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With the demand for power increasing rapidly, tech companies are looking for innovative solutions to meet the demand created by artificial intelligence (AI) and other new technologies. In addition to solar and wind power, several tech companies are investing in nuclear energy projects to power operations. The clear shift in the public perception of nuclear power has once again put the abundant clean energy source on the table as an option, with the U.S. nuclear energy capacity expected to rise significantly over the coming decades.
Around one-third of nuclear power plants are the U.S. are in discussions with tech companies to provide electricity for data centers, according to The Wall Street Journal. Several tech majors have already established deals with nuclear energy companies to deliver the clean energy required to power high-energy-demand new technologies, such as AI.
The global electricity demand is expected to double by 2050, compared to 2020 levels, and there is immense pressure to fill this demand using renewable energy sources. The rapid rise in the use of complex technologies is expected to contribute heavily to this demand increase. The CEO of the U.S. energy firm NextEra Energy, John Ketchum, recently stated that the demand for renewable energy will likely triple over the next seven years, in line with the growing use of AI.
Several tech companies are racing to develop bigger, more powerful AI models to offer users. However, larger models will require more electricity to power them, which could restrict their rollout unless energy companies can provide the clean power needed to run giant data centers in the coming years. In April, the chief marketing officer of the chip design firm Arm, Ami Badani, said that data centers currently make up around 2 percent of global energy consumption. However, with the growth of AI technology, Badani expects energy consumption from the tech industry could contribute around a quarter of all power use in the U.S. by 2030. Badini emphasized, “ChatGPT requires 15 times more energy than a traditional web search.”
Tech companies have invested heavily in wind and solar energy to power their data centers and are now looking for alternative clean power supplies. In 2021, Sam Altman, the CEO of OpenAI, invested $375 in the nuclear fusion startup Helion Energy. Last year, Microsoft signed a deal to purchase power from Helion beginning in 2028. Altman also chairs the nuclear fission company Oklo. Oklo is planning to build a massive network of small-scale nuclear reactors in rural southeastern Idaho to provide power to data centers as the electricity demand grows. It is also planning to build two commercial plants in southern Ohio.
However, getting some of these nuclear projects off the ground is no easy feat. Oklo has found it difficult to get the backing of nuclear regulators. In 2022, the Federal Nuclear Regulatory Commission (FERC), which oversees commercial nuclear power plants, rejected the firm’s application for the design of its Idaho “Aurora” project, for not providing enough safety information.
Oklo’s CEO and co-founder Jacob DeWitte explained, “You’ve got new physics, you have to use new models. You have to do all sorts of stuff that’s different than what they’re used to.” DeWitte said that Oklo is now working with regulators to provide the information needed to get the go-ahead. If approved, the project would cover 13,000 square feet and include a 15 MW nuclear fission reactor.
In addition to the red tape from regulators, many utilities are opposing new nuclear projects due to their anticipated impact on the grid. Some data centers require 1 GW or more of power, which is around the total capacity of a nuclear reactor in the U.S. PJM Interconnection, the biggest grid operator in the U.S., recently warned that power supply and demand is tightening as the development of new generation is falling behind demand. However, some tech companies are proposing to connect data centers directly to nuclear plants, also known as co-location, to reduce the burden on the grid.
However, several U.S. utilities oppose co-location plans. In March, Amazon Web Services purchased a data center powered by the Susquehanna nuclear plant in Pennsylvania from Talen Energy for $650 million. The deal allows for the direct sale of power from the plant to the AWS data center, but utilities, including American Electric Power and Exelon, have filed complaints at the FERC about this arrangement. The utilities worry that if more agreements like this go through, there will be less clean energy available to power the grid as U.S. electricity demand increases. The complaint to the FERC stated, “This will harm existing customers.”
As the energy demand to power the data centers needed to run innovative new technologies increases rapidly, tech companies are investing heavily in nuclear energy firms to provide clean energy. However, regulatory restrictions and opposition from utilities are limiting the development of new projects. The FERC will play a significant role in the future of nuclear power in the U.S. and could ultimately decide whether or not tech companies will be granted access to clean nuclear power for their data centers.
