Big tech goes nuclear 

Google has announced it’s inked a deal with Kairos Power to buy small modular reactors (SMRs) to help power the tech giant’s investments in data centres and AI.

Google says it chose SMRs due to, well, their small size and modular nature, which in turn can “reduce construction timelines, allow deployment in more places, and make the final project delivery more predictable”. They’re shooting to have the first reactor online by 2030, with the remaining five or six then completed by 2035.

Of course, Google isn’t the only tech giant with a sudden thirst for nuclear energy: 

• Last month, Microsoft announced a 20-year power procurement deal that’ll see the reopening of Three Mile Island (the site of America’s worst nuclear accident)
• In March, Amazon bought a nuclear-powered data centre for $650M
• Just yesterday (Wednesday), Amazon backed that up by signing three new deals to help build several new SMRs across the US, and
• Feeling the FOMO, Apple is now dropping hints it might follow suit, recently adding nuclear to the list of energy sources it considers “clean electricity”’. 

So, what’s going on? Three big long-term trends come to mind: 

1. Data centres

Data centres are already the backbone of the internet — they’re the world’s ~11,000 football field-sized rooms jammed with servers that store, process, and distribute data. For years, their energy consumption stayed surprisingly stable even as their workloads surged, because engineers kept figuring out ways to boost their efficiency.

But AI seems to be changing all that because it needs way more energy — a ChatGPT query uses 10+ times more energy than a Google search. And while the rate of change is now making total usage difficult to quantify, we’re talking about data centres collectively consuming a Japan or France-worth of electricity in the next couple of years.

And meanwhile, the necessary data infrastructure is so costly, users mostly just rent their processing power from giants like Google and Amazon. So our world is leaning on a handful of firms who are now scrambling to find cheap and secure energy to keep up.

2. Energy transition 

While big tech companies have all variously vowed to cut their emissions, some of those pledges are looking tough — Google’s emissions have actually jumped 50% in the last five years, while Microsoft’s Brad Smith recently acknowledged his firm’s own moonshot target is now tougher than it was in 2020: “the moon has moved”.

But beyond any PR angle, there’s still a healthy dose of longer-term raw self-interest driving their targets: boffins at Morgan Stanley and elsewhere have crunched the numbers and found that, for instance, if AI handles half of Google’s search queries, that’ll add an extra $6B to Google’s power bill each year (and rising). So while long-term clean energy prices collapse, big tech will always want to reap that sweet sweet dividend.

But also, while engineers work to bridge the gaps between renewable energy production and consumption (via innovations in batteries, load shifting, and beyond), there’s still this tension between tech giants racing to expand their AI footprint on the one hand, while racing to reduce their carbon footprint (and costs) on the other.

And they’re seeing nuclear as one way to have it both ways. Which brings us to…

3. Advances in nuclear 

When it comes to people fearing things that might spontaneously explode, nuclear energy has gotta be right up there with the Ford Pinto. That’s why they’re rebranding Three Mile Island as ‘Crane Clean Energy Center’.

But public perceptions are already changing, and SMRs have been a key driver. Per the label, they promise to be: small (some can fit on the back of a truck); modular (you assemble pre-made components, and can plug extras together as needed); and these two features mean they’re also cheaper and quicker to build.

That relative simplicity also theoretically promises better safety: reliance on passive systems and natural phenomena (like gravity) will theoretically mean you don’t need a fallible human or gadget to shut SMRs down.

So, is this nuclear’s moment? Well, folks on the inside clearly think so. Matt Loszask, CEO of Aalo Atomics, told Intrigue, “it’s an exciting time for the industry, and this momentum will accelerate the deployment of advanced reactors, helping to secure the U.S.’s leadership in the global energy transition.”

But we’re not there yet — while there are dozens of projects in development, only three countries have operational SMRs: China, Russia and Japan. And a US project to deploy an SMR in Idaho was cancelled last year after it faced cost blowouts and a lack of subscribers.

INTRIGUE’S TAKE

This is all interesting stuff in part because it’s shiny and new, but it’s important to situate it all in the broader context: this year alone, Google has also made its biggest-ever investment in offshore wind (in the Netherlands), its first onshore wind investment in Italy, more solar purchases in Poland, plus two more green energy deals in Belgium.

And that’s just on a single continent, in a single announcement, and by a single company (Google’s competitors have been busy, too).

So the broader story here is that, to the extent our thirst for energy outstrips our ability (or willingness?) to decarbonise it, the biggest consumers will continue their ‘all of the above’ energy strategy. And so as advancements make more energy sources viable (or at least plausible), we’ll see more of these press releases adding them to the mix.

Also worth noting: 

• The US is the world’s largest producer of nuclear energy — still ahead of China, which has more than tripled its output in a decade.