Amazon goes nuclear for data centers

The shift is part of a broader trend among tech companies like Google and Microsoft, exploring nuclear energy solutions to support their energy needs amid AI-driven power demand increases.
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Amazon has taken a bold step into nuclear power technology by signing three agreements to develop small modular reactors (SMRs) to address the growing demand for electricity from its data centres. In collaboration with X-Energy, Amazon will fund a feasibility study for an SMR project near a Northwest Energy site in Washington state, positioning itself as a critical player in the shift toward new energy sources. The deal allows Amazon to purchase power from four SMR modules, with the potential for up to eight additional modules capable of producing enough energy to power more than 770,000 homes.

SMRs are gaining attention due to their promise of lower construction costs, with components built in factories rather than onsite. However, critics argue they may still need to be more expensive to reach the necessary economies of scale. Despite this, nuclear power, which produces no greenhouse gas emissions and provides stable, well-paying jobs, is supported by both political parties in the US. However, US SMRs still need to be built, and concerns remain about radioactive waste and regulatory approvals.

The power demand, driven by the rise of AI and data centres, has prompted tech companies like Amazon, Microsoft, and Google to explore nuclear energy solutions. US power consumption from data centres is projected to triple by 2030, requiring nearly 47 gigawatts of new generation capacity. In response, Amazon and X-Energy aim to bring 5 gigawatts of SMR power online by 2039, marking the most significant planned commercial deployment of SMRs in the US.

In addition to the Washington project, Amazon has signed an agreement with Dominion Energy to develop an SMR near its power station in Virginia, where energy demand is expected to surge by 85% over the next 15 years. US Senator Mark Warner praised the move, emphasising that SMR development could finally take off in the US, which has yet to build one.

Why does it matter?

The push for nuclear energy isn’t unique to Amazon. Earlier this week, Google announced a partnership with Kairos Power to deploy an SMR by 2030, while Microsoft has struck a deal to help revive a unit of the Three Mile Island plant. As tech giants increasingly look to nuclear power, the future of energy in the US could hinge on the successful deployment of SMRs.