Data Centers Embracing Nuclear, SMRs for AI Needs

Core Insights - Global electricity demand is increasing due to factors such as electrification, electric vehicle adoption, air conditioning usage, and AI-related data centers. The International Energy Agency (IEA) projects that U.S. data centers will account for approximately half of the power demand increase by 2030, with a 130% rise in power consumption from 2024 to 2030 [1][2]. Group 1: Data Center Power Consumption - A typical hyperscale AI data center consumes as much electricity annually as 100,000 homes, highlighting the significant energy requirements of large data centers [2]. - The IEA anticipates that U.S. data center power consumption will increase by 130% from 2024 to 2030, driven largely by the growth of AI and data processing needs [1][3]. Group 2: Nuclear Power Agreements - Meta and Microsoft have signed 20-year power purchase agreements (PPAs) with Constellation Energy for nuclear power, with Meta sourcing power from the Clinton Clean Energy Center starting in June 2027, and Microsoft supporting the reopening of the Three Mile Island Unit 1 [3]. - Talen Energy's Susquehanna nuclear plant has a new PPA with Amazon Web Services for 1,920 MW through 2042, indicating strong demand for reliable power sources [4]. Group 3: Small Modular Reactors (SMRs) - SMRs, defined as nuclear reactors generating up to 300 MW, are gaining interest due to their smaller footprint, shorter build time, and lower costs. They can be deployed at retired coal plants and are expected to be operational by 2030 or later [4][5]. - Google has entered a PPA for 50 MW from Kairos Power's Hermes 2 plant, scheduled to begin operations in 2030, as part of a larger agreement for 500 MW by 2035 [4][5]. Group 4: Investment Opportunities - Companies such as Constellation Energy, Talen Energy, Dominion, Vistra, Rolls-Royce, and Oklo are part of the Range Nuclear Renaissance Index, which focuses on utilities and technology developers benefiting from nuclear energy demand [6]. - Alphabet, Meta, Amazon, and Microsoft are included in the ROBO Global Artificial Intelligence Index, which encompasses over 50 companies in AI infrastructure and applications [6]. Group 5: Conclusion - Nuclear power is positioned as a reliable and clean energy solution for data centers, with existing plants meeting immediate power needs and SMRs offering long-term potential [7].