Why Did Big Tech Go Nuclear?

THE STORY SIMPLIFIED

THE GENERATIVE AI BOOM AND ENERGY CONSUMPTION

The rise of artificial intelligence (AI) and other data-intensive technologies has led to a surge in energy demand, with tech giants racing to secure stable power supplies. The need for reliable, continuous energy—known as base-load energy—is at the core of these investments.

• Launch of ChatGPT and AI Race: OpenAI's launch of ChatGPT in November 2022 ignited an AI race, significantly increasing the energy requirements of tech firms.

• Data Center Energy Use: In 2022, data centers consumed around 4% of U.S. electricity, according to the International Energy Agency (IEA). The rapid growth of AI, data processing, and blockchain has pushed this consumption upward.

• Future Energy Needs: The IEA projects data center energy demand to more than double by 2026.

• Grid Capacity Concerns: States across the U.S. are expressing concerns over meeting increased power demands without extensive upgrades to the energy infrastructure — communicating that the grid cannot handle such significant growth in energy demand.

The companies’ demand for stable energy sources and grid’s inability to supply their needs has spurred the search to find their own energy sources.

DISASTERS, THE ANTI-NUCLEAR MOVEMENT, AND A SLOWDOWN

The history of nuclear power is marked by controversy, disasters, and opposition, all of which have influenced its current perception.

• The Anti-Nuclear Movement: Environmental groups and activists have long opposed nuclear power, citing risks associated with radioactive contamination and advocating for safer alternatives.

• Notable Nuclear Disasters:

  • Three Mile Island (1979): A partial meltdown in Pennsylvania led to the release of radioactive materials, intensifying public fears.

  • Chernobyl (1986): The catastrophe in the Soviet Union caused widespread radioactive contamination and approximately 30 immediate deaths.

  • Fukushima Daiichi (2011): The tsunami-triggered disaster in Japan not only heightened domestic concerns but also fuelled worldwide skepticism about the safety of nuclear energy, prompting international debates on nuclear policies and safety standards.

• Global Nuclear Slowdown: Following these incidents, many countries announced plans to phase out nuclear power, with increased regulatory scrutiny driving a decline in new projects and the decommissioning of existing plants.

While these disasters left a legacy of apprehension, the decommissioning trend also created latent energy potential. Many decommissioned plants remain viable for recommissioning, which, although requiring significant investment, would take less time than developing entirely new nuclear projects.

CLIMATE CHANGE AND A ZERO-EMISSIONS ALTERNATIVE

Climate change has emerged as the leading environmental issue in the minds of the public and, as a result, nuclear energy is being reconsidered as a viable path to achieving zero-emission goals.

• IPCC Projections: The Intergovernmental Panel on Climate Change (IPCC) scenarios suggest that limiting global warming requires a substantial increase in nuclear power capacity by 2030.

• Youth Advocacy: In Europe, young activists have called on organizations like Greenpeace (an organization that played a significant role in the anti-nuclear movement) to reconsider their anti-nuclear stance, recognizing nuclear as a potential solution for clean energy.

• Global Commitments: Agreements at international forums, such as COP28, have set ambitious targets for tripling nuclear capacity by 2050.

• Corporate Climate Initiatives: Tech companies, including Amazon, Alphabet, and Microsoft, have made public commitment to achieving net-zero emissions targets. 

The renewed focus on climate change is creating a more favorable environment for nuclear's resurgence, with its ability to provide reliable baseload energy and produce no direct emissions.

BIG TECH’S INVESTMENTS IN NUCLEAR

Amid the booming potential of AI, the urgent challenge of climate change, and growing strains on the traditional energy grid, the world's leading tech companies are turning to nuclear power. Despite its higher costs and lingering public skepticism, it is clear they see it as a reliable, zero-emissions source capable of meeting the massive energy needs of the future. Their moves include:

• Microsoft:

  • Reviving Three Mile Island: Partnering with Constellation Energy to restart a decommissioned reactor at the site of the largest nuclear accident on U.S. soil.

  • Fusion Power Agreement: Microsoft has a deal to buy power from nuclear fusion technology, which differs from currently available nuclear energy technology, from Helion Energy starting in 2028.

• Amazon:

  • Data Center Power Supply: Amazon has entered into an agreement with Talen Energy, securing nuclear power for a Pennsylvania data center.

  • Small Modular Reactor (SMR) Development: The company is collaborating with X-Energy, Energy Northwest, and Dominion Energy on SMR projects in Washington and Virginia, aiming to produce over 600 megawatts in initial phases. They are investing $500M.

• Alphabet:

  • Kairos Power Deal: Alphabet has signed agreements to purchase energy from small nuclear reactors from Kairos Power to support its data center operations.

Big Tech's embrace of nuclear power highlights a bold strategic choice: confronting the need for stable, emission-free energy while grappling with nuclear's troubled history. Despite the availability of cheaper renewables, the pursuit of reliable base-load power and ambitious climate goals is steering companies like Microsoft, Amazon, and Alphabet toward nuclear solutions. As these investments take shape, the tech sector may not only reshape the future of nuclear energy but also redefine the trajectory of global power generation itself.