The surge in demand for energy driven by artificial intelligence (AI) is ushering in a new era of nuclear power, particularly with small modular reactors (SMRs). Tech companies are in need of dependable and eco-friendly energy sources for their expansive data center projects, and they are increasingly turning to nuclear options. As the U.S. electrical grid grapples with rising demand, many businesses are pursuing contracts with SMR suppliers. While these ventures may not fully meet the clean energy targets set for 2030, they represent a significant step towards greener energy solutions in the long run.
Recently, Meta announced partnerships with two startups specializing in SMRs. The company is prepaying for energy from up to eight of TerraPower’s Natrium reactors and up to 16 of Oklo’s Aurora reactors, positioning itself as a major buyer of nuclear power. Other tech giants like Amazon and Google have also struck deals with companies such as NuScale, X-energy, and Kairos Power. However, these agreements are expected to deliver under four gigawatts of power by 2030—only a fraction of the estimated 20 gigawatts that U.S. data centers may require.
One major challenge is the time it takes to build nuclear reactors, even smaller ones. In Canada, for example, GE Hitachi anticipates that its first small reactor will be completed eight years after construction begins. Russia’s Rosatom has successfully constructed ten SMRs and is working on another ten, yet their timelines still span four to five years.
Over the last fifty years, more than fifty small reactors, each capable of producing up to 500 megawatts, have been built. Typically, these reactors take around eight years to complete. In contrast, larger reactors have benefitted from accumulated experience, often being operational after seven years of construction.
However, investing in SMRs still has its merits. Their smaller size equates to lesser financing requirements and simpler integration into the existing power grid compared to larger reactors. As SMRs become more commonplace and utilize more factory-produced components, it’s anticipated that several small reactors can be constructed simultaneously, allowing for cost-effective scaling.
The real advantage of nuclear energy lies in its scalability, particularly when compared with other renewable energy sources. France demonstrated this in the 1980s by completing over fifty reactors in just fifteen years, adding significant electricity capacity even though construction times were lengthier than for wind or solar farms.
For major tech companies that consume energy on a scale comparable to small nations, nuclear energy presents a viable avenue for generating substantial amounts of clean electricity. While wind and solar energy can be quicker to install, coordinating the simultaneous deployment of many projects can be complicated. Nuclear energy also has the edge in avoiding challenges related to land use, transmission, and grid connections.
If these tech companies aim to meet their clean energy requirements by 2030, they will also need to maximize the potential of their current nuclear assets. This is evident in Microsoft’s efforts to restart the Three Mile Island reactor and Meta’s support for extending the life of reactors in Illinois and Ohio. Enhancing the performance of existing reactors and resuming operations of those that have been recently decommissioned could add the equivalent of over 40 gigawatts of nuclear power globally.
While the potential of SMRs is considerable, their true impact will likely become noticeable in a decade, rather than in just a few years.