Big Tech turns to nuclear energy to power AI boom 

Major technology companies are increasingly turning to nuclear energy as they attempt to keep up with the vast energy demands of artificial intelligence (AI) without derailing their highly publicized environmental goals. 

Google announced Monday that it had inked a deal with Kairos Power to purchase nuclear energy from a fleet of small modular reactors, a kind of advanced nuclear reactor yet to be seen in the U.S. 

The tech giant was not shy about the driver behind the deal. 

“The grid needs new electricity sources to support AI technologies that are powering major scientific advances, improving services for businesses and customers, and driving national competitiveness and economic growth,” Michael Terrell, Google’s senior director of energy and climate, wrote in a blog post. 

“Nuclear solutions offer a clean, round-the-clock power source that can help us reliably meet electricity demands with carbon-free energy every hour of every day,” he added. 

Just two days later, Amazon announced it had signed a series of deals to invest in advanced nuclear reactors, including an agreement with Northwest Energy to build four small modular reactors in Washington. 

The e-commerce and cloud computing giant also reached an agreement with Dominion Energy in Virginia to explore the development of small modular reactors and dedicated a $500 million financing round for X-energy, an advanced nuclear reactor and fuel company. 

The deals from Amazon and Google are unique in that they tap into next-generation nuclear technology. However, they follow a flurry of other nuclear agreements struck by large tech firms over the past year. 

Nuclear energy operator Constellation Energy announced last month that it had reached a deal with Microsoft to reopen Three Mile Island to power the tech giant’s data centers for two decades starting in 2028. 

The facility was the site of a partial nuclear meltdown in 1979, the worst accident in the history of U.S. commercial nuclear generation. It was retired five years ago due to declining revenues. 

Earlier this year, Amazon Web Services (AWS) also purchased a data center campus for $650 million that will receive power directly from an adjacent nuclear plant. 

AI requires significant amounts of energy, with a single ChatGPT inquiry requiring nearly 10 times the energy of a typical Google search. Other forms of generative AI, like image generation, require even more energy. 

The increased energy demands of AI have resulted in greater emissions for Big Tech companies at a time when they are attempting to fulfill promises to become carbon-neutral or negative. 

Nuclear energy represents a particularly reliable form of carbon-free energy, said Katy Huff, who led the Energy Department Office of Nuclear Energy from 2022-24 and now serves as an associate professor at the University of Illinois at Urbana-Champaign.  

Nuclear energy has a capacity factor of 93.1 percent, meaning it runs at maximum power just over 93 percent of the time, according to data from the Energy Information Administration.  

It is nearly twice as reliable as coal and natural gas and three times as reliable as wind and solar — though renewable fuel reliability can be improved with batteries. 

“That kind of reliability is required when your data center needs to be up every second of every minute of every day for 365 days a year and not be affected by things like clouds moving past the sun or complex wind patterns that cause a lull,” Huff said. 

Matt Crozat, executive director of strategy and policy at the Nuclear Energy Institute, a trade group that represents the industry, said that nuclear energy is a particularly good fit for tech companies because one plant can produce a lot of power at a time, which is needed to keep AI running. 

“It takes a lot of energy to run big data centers, and so being able to think in bigger chunks of carbon-free power, like a nuclear station, begins to make sense. If these were very small or niche applications, you might not have the same need,” Crozat said.  

Advanced reactors, like the ones Google and Amazon are funding, could be key to balancing the country’s commitment to reaching net-zero emissions with rising energy demands, Energy Secretary Jennifer Granholm said Wednesday. 

"Small modular reactors are a huge piece of how we're going to solve this puzzle of getting to 100 percent clean electricity by 2035, while responding to all of the demand that will be created,” she said at an event hosted by Amazon. 

The Department of Energy estimates that the U.S. will need 700 to 900 gigawatts of additional clean energy to reach net-zero emissions and that the country’s nuclear capacity has the potential to grow 200 gigawatts by 2050. 

“I think Big Tech has an interesting role to kick off the order books of deployments that are needed to see that growth happen, to scale up the build-out,” Huff added. 

Despite its apparent benefits, nuclear energy has had a rocky history. Between the partial meltdown at Three Mile Island in 1979 and the disaster at Chernobyl in 1986, nuclear power largely fell out of favor in the 1990s. 

It began to see a resurgence in the early 2000s, but the 2011 accident at the Fukushima Daiichi nuclear plant in Japan following a massive earthquake and tsunami again scrambled momentum. 

Several countries opted to phase out nuclear power in the following years, while others declined to build new nuclear power plants. 

However, amid growing concerns about climate change and expanding energy demands, nuclear power may be having another moment. 

“Nuclear energy is really emerging back on the scene in a big way and in part because we're now talking about a world where we're going to see load growth, and we haven't seen that in over a decade, about two decades actually,” said Valerie Karplus, associate director of the Scott Institute for Energy Innovation at Carnegie Mellon University. 

Electricity demand is expected to grow 15 to 20 percent over the next decade, according to the Energy Department. This load growth is being driven by data center development, increasing electrification and efforts to reshore manufacturing. 

It’s not just the tech sector that is investing in nuclear energy. Last year, chemical giant Dow announced an agreement with X-energy to build a reactor to power one of its facilities.  

Overall, industry players expressed optimism about the power source's prospects going forward.

“I definitely think that this is the beginning of a trend,” said Ken Petersen, former president of the American Nuclear Society.  

“It's being driven by the tech companies and the large demand that they are putting onto the grid ... that's the primary driver, and that's going to enable a lot of other opportunities to come along,” he said.  

The Inflation Reduction Act, Democrats’ sweeping climate, tax and health care bill, also helped, with both tax credits that are specific to nuclear power production and tax credits that generally apply to low-carbon energy sources.  

Though Republicans have targeted the law’s incentives for climate-friendly energy sources, some in the GOP want to preserve incentives for nuclear power. 

In addition, a bipartisan bill that passed this summer is also expected to bolster the industry by speeding up nuclear reactor licensing timelines and cutting fees.  

In the wake of Google’s announcement earlier this week, the White House touted its policies for “spurring billions in private sector investment” into nuclear. 

“President Biden and Vice President Harris made a big bet on America’s energy potential, and this Administration’s investments to jumpstart our nuclear future are paying off in a big way,” White House national climate adviser Ali Zaidi said in a statement. 

“All across the country, we are seeing a muscular resurgence in American energy innovation — from bringing back previously shuttered nuclear plants to bringing online new technologies and new reactors,” Zaidi added.