AI training and inference aren’t just power hungry—they’re ravenous. A single NVIDIA H100 server can pull 10-20 kW. Compare that to standard computing at 1-2 kW. Data centres already consume a significant chunk of US electricity, and between 2024 and 2028, that share may triple from 4.4% to 12%.
This article is part of our comprehensive guide on understanding AI data centre energy consumption and sustainability challenges, where we explore how the industry is responding to unprecedented power demands.
The grid can’t keep up. Key markets like Virginia are hitting connection limits. And here’s where it gets messy: tech companies made carbon-neutral commitments before AI exploded their power requirements.
So they’re taking action on three fronts. Microsoft is restarting Three Mile Island. Google is backing Small Modular Reactor development through Kairos Power. Amazon has thrown $500M+ at multiple nuclear partnerships. All while maintaining renewable energy PPA portfolios.
Nuclear offers something renewables can’t: baseload power that runs 24/7 without carbon emissions. No batteries needed. No weather dependency. Just continuous power for data centres that can’t tolerate interruptions.
The timelines are uncertain—2027 to 2039 deployment windows with all the regulatory and construction risks nuclear projects bring. The costs aren’t fully known. But the investments are happening because the alternative is either continued fossil fuel backup or constrained AI expansion.
If you’re planning infrastructure or evaluating cloud providers, understanding these power strategies matters. They’ll influence data centre availability, costs, and where new capacity gets built.
Why Are Tech Companies Investing in Nuclear Power for AI Data Centres?
AI workloads need power that doesn’t stop—ever. A generative AI training cluster consumes seven or eight times more energy than typical computing. You can’t just spin down GPU clusters when the wind stops blowing.
The combination of infrastructure constraints and grid stress is driving tech giants to pursue alternative energy sources that can deliver reliable power without waiting years for grid interconnection approvals.
Natural gas provides that baseload power right now. But it produces emissions, putting carbon-neutral commitments at risk.
Microsoft, Google, Amazon, and Meta have all pledged net-zero carbon emissions within the next decade. But Microsoft’s indirect emissions increased 26% from their 2020 baseline in FY24.
Solar and wind are intermittent. Data centres aren’t. Battery storage can cover hours, maybe a day. Multi-day weather events? That’s where the economics break down.
Nuclear runs continuously. No intermittency. No storage costs. No carbon emissions. That’s why soaring power consumption is delaying coal plant closures—there simply aren’t enough renewable sources.
The interconnection queue now runs about five years. If you want guaranteed power for a new data centre, waiting isn’t viable.
Nuclear provides 24/7 carbon-free energy without grid dependency. That’s the value proposition tech companies are paying billions to secure.
What Are Small Modular Reactors and How Do They Differ from Traditional Nuclear Plants?
Traditional nuclear plants produce over 1,000 MW from custom-built facilities that take 5-10 years to construct on-site. SMRs produce between 5 and 300 megawatts per module and get built in factories.
Factory fabrication changes everything. Components get manufactured in controlled environments, shipped as standardised modules, and assembled on-site. Construction time drops to 24-36 months.
You can scale incrementally. Start with a single module. Add more as demand grows.
Safety systems are passive—they rely on gravity and convection. X-energy’s Xe-100 uses TRISO fuel that physically cannot melt even at temperatures exceeding 1,600°C.
The trade-off: smaller reactor cores are less efficient. Only a couple modular reactors have come online, despite more than 80 commercial SMR designs currently being developed.
But SMRs enable co-located, behind-the-meter generation. You don’t need grid transmission. You don’t wait years for interconnection approval. For data centres in markets where grid capacity is maxed out, that independence is worth the efficiency penalty.
How Do Microsoft, Google, and Amazon’s Nuclear Energy Strategies Compare?
Microsoft went for speed. They signed a 20-year agreement with Constellation Energy to restart Three Mile Island Unit 1, securing 837 megawatts by 2028. The reported $1.6 billion to upgrade Three Mile Island is substantially cheaper than building from scratch.
Google is pioneering SMR technology. They made history in October 2024 with the world’s first corporate SMR purchase agreement, partnering with Kairos Power to deploy 500 megawatts. First unit online by 2030, full deployment by 2035.
Then Google doubled down. They signed a 25-year agreement with NextEra Energy to restart Iowa’s Duane Arnold nuclear plant—America’s first nuclear facility resurrection. The 615 MW plant comes back online in 2029.
Amazon is hedging everything. AWS leads with 5 gigawatts of SMR capacity by 2039 through a $500 million investment in X-energy.
The strategic differences are clear. Microsoft prioritises speed with restarts. Google pioneers new technology with Kairos while hedging with Duane Arnold. Amazon diversifies across multiple SMR vendors. All three maintain substantial renewable PPA portfolios alongside nuclear—these aren’t either/or strategies.
What Is Baseload Power and Why Do Data Centres Need It?
Baseload power is continuous electrical generation that operates 24/7 without interruption. Data centres need it because 99.99%+ uptime requirements don’t accommodate variable supply.
You can’t pause a multi-week AI training job because the wind stopped.
Solar generates only during daylight. Wind varies unpredictably. Battery energy storage systems cost $115 per kWh plus installation. Batteries alone would cost over $5 billion for a five GW facility. And batteries cover hours to maybe a day—multi-day weather events still require backup.
Nuclear reactors operate continuously at consistent output for 18-24 month cycles without emissions. That’s why nuclear energy is well matched to data centre demand.
“24/7 carbon-free energy” is emerging as a gold standard. Google is pioneering this commitment—procuring clean energy every hour of every day. It’s more demanding than annual renewable credit matching.
How Do Nuclear Plant Restarts Compare to New SMR Construction?
No mothballed nuclear plant has ever been successfully restarted in US history. Microsoft’s Three Mile Island and Google’s Duane Arnold deals are breaking new ground.
Restarts deliver power faster and cheaper than new construction. Timeline is 2-4 years versus 5-10+ years for SMRs.
But restart opportunities are limited—perhaps as few as a handful. You need plants that shut down recently for economic reasons, not safety issues.
SMRs offer different advantages. You can scale incrementally—add modules as demand grows. Technology is newer with advanced safety features.
Cost comparison is complex. Restarts have lower absolute costs but are one-time opportunities. Wood Mackenzie forecasts SMR costs falling to $120 per megawatt-hour by 2030 as manufacturers achieve learning rates.
The most effective approach? Do both. Google is pursuing Duane Arnold restart for near-term capacity and Kairos SMRs for long-term scaling.
What Are Power Purchase Agreements and How Do Tech Companies Use Them?
A Power Purchase Agreement is a long-term contract—typically 10-25 years—where you commit to purchasing electricity from a specific project at predetermined prices. It’s how tech companies secure dedicated capacity and achieve cost predictability.
The big four—Amazon, Microsoft, Meta, and Google—are the largest purchasers of corporate renewable energy PPAs, having contracted over 50 GW.
PPAs enable project financing. Microsoft’s Three Mile Island restart gets funded because Microsoft committed to buying all the power it produces for 20 years.
Co-location agreements combine PPAs with behind-the-meter generation. SMRs enable grid independence, allowing data centres to operate without competing with local communities or waiting years for transmission upgrades. For organisations looking to implement renewable energy solutions into their energy strategy, PPAs provide a proven framework for securing dedicated capacity.
Economic benefits: price certainty, hedge against grid power volatility, renewable energy credit generation. Risks include technology deployment delays and regulatory uncertainties.
What Is 24/7 Carbon-Free Energy and Why Is It More Demanding Than Annual Renewable Matching?
Traditional carbon accounting uses annual matching. You purchase renewable credits equal to total consumption over a year. Net-zero on paper. But that masks reality—you’re still consuming fossil fuel power when renewables aren’t generating.
24/7 carbon-free energy requires zero-carbon electricity supply every hour of every day. It reveals the baseload gap that solar and wind cannot fill without massive storage.
Nuclear provides 24/7 generation without storage investment. It’s the only proven carbon-free baseload technology at scale. If you’re serious about hourly matching, you need baseload generation.
When your data centre is drawing power at 3 AM on a cloudy, windless night, what’s generating that electricity? Annual matching says it doesn’t matter as long as yearly totals balance. 24/7 CFE says it must be carbon-free in that moment.
What Are the Water Consumption Concerns for Nuclear-Powered Data Centres?
Nuclear power addresses carbon emissions but introduces a different environmental constraint: water consumption. Both nuclear reactors and data centres require substantial cooling, and combined facilities compound these demands.
Large data centres can consume up to 5 million gallons per day. Hyperscale data centres alone are expected to consume between 16 billion and 33 billion gallons annually by 2028.
Add nuclear reactors and you’ve got siting constraints. You must locate near abundant water sources—rivers, lakes, coastlines. That limits where co-located nuclear data centres can be built.
Technology can reduce consumption. Closed-loop cooling systems can reduce freshwater use by up to 70%. But “reduce” isn’t “eliminate.”
The trade-off is explicit: water consumption versus carbon emissions. Nuclear-powered data centres address climate goals but face environmental constraints around water.
When Will These Nuclear Solutions Actually Deliver Power?
Microsoft’s Three Mile Island targets 2028. Google’s Duane Arnold aims for 2029. Google’s Kairos SMRs are scheduled for first one by 2030, full 500 MW by 2035. Amazon’s X-energy partnerships span the 2030s.
All these timelines face risk factors. NRC licensing delays are common. First-of-kind projects typically face schedule overruns.
The question is whether AI demand growth will exceed nuclear deployment pace. SoftBank, OpenAI, Oracle, and MGX intend to spend $500 billion in the next four years on new data centres in the US.
The 2028-2035 window is when we’ll know if these nuclear strategies deliver or if AI expansion continues relying on fossil backup. For a complete overview of how energy demands are reshaping AI infrastructure and the sustainability challenges the industry faces, see our comprehensive guide on AI data centre energy demands and sustainability context.
FAQ Section
How much does it cost to build a Small Modular Reactor for a data centre?
Industry analysts suggest SMRs could range from $5,000-$8,000 per kilowatt of capacity, making a 300 MW installation potentially $1.5-2.4 billion. Wood Mackenzie forecasts SMR costs falling to $120 per megawatt-hour by 2030 as manufacturers achieve learning rates of 5-10% per doubling of capacity.
Is nuclear power safe for data centres located near populated areas?
Modern nuclear safety standards, passive safety systems in SMR designs, and regulatory oversight aim to minimise risk. SMRs incorporate passive safety features that rely on gravity and convection rather than pumps and operator intervention. Three Mile Island Unit 1 operated safely until economic shutdown in 2019 and will undergo modern safety upgrades during refurbishment.
Can renewable energy plus battery storage provide 24/7 power instead of nuclear?
Theoretically yes. Practically, the economics don’t work at data centre scale. Battery storage faces prohibitive costs and technical limitations for continuous multi-day coverage. A data centre running partially on solar or wind would still need enough power to run with no renewable generation available at all.
How do these nuclear strategies affect smaller tech companies without hyperscaler resources?
You won’t deploy your own nuclear reactor. But you’ll experience indirect effects through grid power pricing and availability. Capacity market prices increased from $28.92/megawatt-day in 2024/2025 delivery year to $269.92/MW-day in 2025/2026. That affects what you pay for colocation or cloud services. Understanding these infrastructure bottlenecks helps you plan around cost increases and capacity constraints.
What happens if the grid can’t support all the planned AI data centres?
Grid constraints are already forcing innovation. Co-located generation—nuclear and renewables—avoids grid dependency. Behind-the-meter solutions eliminate interconnection queue waits. Some planned data centres will face delays or relocation. Saturated markets like Virginia are hitting limits.
Why aren’t tech companies just using more renewable energy instead of nuclear?
They are. The big four have established substantial renewable PPA portfolios. But there simply aren’t enough renewable sources to serve both hyperscalers and existing users. Nuclear addresses what renewables plus storage cannot economically solve at scale—true 24/7 carbon-free energy.
Which SMR technology is more advanced: Kairos Power or X-energy?
Both are pre-commercial with different technical approaches. Neither has commercial operating reactors yet. Kairos uses molten fluoride salt cooling—a novel design requiring more development. X-energy’s Xe-100 uses pebble-bed reactors—a more established concept with Chinese precedent. X-energy has moved further through NRC design review process.
How does the Three Mile Island restart address historical safety concerns?
The restart involves Unit 1, which operated safely until economic shutdown in 2019, not Unit 2 which experienced the 1979 partial meltdown. Unit 1 has different containment and safety systems with decades of safe operation history.
What role do state regulations play in nuclear data centre development?
State utility commissions regulate behind-the-meter generation and grid interconnection. Environmental agencies oversee water use and discharge permits. Nuclear-friendly states—Pennsylvania, Tennessee, Washington—are attracting investments.
Can these nuclear projects scale to meet exponential AI demand growth?
Nuclear provides incremental capacity but faces deployment pace limits. Restarts are one-time opportunities—perhaps as few as a handful. SMRs require years per deployment even with modular approach. If AI demand growth significantly exceeds projections, nuclear alone cannot scale fast enough.
What are the export control implications for US nuclear technology leadership?
US nuclear technology faces export controls that could limit international deployment. Chinese SMR programmes advance without such restrictions. China’s Linglong One became the world’s first operational commercial land-based SMR in 2023. US hyperscalers drive domestic nuclear innovation, but international AI infrastructure may rely on Chinese or Russian SMR providers.
How do Power Purchase Agreements protect tech companies from energy price volatility?
PPAs establish fixed prices for 10-25 year terms, hedging against grid electricity price fluctuations. Microsoft signed a 20-year deal for Three Mile Island power. Google signed a 25-year agreement for Duane Arnold. Those contracts provide financial predictability for long-term infrastructure planning.
