invest in both sides of this equation—the AI and technology companies driving the demand, and the nuclear energy sector, particularly emerging Small Modular Reactors (SMRs), positioned to meet it. "Artificial intelligence is accelerating global demand for resilient, always‑on power, and SMRF offers investors a comprehensive way to participate across the nuclear and technology ecosystem," said Ryan Mischker, Senior Vice President at SS&C ALPS Advisors, in the official announcement.

AI's Unquenchable Thirst for Power

The explosive growth of generative AI is creating an energy demand crisis that is reshaping industries and testing the limits of global infrastructure. According to the International Energy Agency (IEA), global electricity demand from data centers, which currently accounts for about 1.5% of all consumption, is on pace to more than double by 2030. AI is the primary catalyst, with its specific energy needs projected to quadruple in the same period.

This surge means that by 2030, the U.S. economy could consume more electricity for data processing than for manufacturing all of its energy-intensive goods like steel and cement combined. Industry analysts at Gartner predict that by 2027, 40% of existing AI data centers will be operationally constrained by a lack of available power, as utility providers struggle to keep pace. This has created a desperate search for new energy sources.

Tech giants are leading the charge, moving beyond traditional renewables to secure the reliable, 24/7 power their AI operations require. Amazon has invested in SMR developer X-energy, Google has partnered with nuclear startup Kairos Power, and Microsoft has made deals to secure nuclear power for its data centers. Their actions signal a powerful industry consensus: the AI revolution cannot be sustained without a corresponding revolution in clean, firm power generation.

Nuclear's Renaissance and the SMR Promise

For decades, nuclear energy faced headwinds from public perception and high construction costs. Today, it is experiencing a significant resurgence, rebranded as a critical source of carbon-free, baseload power. The development of Small Modular Reactors is at the heart of this revival.

Unlike the sprawling, custom-built nuclear plants of the past, SMRs are designed to be smaller, factory-built, and deployed with greater flexibility and enhanced safety features. Their modularity allows for scalability, making them an ideal solution for powering energy-hungry data centers, which require a constant, high-density supply that intermittent sources like solar and wind cannot guarantee on their own.

"We envision a future where SMRs and micro‑reactors power a significant share of the grid, data centers and transportation," noted Michael Cronan, President and CIO of Nautilus ETFs LLC, SS&C ALPS Advisors' partner on the new fund.

Progress in the SMR space is tangible. NuScale Power’s design became the first SMR to receive design approval from the U.S. Nuclear Regulatory Commission (NRC). Meanwhile, GE Hitachi is working with Ontario Power Generation to deploy its BWRX-300 SMR, with a target completion date of 2028. These developments are transforming SMRs from a theoretical concept into a commercially viable solution for the world's looming power deficit.

A Hybrid Strategy for a Converging Future

The ALPS Nautilus SMR, Nuclear & Technology ETF is not just another nuclear or tech fund. Its structure reflects the symbiotic relationship between the two sectors. The actively managed portfolio provides targeted exposure to the full nuclear lifecycle—from uranium miners to reactor operators and SMR developers—while complementing it with a curated sleeve of AI and technology enablers, explicitly capped at 25% of the portfolio.

This hybrid approach distinguishes SMRF from existing thematic ETFs that typically focus on either nuclear energy or artificial intelligence, but not both in a single, integrated strategy. The fund's objective is to seek both capital appreciation from these high-growth sectors and income.

To achieve this, the fund employs a risk-managed options overlay. This strategy, which often involves selling call options on the fund's holdings, is designed to generate additional income and potentially dampen volatility. While this can enhance risk-adjusted returns, it also introduces complexity and can cap the upside potential if the underlying stocks experience a sharp rally.

Navigating the High-Stakes Frontier

Investing at the intersection of two transformative but volatile technologies is not without significant risk. The SMRF ETF's prospectus and the nature of its underlying themes make it clear that this is a high-stakes proposition.

The fund is classified as "nondiversified," meaning it can invest a larger portion of its assets in a smaller number of companies. This concentration increases its vulnerability to the fortunes—or misfortunes—of a few key players in the nuclear and AI sectors.

The nuclear industry, while resurgent, remains subject to immense regulatory scrutiny, long development timelines, and potential public opposition. SMR technology, though promising, is still in its commercial infancy. Delays in deployment, cost overruns, or technical setbacks for key developers could significantly impact investor returns. Similarly, the AI sector is characterized by intense competition, rapid technological change, and sky-high valuations that can fluctuate dramatically.

The fund's active management and use of derivatives also add another layer of risk. Performance is heavily dependent on the skill of the portfolio managers, and the options overlay, while designed to manage risk, involves its own complexities that may not be suitable for all investors. Potential investors must weigh the compelling "compute + firm power" narrative against the substantial uncertainties inherent in investing on the frontiers of technology and energy.