Faced with a power crunch brought on by ever-growing data centers, tech giants are looking for a nuclear option.
Google and Amazon both announced last week that they’ve cut deals involving the use of small modular reactors (SMRs) to eventually power data centers. In Google’s case, the company agreed to buy power from small reactors slated to be developed by Kairos Power. Amazon said days later it would invest in small reactor startup X-energy and work with two utilities on development plans in Washington and Virginia.
The news is the latest sign of Big Tech’s embrace of nuclear power as the rush to build the data centers needed for generative AI has companies getting creative with energy sources. Last month, Microsoft signed a purchase agreement that will reopen the notorious Three Mile Island nuclear power plant in Pennsylvania, and Amazon and Google both inked other nuclear energy deals this year.
While tech companies have also poured money into renewable energy sources like wind and solar, nuclear has the advantage of providing around-the-clock energy with no carbon emissions, a boon for always-on data centers. But it faces more regulatory hurdles, questions of commercial viability, and potential public pushback.
“Nuclear power is one part of that mix—it can be brought online at scale, and has a decades-long record of providing a reliable source of safe carbon-free energy,” Amazon wrote in its announcement.
The SMRs in question have yet to be approved by the Nuclear Regulatory Commission, meaning that it will likely be years before Google or Amazon’s announcements last week amount to anything concrete, according to Peter Kelly-Detwiler, co-founder of consulting firm NorthBridge Energy Partners.
“Once they do cross that [regulatory] hurdle, then the next question is, ‘Well, how quickly can you build a factory?’ And that’s going to take a while. And then once you build the factory, it’s…a question of scaling,” Kelly-Detwiler said. “The race for nuclear—the earliest that probably gets done is between 2028 and 2030.”
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Biden backing: The Department of Energy says that small nuclear reactors could have the advantage of being cheaper, easier to build, and more flexible location-wise. But there could also be an issue of managing the dangerous waste from so many disparate locations, Kelly-Detwiler said. The nation’s first SMR plant, operated by NuScale and backed by the DOE, ended in a high-profile failure last year after failing to garner enough subscriptions.
The Biden administration has largely been an ally of the nuclear energy industry, promoting the power source as a key part of its “all of the above” energy policy and investing heavily in SMRs, despite the NuScale project. Energy Secretary Jennifer Granholm spoke at the event announcing Amazon’s SMR deals at the company’s second headquarters in Virginia last week, according to the Associated Press.
‘Valley of death’: The “glass half-full” view of the situation is that tech companies’ willingness to win the AI arms race at any cost could provide a much-needed push forward for modular nuclear energy, a tech that might otherwise have a hard time finding commercial investors up for such a long and uncertain ride, Kelly-Detwiler said.
“There’s a valley of death that all these modular nuclear companies have to cross, which is, how do they essentially get from where they are today, to scale and commerciality,” Kelly-Detwiler said. “[Tech giants are] relatively inelastic with respect to power, and therefore, I think we can expect them to do what they can to accelerate this new technology, which is great because modular nuclear is probably something the industry and the world needs to continue down a decarbonization path.”