Nuclear Power’s Renaissance in Data Center Energy

Artificial intelligence is reshaping the global economy, but it has created a massive logistical problem: an insatiable demand for electricity. As tech giants like Microsoft, Google, and Amazon race to build faster AI models, they are turning to a surprising partner to keep the lights on. The nuclear power industry is experiencing a revival, driven specifically by the development of Small Modular Reactors (SMRs).

The Energy Crisis Behind the AI Boom

The computational power required to train and run large language models is staggering. A standard Google search uses roughly 0.3 watt-hours of electricity. By comparison, a single query on ChatGPT consumes about 2.9 watt-hours. This ten-fold increase implies that as AI integrates into daily software, the power grid faces unprecedented stress.

Data centers currently consume about 1% to 1.5% of global electricity usage. The International Energy Agency projects this could double by 2026. This presents a conflict for Big Tech. These companies have pledged to reach net-zero carbon emissions, yet they need reliable, 24⁄7 power that wind and solar cannot always provide. Solar panels do not generate power at night, and wind turbines rely on weather patterns. Batteries can store renewable energy, but not at the scale required to run gigawatt-class data centers for extended periods.

This reality has forced Silicon Valley to look toward nuclear energy, specifically “firm” power that generates electricity continuously without carbon emissions.

The Shift to Small Modular Reactors (SMRs)

Traditional nuclear power plants are massive infrastructure projects that take over a decade to build and cost billions of dollars. The recent completion of Plant Vogtle in Georgia, for example, arrived years late and billions over budget. Tech companies cannot wait that long.

This is where Small Modular Reactors (SMRs) enter the picture. SMRs are advanced nuclear reactors with a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors.

Key advantages of SMRs for data centers include:

  • Factory Fabrication: Unlike traditional plants built on-site, SMR components are built in factories and shipped to the location for assembly. This standardizes construction and reduces timelines.
  • Scalability: A data center can start with one module and add more as its energy needs grow.
  • Siting Flexibility: Because they are smaller and feature advanced safety systems (often “passive” safety systems that require no human intervention to shut down), they can be located closer to population centers or directly adjacent to data centers.

Major Deals Shaping the Industry

In late 2023 and throughout 2024, the theoretical interest in nuclear power turned into concrete financial commitments. The biggest names in technology are now signing long-term agreements with nuclear providers.

Microsoft and the Return of Three Mile Island

In one of the most symbolic moves in recent energy history, Microsoft signed a 20-year power purchase agreement with Constellation Energy. This deal will trigger the restart of the Three Mile Island Unit 1 reactor in Pennsylvania. The reactor, which was shut down in 2019 for economic reasons, will be renamed the Crane Clean Energy Center.

Microsoft is effectively purchasing 100% of the plant’s output to offset the energy usage of its data centers in the PJM interconnection region. Constellation Energy plans to invest approximately $1.6 billion to refurbish the plant, targeting a restart by 2028.

Google and Kairos Power

Google took a different approach by betting on new technology rather than restarting old plants. In October 2024, Google signed a corporate agreement to purchase nuclear energy from multiple SMRs developed by Kairos Power.

Kairos uses a molten-salt cooling design rather than the traditional water-cooled method. This allows the reactor to operate at low pressure, making the design safer and potentially cheaper. Google aims to bring the first reactor online by 2030, with additional deployments through 2035. The deal covers up to 500 megawatts of power, enough to supply a mid-sized city or a massive AI campus.

Amazon’s Multi-Front Strategy

Amazon Web Services (AWS) is aggressively pursuing nuclear energy on three fronts:

  1. X-energy Investment: Amazon anchored a $500 million investment round in X-energy, a developer of high-temperature gas-cooled reactors.
  2. Washington State: AWS is working with Energy Northwest to develop four advanced SMRs in Washington, aiming for 320 megawatts of capacity initially.
  3. Virginia: Amazon signed an agreement with Dominion Energy to explore the development of an SMR project near the existing North Anna nuclear station. This is strategic, as Northern Virginia is the “data center capital of the world,” handling a significant portion of global internet traffic.

Oracle’s Gigawatt Ambitions

Oracle Chairman Larry Ellison recently announced that the company is designing a data center that will require over one gigawatt of power. To support this, Oracle has obtained building permits for three SMRs. While specific partners were not named, the scale of this project highlights that nuclear power is moving from a fringe idea to a core business requirement for cloud providers.

The Regulatory and Economic Reality

While the momentum is strong, the path forward is not without obstacles. The Nuclear Regulatory Commission (NRC) in the United States has extremely strict safety standards. Approving a new reactor design can take years and cost hundreds of millions of dollars in fees and research.

Economic viability remains a hurdle. NuScale Power, the first company to get an SMR design approved by the NRC, had to cancel its flagship project in Utah in 2023. The projected cost of power rose from $58 per megawatt-hour to $89 per megawatt-hour, causing local utilities to withdraw.

However, the involvement of “hyperscalers” like Microsoft and Amazon changes the math. Unlike municipal utilities that must keep rates low for residents, tech giants have massive cash reserves and a desperate need for reliability. They are willing to pay a premium for clean, firm power, effectively subsidizing the early adoption phase of SMR technology.

Frequently Asked Questions

What is the difference between an SMR and a traditional nuclear plant? An SMR produces less than 300 megawatts of electricity, whereas traditional plants often produce over 1,000 megawatts. SMRs are built in factories and assembled on-site, making them potentially faster and cheaper to build than custom-built traditional plants.

Is nuclear energy considered “green” for tech companies? Yes. While nuclear power produces radioactive waste, it generates zero carbon dioxide during operation. For companies like Google and Microsoft that have “24⁄7 carbon-free energy” goals, nuclear is considered a vital green energy source because it works when the sun isn’t shining.

When will these nuclear-powered data centers be operational? The timeline varies. Microsoft’s restart of Three Mile Island is targeted for 2028. Google’s SMRs with Kairos Power are scheduled to begin coming online in 2030. It will likely be the early 2030s before SMR-powered data centers become common.

Why don’t data centers just use batteries? Current battery technology is excellent for short-term storage (hours), but it is prohibitively expensive for long-duration backup (days or weeks). If a region experiences a week of low wind and cloud cover, batteries would run out. Nuclear provides a constant baseload of power regardless of weather.