Amazon, Google and Microsoft are investing in nuclear power

Technology companies are increasingly looking to nuclear power plants to provide the emission-free electricity needed to run artificial intelligence and other businesses.

Microsoft, Google and Amazon have recently struck deals with nuclear power plant operators and developers to fuel the boom in data centers, which provide computing services to businesses large and small. Demand has accelerated because of the big investments these and other tech companies have made in AI, which requires more power than traditional tech businesses like social media, video streaming and web search.

Microsoft has agreed to pay an energy company to revive Pennsylvania's shuttered Three Mile Island nuclear power plant. And this week, Amazon and Google said they are focusing on a new generation of small modular reactors. The technology has yet to be successfully commercialized but energy experts say it could be cheaper and easier to build than the large nuclear reactors the United States has built since the 1950s.

Big tech companies, which previously invested heavily in wind and solar power, are now turning to nuclear power because they want energy that is available around the clock and doesn't emit greenhouse gases. Wind and solar do not contribute to climate change but are not always available without the help of batteries or other forms of energy storage. The biggest tech companies have pledged to power their operations with emissions-free energy by 2030, but those pledges came before the rise of artificial intelligence, which demands even more energy.

“They want to grow all of this in a sustainable way and the best answer right now is nuclear,” said Anish Prabhu, managing director of S&P Global Ratings.

On Monday, Google said it had agreed to buy nuclear power from small modular reactors built by a start-up called Kairos Power, and that it expected the first of them to be operational by 2030. Then Amazon said it on Wednesday. Another start-up, X-Energy, will invest in the development of small modular reactors. Microsoft's deal with Constellation Energy to revive a reactor at Three Mile Island was announced last month.

Mr. Prabhu said the small modular reactor could cost about $1 billion to build and could one day be placed next to a data center.

Tech companies are not alone in championing nuclear power. President Biden recently signed legislation passed by a bipartisan majority in Congress that its authors said would accelerate the development of new nuclear power projects.

The Biden administration sees nuclear power, which now provides about 20 percent of the nation's electricity, as critical to its goal of reducing greenhouse gas emissions. This is a change from the past when many Democrats opposed new nuclear plants due to safety, environmental and economic concerns.

“Reviving America's nuclear sector is key to adding more carbon-free energy to the grid and meeting the needs of our growing economy — from AI and data centers to manufacturing and healthcare,” Energy Secretary Jennifer M. Granholm said in a statement.

Technology industry support of nuclear projects could help revive an energy source that has struggled. With 94 active nuclear power plant reactors, the United States operates more units than any other country, but only two have been built in recent decades. Both units were built at the Vogtle Nuclear Power Plant in Waynesboro, Ga., but ran several billion dollars over budget and were years late.

The two units were part of a much-anticipated “nuclear renaissance” that was projected to result in about two dozen new reactors. But those ambitions have been stymied in large part by fracking problems and a failed nuclear power project in South Carolina.

Tech industry executives say this time will be different, and some have staked their personal fortunes on that belief. Microsoft co-founder Bill Gates has invested more than $1 billion in a start-up called TerraPower, which is working to develop small reactors in partnership with Warren Buffett's utility company PacificCorp.

The idea is that the components of each unit can be small enough to be mass-produced on an assembly line, making them cheaper. Each power plant may start with one or a few reactors, with more added over time.

“The key with nuclear is you have to pick something and build a lot to make it cheaper,” said Rich Powell, head of the Clean Energy Buyers Association, a trade group whose members include major technology companies.

But critics of nuclear power are skeptical. They argue that while the pitches from utilities and tech companies may sound appealing, it doesn't solve the long-standing problems with nuclear power. These problems include the high cost of new reactors, construction delays and the lack of permanent storage sites for spent nuclear fuel.

“Since 1960, the United States has tried to build 250 power reactors,” said Ernie Gundersen, chief engineer at Firewinds Energy Education, a nonprofit that opposes nuclear power. “More than half were canceled before any power was produced. None of the remaining reactors were completed on time and on budget.”

Still, many technology and energy executives say nuclear is essential because renewable sources of electricity like wind, solar and hydro are not reliable enough to meet growing energy demands.

Electricity use has already been increasing in recent years as individuals and businesses turn to battery-powered vehicles, heat pumps and air-conditioners. Now data centers in the tech industry are turbocharging that growth.

Although data centers make up a small percentage of global energy consumption, their share is growing and they tend to be concentrated in certain regions, such as Northern Virginia, where they can strain local grids.

Data centers use electricity to run — and, most critically, cool — computer servers. Power is so important to data centers that the industry talks about the size of a building not based on its square footage but on the amount of megawatts it secures from utilities.

A single rack of servers in a typical data center needs about five to 10 kilowatts to power, but a rack filled with advanced AI computing chips can demand more than 100 kilowatts, Raul Martinek, chief executive of Data Bank, a data center company, said in a recent interview. “From an infrastructure perspective, it's an order of magnitude more intensive,” he said.

Tech giants have ramped up their spending dramatically, in large part to meet the demand and potential they see for AI. The five biggest tech companies, including Alphabet, Microsoft and Amazon, spent $59 billion on capital spending last quarter alone, 63 percent more than a year earlier. . And they signaled to investors that they plan to keep spending.

Amazon spent $650 million this year to buy a data center campus under development that will be directly powered by an existing nuclear power plant in Pennsylvania. In addition to the Three Mile Island deal, Microsoft has agreed to buy electricity from Seattle-area start-up Helion Energy, seeking to build the world's first nuclear fusion power plant by 2028.