The artificial intelligence revolution is driving an unprecedented surge in energy demand, particularly in data centers. Major tech companies like Google and Amazon are increasingly turning to nuclear power to meet these escalating needs. Google recently announced it will buy electricity made with reactors developed by Kairos Power, a company specializing in advanced small modular reactors (SMRs).
These SMRs promise enhanced safety features and operational flexibility in a compact design. Kairos Power’s innovative Aurora powerhouses are scheduled to begin operations in 2027. Meanwhile, Amazon is investing approximately $500 million in the X-energy Reactor Company and has agreed to buy power produced by their reactors due to be built in Washington State.
X-energy is pioneering the design of SMRs that are intended to be assembled from prefabricated pieces, making them smaller, cheaper, safer, and faster to deploy than conventional reactors. Last month, Google also stated it would buy power from a utility company planning to restart a decommissioned 835-megawatt reactor in Pennsylvania. Building nuclear power stations is financially risky, often plagued by complex permit procedures, construction delays, and cost overruns.
Betting on unproven technologies like SMRs is even riskier. However, the deals with Google and Amazon could provide a significant push for companies like Kairos and X-energy.
Tech companies betting on SMRs
“The biggest value is a vote of confidence, and of course it comes with some cash,” says Jacopo Buongiorno, a nuclear engineer who heads the Center for Advanced Nuclear Energy Systems at MIT. Such announcements could help these startups raise extra funding and achieve commercial success. Despite the potential benefits, skeptics are raising questions about the viability of SMRs.
No commercial SMR has been built in the US yet, and there are only three operational worldwide – two in Russia and one in China. “Nobody knows how long they’re going to take to build,” said David Schlissel, an analyst at the Institute for Energy Economics and Financial Analysis. “Nobody knows how expensive they’re going to be to build.
We don’t know how effective they will be in addressing climate change because it may take them 10 to 15 years to build them.”
There are also challenges beyond cost, including a lengthy regulatory approval process and the issue of nuclear waste. While SMRs will produce less waste due to their smaller size, a study found they could still increase the volume of nuclear waste “by factors of 2 to 30.”
Despite these hurdles, the Department of Energy says nuclear energy is critical to transitioning the country away from fossil fuels. The agency has set aside $900 million in funding for SMR development, estimating that the US will need 700-900 GW of additional clean power generation to reach net-zero emissions by 2050.
As the AI revolution continues to drive energy demand, the debate over advanced nuclear reactors is likely to intensify. While SMRs face significant challenges, the backing of tech giants like Google and Amazon could be a game-changer for this emerging industry.
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