Rolls-Royce could soon become the UK’s most valuable company, thanks to its bold strategy of powering artificial intelligence (AI) with small modular nuclear reactors (SMRs). CEO Tufan Erginbilgic believes the firm is well-positioned to dominate this emerging trillion-dollar market.
From Jet Engines to Nuclear Innovation
Best known for powering aircraft like the Boeing 787 and Airbus A350, Rolls-Royce is shifting gears. It has signed agreements to develop SMRs for the UK and the Czech Republic. Though still unproven at scale, the technology is expected to become a game-changer, especially in powering energy-hungry AI data centres.
“There is no private company in the world with our nuclear capability,” Erginbilgic told the BBC. “If we’re not the global leader, something went wrong.”
SMRs offer a faster, more cost-effective alternative to traditional nuclear plants. Each unit, estimated at $3 billion, could contribute to the 400 SMRs the world may need by 2050. Tech giants like Google, Microsoft, and Meta are already signing agreements to source power from SMRs in the future.
AI’s Energy Appetite and the SMR Solution
Since the AI boom began in 2022, concerns have grown around its massive energy demands. Rolls-Royce sees SMRs as the answer, offering a clean and scalable energy solution. However, challenges remain — including water use for cooling and a lack of currently functioning SMRs.
Despite these hurdles, Erginbilgic is confident. “We have a massive advantage bringing submarine reactor technology onto land,” he said.
Staying Loyal to the UK
Even with half of its shareholders and customers in the U.S., Rolls-Royce has no plans to shift its listing to New York — a move several UK giants have made in pursuit of higher valuations.
“It’s not in our plan,” said Erginbilgic. “We’ve shown strong performance right here.”
A Turnaround Story: From ‘Burning Platform’ to Market Leader
When Erginbilgic took over in 2023, he described the company as “a burning platform” — deeply in debt with weak returns. Two years later, the transformation is remarkable: profits are expected to top £3 billion, the share price is expected to increase tenfold, and headcount is expected to rise from 43,000 to 45,000.
Industry experts credit the turnaround to his leadership, post-COVID recovery in airline engine demand, and increased defence spending following Russia’s invasion of Ukraine.
Cracking the Narrow-Body Aircraft Market
While dominating the wide-body aircraft engine market, Rolls-Royce now aims to break into the $1.6 trillion narrow-body sector, competing against giants like CFM International. Previous challengers, including Pratt & Whitney, failed spectacularly, but Erginbilgic remains undeterred.
“This isn’t just a business opportunity — it’s the UK’s biggest chance for economic growth,” he said.
Looking Ahead: Britain’s Most Valuable Company?
Rolls-Royce is now ranked fifth on the FTSE 100. But with its expanding nuclear portfolio and AI alignment, Erginbilgic believes it could one day surpass Shell, AstraZeneca, and HSBC.
“We’ve created growth potential in existing and new markets,” he stated. “Yes — we have that potential.”
From aircraft engines to artificial intelligence, Rolls-Royce is charting a bold path forward — one powered by nuclear ambition and backed by a determined CEO who believes the company’s golden age is only beginning.
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