Soaring AI energy needs are fueling a nuclear power renaissance for reliable, carbon-free electricity. Innovative Small Modular Reactors (SMRs) may offer faster, safer, and more scalable nuclear energy solutions. Government support and rising tech demand could unlock major investment opportunities in the nuclear sector. Nuclear provides reliable 24/7 baseload power, a key advantage over intermittent renewable sources for AI.

The Unlikely Alliance: Why AI's Thirst for Power Could Revive Nuclear Energy

Let’s be honest, for the last few decades, nuclear power has been the awkward uncle at the energy family dinner. Everyone knows it’s powerful, but nobody really wants to talk about it, haunted by memories of past mishaps and the eternal question of what to do with the leftovers. Yet, in a twist of fate I find rather amusing, the futuristic world of artificial intelligence might just be the thing that brings nuclear back into the fold.

The Sobering Reality of Our Digital Future

The cheerleaders for AI, bless their optimistic hearts, tend to gloss over one rather inconvenient truth. This digital revolution is fantastically, almost comically, greedy for electricity. Training a single AI model can guzzle as much power as a few hundred homes use in a year. Now, picture thousands of these things running at once, all while you and I are asking ChatGPT to write a poem about a badger.

The numbers are getting silly. Data centres are on a path that could see them tripling their electricity consumption by 2030. We’re talking about individual corporate campuses needing more power than a small country. This isn't a blip, it's the new baseline. And while I’m all for a field of solar panels glistening in the sun, they have a rather stubborn habit of not working at night. Wind turbines are equally temperamental. AI, however, never sleeps. It needs a constant, unwavering flow of power, 24/7.

Enter the Unfashionable Hero

This is where our awkward uncle, nuclear power, strolls back into the room. It’s the only carbon-free source that can provide what’s known as ‘baseload’ power. Think of it as the reliable, unglamorous engine that runs constantly in the background. A typical nuclear plant operates at over 90% capacity. For wind and solar, you’re looking at figures closer to 35% and 25% respectively.

For a data centre, a power cut isn’t just an annoyance, it’s a catastrophe. It can wipe out weeks of work and millions of pounds in computational costs. To me, the partnership makes perfect, practical sense. AI needs unwavering reliability, and nuclear power is nothing if not relentlessly consistent. It’s not a romantic pairing, it’s a marriage of pure necessity.

Not Your Grandfather's Nuclear Plant

The good news is that the industry hasn't been sitting still. The real game-changer could be something called Small Modular Reactors, or SMRs. Forget the colossal, decade-long construction projects of the past. The idea here is to build smaller, standardised reactors in a factory, like a very complex piece of flat-pack furniture, and then ship them to where they’re needed.

This approach promises to make deployment faster, cheaper, and potentially safer. Companies like NuScale Power are already getting these designs through the thicket of regulatory approval. It’s a potential solution that could be scaled to power a single data centre campus, which is precisely what the tech giants are looking for. This evolving landscape, which includes established players like NextEra Energy and Public Service Enterprise Group, presents a fascinating area for consideration. For those looking to understand the companies at the forefront, collections like the Nuclear Energy Boom offer a way to track these key players.

Of course, let’s not get carried away. Investing in this sector is not without its risks. The shadow of public opinion is long, and regulatory hurdles can still feel like wading through treacle. Cost overruns have been a hallmark of the industry for a reason. But the fundamental problem remains. AI’s hunger for power is immense and growing, and when you look at the options, nuclear energy keeps presenting itself as a logical, if complicated, part of the answer.

Deep Dive

Market & Opportunity

• Data center electricity consumption is projected to triple by 2030 from its current level of 1% of global usage, driven by AI adoption.
• Nuclear power provides carbon-free, 24/7 baseload power, which is critical for AI systems that require constant, uninterrupted electricity.
• Nuclear plants operate at capacity factors above 90%, significantly higher than wind at 35% or solar at 25%.
• Small Modular Reactors (SMRs) offer a way to reduce construction time and costs compared to traditional nuclear plants.

Key Companies

• NuScale Power Corp (SMR): Develops factory-built Small Modular Reactors (SMRs) designed for faster and more cost-effective deployment. The technology has received regulatory approval and targets the growing demand for reliable, clean energy.
• NextEra Energy, Inc. (NEE): Operates one of the largest nuclear fleets in the U.S. while also investing in renewable energy, positioning it to supply both baseload power for AI and clean energy for corporate sustainability goals.
• Public Service Enterprise Group Inc. (PEG): Owns and operates nuclear facilities in New Jersey, a strategic location near major data center hubs, making it a key power supplier for expanding AI infrastructure.

Primary Risk Factors

• Regulatory approval processes for nuclear reactors remain lengthy and complex.
• Public perception challenges related to past accidents and nuclear waste disposal persist.
• The industry has a history of construction delays and cost overruns.
• Small Modular Reactors have not yet been proven at a commercial scale.
• Competition from abundant natural gas and improving battery storage technology.

Growth Catalysts

• The significant and growing energy demand from the AI industry.
• Government support, including funding from the US Department of Energy and provisions in the CHIPS Act for domestic nuclear fuel.
• The development of Small Modular Reactors (SMRs) which can be deployed faster and scaled to meet specific demands, such as for data centers.
• Broader electrification trends, including electric vehicle adoption and industrial processes, are set to increase overall electricity demand.
• National energy security goals that favor domestic power sources like nuclear energy.