ARK • Disrupt

Superconductors are quasi-magical materials that conduct electricity with zero resistance–resistance that typically causes electrical systems to lose energy. However, existing superconductors have not found much commercial success because they require frigidly cold environments around -200°C to operate.

A room temperature superconducting material could enable dramatic performance advances for virtually every electric device, from computer chips to electric motors to power infrastructure. A flurry of new investigations suggest that materials science could be on the threshold of just such a breakthrough.

On July 22, a team of researchers in South Korea and the United States¹ reported that they had achieved superconductivity at room temperature by synthesizing a lead-phosphorus ceramic doped with traces of copper.² At first glance, the claim seemed extraordinary because their materials and the process were simple and unremarkable: with a furnace from Amazon, anyone could produce a kilogram of the new material with $24 worth of phosphorus, $1.30 worth of lead, and $0.20 worth of copper.³

In the last few weeks, other scientists, amateurs, and entrepreneurs have validated some of their results, with additional efforts underway.⁴ As of this writing, betting markets place the odds of complete replication at ~40%, while independent evidence suggests that this new class of materials could crack the code of superconducting at room temperature.⁵

Interestingly, 37 years ago, scientists discovered a new superconducting material that operated at a record 30 Kelvin (-243°C) and, once purified, at 58 Kelvin (-215°C). One year later in 1987, a similar material superconducted at 93 Kelvin (-115°C), and the following year, another at 110 Kelvin (-163°C). Within two years, the so-called “critical temperature” of that new class of materials had more than tripled and, by 1994, quadrupled.⁶

The latest breakthrough in new material science could follow a similar trajectory now that research and development engines are kicking into high gear.

[1] Quantum Energy Research Centre, Inc., South Korea; CT Basic Research Lab, South Korea; Department of Physics, College of William & Mary, USA; and Hanyang University, South Korea.
[2] Lee, S. et al. 2023. “Superconductor Pb10−xCux(PO4)6O showing levitation at room temperature and atmospheric pressure and mechanism.” arXiv:2307.12037 https://arxiv.org/abs/2307.12037
[3] At market prices for each ingredient as of 8/3/23. The “SH Scientific Laboratory Muffle Furnace” commercially available to the public for <$2,000 is an example of a technology that should be able to accommodate the temperature ranges suggested in the methodology section of Lee, S. et al. 2023, cited above.
[4] Sanada, E. 2023. “LK-99: The Live Online Race for a Room-Temperature Superconductor (Summary).” Eirifu. https://eirifu.wordpress.com/2023/07/30/lk-99-superconductor-summary/#sbtable
[5] Quantum Observer. 2023. “Will the LK-99 room temp, ambient pressure superconductivity pre-print replicate before 2025?” Manifold. https://manifold.markets/QuantumObserver/will-the-lk99-room-temp-ambient-pre
[6] Bussman-Holder, A. and Keller, H. 2019. “High-temperature superconductors: underlying physics and applications.” Zeitschrift für Naturforschung. Doi: 10.1515/znb-2019-0103. https://arxiv.org/pdf/1911.02303.pdf. 

In 2022, The World Nuclear Industry Status Report noted that in the past 14 years the U.S. Nuclear Levelized Cost of Energy (LCOE)⁷ had increased by ~36%—in contrast to the progress in solar and wind which have declined ~90% and ~72% in cost, respectively, as shown below.⁸ Explaining the difference in cost trajectories is stagnation in the nuclear industry, with aging plants that are increasingly expensive to operate.

Source: Chart first published in The World Nuclear Industry Status Report, 2022, p. 280, based on primary data sourced from Lazard Estimates, 2021. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.

The International Energy Agency has identified nuclear as vital to achieving net zero emissions by 2050,⁹ highlighting the importance of nuclear cost competitiveness.¹⁰ In our view, the emergence of Small Modular Reactors (SMRs) could contribute importantly to that goal.

With a smaller footprint than traditional nuclear plants, SMRs are assembled in factories and can be positioned closer to residential areas.¹¹ Their size and modularity shorten construction timelines and could lead to steep cost declines as unit volumes increase.

The U.S. Department of Energy's Advanced Reactor Development Program (ARDP) aims to expedite advanced reactor development through cost-sharing incentives and has provided ~$2.6B in funding to date.¹² The Agency selected the X-energy Xe-100¹³ and TerraPower Natrium Reactor¹⁴ for deployment in 2027 and 2028, respectively. Meanwhile, companies like NuScale, Westinghouse, and Sam Altman’s Oklo also are investing heavily in SMRs. In our view, the rising cost of traditional nuclear energy highlights the need for SMRs. With government support, targeted deployment dates, and significant investment from various companies, SMRs could revitalize the US nuclear industry and increase the odds of achieving net zero emissions by 2050.

[7] Levelized Cost of Energy (LCOE) is calculated by measuring lifetime costs of a given source of energy and dividing this amount by energy production.
[8] Mycle Schneider Consulting Project, Paris. 2022. “The World Nuclear Industry Status Report. 2022.” https://www.worldnuclearreport.org/-World-Nuclear-Industry-Status-Report-2022-.html. 
[9] International Energy Agency. 2023. “Net Zero by 2050.” IEA. https://www.iea.org/reports/net-zero-by-2050.
[10] We note that Georgia Power's "Vogtle" Nuclear Plant, the first US. nuclear reactor built from scratch in over 30 years, began supplying the Georgia grid this week. See McCormick, M. 2023. “First new US nuclear reactor in three decades may be among the last.” Financial Times. https://www.ft.com/content/5d8e0c6c-59c9-4b40-806f-604889dd5fb6.  
[11] International Atomic Energy Agency. 2023. “What are Small Modular Reactors (SMRs)?” IAEA. https://www.iaea.org/newscenter/news/what-are-small-modular-reactors-smrs. See also X-energy 2023. “TRISO-X Fuel.” X-energy. https://x-energy.com/fuel/triso-x.
[12] Office of Clean Energy Demonstrations. 2023. “Advanced Reactor Demonstration Projects.” Department of Energy. https://www.energy.gov/oced/advanced-reactor-demonstration-projects.
[13] X-energy. 2023. “Xe-100: The Most Advanced Small Modular Reactor. X-energy.”https://x-energy.com/reactors/xe-100.
[14] TerraPower. 2023. “NATRIUM™ REACTOR AND INTEGRATED ENERGY STORAGE.” https://www.terrapower.com/our-work/natriumpower/.

Last week, CoreWeave, a former crypto mining company turned GPU-focused cloud service provider, secured $2.3 billion in debt financing led by Magnetar Capital, Blackstone, and other firms. CoreWeave will use the funds to expand its infrastructure—primarily AI accelerators supplied by one of its strategic investors, Nvidia. Interestingly, the AI accelerators will serve as collateral for the loan.

After a $421 million Series B round valuing the company at ~$2 billion earlier this year, the latest capital raise—more than five times higher—highlights the race to secure as much AI-compute as possible in anticipation of an explosion in demand for AI-powered products and services following the viral success of ChatGPT. Some believe that Nvidia has allocated supply to CoreWeave to diversify the landscape of cloud service providers away from Amazon, Microsoft, and Google, all of whom are working on in-house accelerators to compete with Nvidia.