Press Excerpts

Data centers use electricity to run — and, most critically, cool — computer servers. Power is so crucial for data centers that the industry talks about the size of a building based not on its square footage but on the amount of megawatts it has secured from utilities. Microsoft, Google and Amazon have recently struck deals with operators and developers of nuclear power plants to fuel the boom in data centers. The demand has accelerated because of the big investments these and other tech companies have made in A.I., which requires far more power than more conventional technology businesses like social media, video streaming and web searches. It takes about five to 10 kilowatts to power a single rack of servers in a typical data center, but a rack filled with advanced A.I. computing chips can demand well over 100 kilowatts, Raul Martynek, the chief executive of DataBank, a data center company, said in a recent interview. “From an infrastructure perspective, it is an order of magnitude more intensive,” he said. (1)

Microsoft, Google and Amazon have recently struck deals with operators of nuclear and natural gas-fueled power plants.

Addition Jan. 21, 2025 – Trump Announces $100 Billion A.I. Initiative

President Trump on Tuesday announced a joint venture between OpenAI, SoftBank and Oracle to create at least $100 billion in computing infrastructure to power artificial intelligence. The venture, called Stargate, adds to tech companies’ significant investments in U.S. data centers, huge buildings full of servers that provide computing power. Stargate could eventually invest as much as $500 billion over four years.

During a news briefing Tuesday, Mr. Trump said he would remove barriers to allow for the creation of more data centers. He said he would make “emergency declarations” to allow Stargate to generate its own electricity, without providing details. (11)

Microsoft – Constellation

Pennsylvania’s dormant Three Mile Island nuclear plant (owned by Constellation) would be brought back to life to feed the voracious energy needs of Microsoft under an unprecedented deal in which the tech giant would buy 100 percent of its power for 20 years. If approved by regulators, Three Mile Island would provide Microsoft with the energy equivalent it takes to power 800,000 homes, or 835 megawatts. Never before has a U.S. nuclear plant come back into service after being decommissioned, and never before has all of a single commercial nuclear power plant’s output been allocated to a single customer. (2)

Google – Kairos Power

Google has signed a deal to use small nuclear reactors to generate the vast amounts of energy needed to power its artificial intelligence (AI) data centres. The company says the agreement with Kairos Power will see it start using the first reactor this decade and bring more online by 2035. The companies did not give any details about how much the deal is worth or where the plants will be built. The plans still have to be approved by the US Nuclear Regulatory Commission as well as local agencies before they are allowed to proceed. Last year, US regulators gave California-based Kairos Power the first permit in 50 years to build a new type of nuclear reactor. In July, the company started construction of a demonstration reactor in Tennessee. (3)

Google’s plan is, in some ways, the most radical departure — both from the current structure of the energy grid and from traditional means of generating nuclear power. The internet search giant announced on Monday that it has partnered with Kairos Power to fund the construction of up to seven small-scale nuclear reactors that, across several locations, would combine to generate 500 megawatts of power. The small modular reactors (SMRs) are a new, and largely untested, technology. Unlike sprawling nuclear plants, SMRs are compact, requiring much less infrastructure to keep them operational and safe. “The smaller size and modular design can reduce construction timelines, allow deployment in more places, and make the final project delivery more predictable,” Google and Kairos said in a press release. The companies said they intend to have the first of the SMRs online by 2030, with the rest to follow by 2035. (4)

Amazon – Talen Energy

Amazon’s plan, by contrast, does not require either new technology or the resurrection of an older nuclear facility. The data center that the company purchased from Talen Energy is located on the same site as the fully operational Susquehanna nuclear plant in Salem, Pennsylvania, and draws power directly from it. (4)

Oracle

Oracle’s chairman and chief technology officer Larry Ellison told investors that the electricity demand from artificial intelligence is becoming so “crazy” that Oracle is looking to secure power from next-generation nuclear technology, Ellison told investors. “Let me say something that’s going to sound really bizarre,” Ellison told analysts. “Well, you’d probably say, well, he says bizarre things all the time, so why is he announcing this one. It must be really bizarre.” Oracle is designing a data center that will require more than a gigawatt of electricity, the company’s chairman said. The data center would be powered by three small nuclear reactors, he added.(5)

Addition Jan. 28, 2025 – Exxon and Chevron

The artificial intelligence boom has turbocharged demand for electricity, and everyone who is anyone in the U.S. energy industry wants a piece of the action.

The latest entrant is Chevron, the country’s second-largest oil and gas company, which sees opportunity in building natural gas-fueled power plants that will feed energy directly to data centers. Chevron is working with Engine No. 1, a San Francisco-based investment firm. The companies say they have ordered critical. Chevron and Engine No. 1 said they have reserved seven gas turbines from GE Vernova, one of the companies created by the breakup of General Electric. The equipment is set to be delivered beginning in 2026. In this case, the plants would be located alongside the data centers they power. Just last month, Exxon said that it, too, wanted to get into the business of selling electricity to data centers. Like Exxon, the partners expect their facilities would not be connected to the electric grid to start, so the plants can get up and running more quickly. It can take years for grid managers to approve connection requests. (10)

Biden has called for a tripling of U.S. nuclear power capacity

Technology companies are not alone in championing nuclear energy. President Biden recently signed a law passed by bipartisan majorities in Congress that its authors say will hasten the development of new nuclear energy projects. (1)

Biden has called for a tripling of U.S. nuclear power capacity to fuel energy demand that is accelerating in part due to expansion of power-hungry technologies like artificial intelligence and cloud computing. The Biden administration said it closed a $1.52 billion loan to resurrect the Palisades nuclear plant in Michigan, which would take two years to reopen. (4)

Nuclear Power Operators and Stock Market

Stock returns for the year, including dividends (6)

The S&P 500 stock index, 22 percent.

• Constellation Energy, 121 percent. Shares of Constellation Energy, the biggest nuclear plant operator in the United States, surged when it signed a deal on Sept. 20 to supply Microsoft’s burgeoning A.I. data centers with energy from the Three Mile Island nuclear power plant near Harrisburg, Pa.
• Vistra, 208 percent.Vistra says it, too, has been in talks with several A.I. operators.
• Talen Energy, 185 percent.Talen agreed to sell Amazon large quantities of electricity from the Susquehanna Steam Electric Station — a nuclear plant near Berwick, Pa., in which the utility has a 90 percent ownership stake

Other utilities have gotten a boost from A.I., too, but generally not as spectacularly as these companies.

Addition November 2, 2024

The facilities’ demand for electricity to power and cool computers can drive up the price local utilities pay for energy and require significant improvements to electric grid transmission systems. As a result, costs have already begun going up for customers— or are about to in the near future, according to utility planning documents and energy industry analysts. Some regulators are concerned that the tech companies aren’t paying their fair share, while leaving customers from homeowners to small businesses on the hook. (…) The Biden administration met with data center industry leaders and regulators this year as part of an AI task force. White House spokesperson Robyn Patterson said officials “made clear to tech and utility companies that the cost of building the necessary infrastructure should not fall on American taxpayers or small businesses.”(9)

Note of the Author

• One among many reasons why Europe is lagging behind the U.S. in power-hungry technologies like artificial intelligence and cloud computing is the gap in gas and electricity prices. “Gas retail and wholesale prices are currently between three to five times the prices in the US, while historically, prices in the EU have been two to three times higher than those in the US. Electricity retail prices – specifically those for industrial sectors – are currently two to three times those in the US and China. Historically, retail electricity prices in the EU have been up to 80% higher than those in the US while moving around the same level as in China.” (7)
• Regarding Small Modular Reactors (SMR), the European Industrial Alliance on SMRs was launched in February 2024. Its primary goal is to accelerate the development, demonstration and deployment of concrete SMR projects in Europe in the early 2030s. (8)

(1) Hungry for Energy, Amazon, Google and Microsoft Turn to Nuclear Power, New York Times, October 16, 2024

(2) Microsoft deal would reopen Three Mile Island nuclear plant to power AI, Washington Post, September 20, 2024

(3) Google turns to nuclear to power A.I. data centres, BBC, October 15, 2024

(4) Tech firms increasingly look to nuclear power for data center, Voice of America English News,  October 15, 2024

(5) Oracle is designing a data center that would be powered by three small nuclear reactors, CNBC, September 10, 2024

(6) Nuclear Power Is the New A.I. Trade. What Could Possibly Go Wrong? New York Times, September 27,2024

(7) Mario Draghi Report, The future of European competitiveness, September 2024, Part B, section 1, Chapter 1

(8) European Commission, February 9, 2024

(9) As data centers for AI strain the power grid, bills rise for everyday customers, The Washington Post, November 2, 2024

(10) Chevron Joins Race to Generate Power for A.I., New York Times Jan. 28, 2025

(11) Trump Announces $100 Billion A.I. Initiative, New York Times Jan. 21, 2025