Big Tech Goes Nuclear: Amazon, Microsoft, and Google Lead the Energy Transition for AI

In just the past month, mega deals have emerged that are shaking perceptions of the energy transition and the use of traditional nuclear power. Amazon, Microsoft, and Google have made bold moves to embrace nuclear energy, aiming to support the insatiable energy demands required to power AI data centres into the latter part of this decade and beyond. These unprecedented initiatives by the tech giants mark a significant shift in how the industry plans to meet the escalating needs of artificial intelligence.

Amazon recently announced three pivotal deals for the development of nuclear power reactors, including leading a $500 million funding round for reactor developer X-energy. 

"Big tech has well and truly gone nuclear,"

highlighting the industry's commitment to sustainable and reliable energy sources. In March, Amazon agreed to pay Talen Energy $650 million for land adjacent to Talen’s Susquehanna nuclear plant in Pennsylvania, aiming to build a new data centre and entering into a power purchase agreement with Talen.

Google has forged a groundbreaking partnership with Kairos Power, signing the world's first corporate agreement to purchase energy from multiple small modular reactors (SMRs). 

"Overall, this deal will enable up to 500 MW of new 24/7 carbon-free power to US electricity grids," 

Google stated, emphasising the necessity of new electricity sources to support burgeoning AI technologies. The first reactor is expected to be operational by 2030, with additional deployments through 2035.

Microsoft is not far behind, entering a 20-year power purchase agreement with Constellation Energy to revive Unit 1 of the Three Mile Island nuclear power plant, inactive since 2019. Slated to reopen by 2028 pending regulatory approval, the facility will be renamed the Crane Clean Energy Center. This move aims to power Microsoft's AI-focused data centers and aligns with its commitment to decarbonizing the power grid.

These strategic initiatives are timely. Data centres, the backbone of the digital economy, are projected to double their energy consumption between 2023 and 2028, reaching 857 terawatt-hours. Despite the decline of nuclear power in recent years—with 12 U.S. reactors closing since 2012 and the share of nuclear electricity dropping to 18.2% in 2022—the tech industry's investments signal a robust revival.

Outlook: Navigating Controversy and Planning for the Future

While the decision to embrace nuclear energy is not without controversy, it demonstrates a commitment to forward planning and meeting the colossal energy demands of AI-driven data centres. The adoption of nuclear power by tech giants is likely to prompt increased regulation and oversight, ensuring that safety and environmental concerns are adequately addressed.

The question remains: How will other leading AI entities like OpenAI, led by Sam Altman, and entrepreneurs like Elon Musk respond? As they intend to escalate investments in mega data centres and expand GPU deployments, their energy strategies will be pivotal. Furthermore, countries outside of the USA and Europe face the pressing challenge of contending with the surging energy demand from AI. Developing nations, in particular, will need to innovate and possibly explore alternative energy sources to keep pace with global AI advancements.