Three tech companies eyeing nuclear power for AI energy
Big Tech's demand to power AI energy is driving a resurgence of nuclear power after years of skepticism. Nuclear power offers more reliable and cleaner energy for AI.
After two high-profile disasters -- the 1979 meltdown at Three Mile Island in Pennsylvania and the 1986 explosion at the Chernobyl nuclear power plant in Ukraine -- U.S. public opinion soured on nuclear power.
But now, driven by necessity, nuclear power is on the rise. Skyrocketing interest in generative AI and AI in general means data centers require more power, which is already in short supply. Unable to acquire sufficient power through traditional means, top cloud service providers (CSPs) are considering nuclear energy.
Why is Big Tech using nuclear power for AI energy?
Data centers are already consuming vast amounts of power, roughly 2% to 3% of the total U.S. power consumption, and are estimated to reach 9% by 2030, according to the Electric Power Research Institute's study. The country's aging power grid struggles in certain instances to meet demand now.
Despite this, chipmakers continue to increase their power usage, because in computing, power equals performance. Recently, entrepreneur Elon Musk built an AI cluster of 100,000 Nvidia graphics processing units, each drawing 1,000 watts of power. That's 100 megawatts (mW) in all, enough to power a small city. The data center, based in Memphis, Tenn., has a capacity of 150 mW.
Expect further strain on the nation's power infrastructure as AI advances. A Goldman Sachs report calculated a 160% increase in data center power consumption by 2030, noting some large data centers already consume 100 mW, the equivalent of powering 80,000 homes for an hour.
Of course, the tech industry operates much faster than the power industry, which is usually government-run and slow to react. Rather than leave their data centers' fate in power utilities' hands, the largest CSPs are going into business for themselves and providing their own power.
There are challenges with this decision. After all, AWS, Microsoft and Google are experts at running data centers, not power utilities. These data center operators know this and are partnering with public utilities to fund and operate the plants.
Concerns about producing clean electricity and carbon-neutral power continue to drive the nuclear power revival. Major CSPs build their data centers near wind farms, solar farms and hydroelectric sources, but they simply cannot keep up with the demands of AI processing.
Nuclear power is considered carbon neutral, though nuclear waste is generated. Scientific breakthroughs in nuclear fusion promise both to increase power and reduce waste. And nuclear power is a more consistent, reliable source of energy than solar or wind; both are susceptible to the whims of nature.
Finally, the nuclear power plants proposed for data centers are much smaller than the major plants used to power whole cities. Instead, these facilities are reportedly one-third the size of a standard nuclear power plant as well as modular and expandable.
Three companies considering using nuclear power for AI processing
No one uses nuclear power in data centers yet. The following top three CSPs, still in the talking and R&D stages, must wait a few years until their planned nuclear plants are up and running.
Microsoft
Microsoft agreed with Constellation Energy to restart the decommissioned nuclear reactor at Three Mile Island in Pennsylvania. The company committed to funding the $1.6 billion investment required to bring the reactor back into operation and signed a 20-year power purchase agreement.
This 835-megawatt reactor is expected back online by 2028. The facility's lingering negative image garnered extensive news coverage and considerable handwringing over the plan's and plant's safety and suitability.
Google, an Alphabet Inc. subsidiary, partnered with Kairos Power to fund the construction of up to seven small modular reactors (SMRs), with the first planned for 2030 and the rest appearing by 2035. These reactors are expected to generate 500 megawatts of power across multiple locations.
Amazon Web Services
AWS's aggressive approach to adopting nuclear power features three significant projects already underway.
The first is a $650 million data center campus next to the Susquehanna Steam Electric Station, a nuclear power plant in Pennsylvania. Amazon paid $350 million upfront to Talen Energy for the site, but its plans are in doubt following the Federal Energy Regulatory Commission's recent ruling against the two companies.
The second project involves a partnership with Dominion Energy, Virginia's energy utility, to explore the development of a small modular nuclear reactor near its North Anna nuclear facility.
The third is a partnership in Amazon's home state of Washington with Energy Northwest to finance the development, licensing and construction of in-state SMRs. Energy Northwest plans to build, own and operate the reactors, which will support Amazon's local facilities.
In general, even small-scale nuclear power plants require massive investment supported by the largest CSPs, eliminating heavyweight private companies such as Walmart, Bank of America or Boeing from considering such a build. On the contrary, many large businesses are trying to shrink their data center footprint and have already moved to the cloud.
Who are the emerging energy companies in SMR tech?
The handful of businesses seeking to build small modular reactors are well-known individuals and businesses in the tech world. The following companies are among the leaders in SMR development:
- Constellation Energy. Microsoft's energy partner, Constellation operates the largest fleet of nuclear reactors in the U.S. and is one of the leading providers and advocates of clean energy. It owns and operates a fleet of nuclear, hydro, wind and solar generation facilities, and it produces about 10% of the carbon-free energy in the United States.
- Oklo. Oklo is a startup backed by Sam Altman, CEO of OpenAI. It was formed to build SMRs for data centers in rural places such as Idaho and Ohio. It still must navigate regulatory hurdles but plans to have the Idaho facility online by 2027.
- TerraPower. Founded by Bill Gates, TerraPower is not directly involved in data center operations, but it has potential use there. The company is developing a sodium-cooled fast reactor designed to provide flexible, carbon-free electricity. Its reactors are designed to produce significant amounts of power in a small, modular form.
- NuScale. NuScale Power Corp. develops small modular reactors using light water reactor technology to generate its power. Each reactor module is 9 feet in diameter and 65 feet tall. Modules are designed in the factory, transported to the required site and installed in groups of four, six or 12 modules. Among potential markets, NuScale eyes the powering of data centers and AI facilities.
Andy Patrizio is a technology journalist with almost 30 years' experience covering Silicon Valley who has worked for a variety of publications on staff or as a freelancer, including Network World, InfoWorld, Business Insider, Ars Technica and InformationWeek. He is currently based in southern California.
