Google’s Bold Move: Betting on Nuclear Power to Fuel AI Growth

Google has finalized its inaugural corporate agreement to acquire energy from several small modular reactors (SMRs) to fulfill the power requirements of its AI systems, a pivotal move as AI enterprises transition towards nuclear energy.

In a recent blog update, Google revealed its partnership with Kairos Power to harness nuclear energy, with plans to activate the first SMR by 2030, and additional reactors projected by 2035.

“The grid requires new electricity sources to sustain AI technologies that are driving significant scientific progress, enhancing services for businesses and consumers, and boosting national competitiveness and economic growth,” the company stated in the update.

This initiative aligns with the trend among other major technology firms, which are also investigating nuclear energy as a viable sustainable energy option.

In March, Amazon made headlines with its acquisition of a nuclear-powered data center from Talen Energy. Just last month, Microsoft and Constellation Energy took significant steps to revive a unit at Pennsylvania’s Three Mile Island plant, known for being the site of the most severe nuclear accident in the United States.

Additionally, Oklo, a startup pioneering nuclear fission with backing from OpenAI’s Sam Altman, is making strides toward its first Small Modular Reactor (SMR), which it aims to complete by 2027. Altman is also a supporter of Helion Energy, a company focused on fusion power.

According to reports, data center energy consumption is expected to rise dramatically in the upcoming years, primarily due to the demands of cloud computing and artificial intelligence. Particularly, AI-driven energy use is forecasted to increase by approximately 45% each year over the next three years.

“For the past four to five years, organizations have been actively seeking ways to cut energy use or transition to alternative energy sources,” stated Suseel Menon, a practice director at Everest Group. “Recently, Microsoft ceased its plans to construct underwater data centers. With a global emphasis on sustainability, many companies have also turned their attention to renewable energy sources for their operations. However, while these sources are sustainable, they can be susceptible to disruptions caused by natural events.”

The impressive energy output produced by nuclear reactors is leading hyperscale providers to consider nuclear power in order to satisfy the increasing demands of AI workloads, as noted by Rajiv Ranjan, associate research director at IDC.

“Nuclear power offers a stable energy source, in contrast to renewables that are reliant on factors such as sunlight or wind,” Ranjan explained. “Even though nuclear power is costlier, its fuel efficiency significantly surpasses that of traditional energy sources.”

Google intends to secure up to 500 megawatts of power from six to seven Kairos reactors, marking an initial commitment that analysts believe might only fulfill a small portion of the company’s energy requirements in the 2030s.

“Choosing Kairos Power is significant, as this startup in the small modular reactor (SMR) sector has not yet introduced its reactors,” stated Hyoun Park, CEO and chief analyst at Amalgam Insights. “This presents Google with a chance to collaboratively develop solutions over the next six years, with reactor deployments anticipated for 2030.”

It wouldn’t be astonishing if Google investigates ways to integrate these modular reactors with data center infrastructure, creating a cohesive unit that could be replicated over time, Park added.

Small Modular Reactors (SMRs) are being advocated as a sustainable energy alternative, in line with the net-zero carbon targets that many leading tech companies have committed to pursuing.

Nevertheless, the advantages remain largely speculative, according to Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research, who emphasizes that businesses must address the issue of nuclear waste disposal — a concern that will intensify as SMRs are implemented for data center operations.

“There are also significant and practical factors regarding the sites for these SMRs, alongside safety and continuous maintenance challenges,” Gogia mentioned. “At the very least, the deployment and operation of these SMRs require strict regulation and regular oversight, as many uncertainties persist.”

Overseeing and controlling nuclear energy presents a major hurdle, especially as several states in the US have placed bans or limitations on the establishment of new nuclear facilities. According to Park, “Tech firms might leverage their significant financial power to alleviate the permitting and regulatory obstacles tied to nuclear energy.” He elaborated that this could involve backing legislation designed to enable tech companies to construct modular reactors for their own commercial interests, potentially under conditions that traditional utility companies would find challenging to comply with in the privatized utility landscape of the United States.

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