Rivers of ink have been spilled over the nuclear renaissance that is conquering the world. In their quest to reduce dependence on fossil fuels and facing an increase in energy demand over the next decade, countries around the world have launched new power plants and launched new projects, as this energy is considered as “green” and a good complement. to the renewable commitment. This fission fever has reached the United States, where the government of Joe Biden has spoken out clearly in its favor with a project of transform nearly 217 coal-fired power plants in nuclear power while extending its influence with cutting-edge “mini-reactors”. However, there is one element that is clearly at the origin of this “fever”: the technological elite of Wall Street (and the world) have been making deals for decades to guarantee the supply of this type of energy.
The latest to join the movement is Alphabet, the parent company of Google. Although there is no agreement yet, the world’s largest search engine has been talking openly for months about using nuclear energy to power future data centers. The CEO of the company himself, Sundar Pichai, has already made it completely official in an interview published this Thursday by Nikkei. The businessman commented that, given the expansion of data center activity, “we are considering additional investments, either in solar energy or in evaluate technologies such as small nuclear reactors modular, among others”.
Pichai commented in the company’s latest results that the idea is to work in the data center sector, the infrastructure that will support the artificial intelligence revolution, and that they expect that they use (each) more than a gigawatt of energy in the short term. In a speech at Carnegie Mellon University in Pittsburgh, he has already said that this option could involve, in part, so-called modular nuclear reactors (SMRs), the smallest plants capable of powering entire cities . “I see the amount of money that’s being invested in SMRs…for nuclear power. And so when I see the capital and innovation that’s being invested, I’m optimistic for the medium to long term.” The company acknowledged that it had created a specialized team to research the best sourcing options data center energy, with particular attention to nuclear energy.
Data centers are the latest fever sparked by AI, affecting all types of industries. The real estate sector relies heavily on the purchase and rental of these types of assets while energy companies compete to become their suppliers. Proof of this is that Iberdrola announced in September that its strategy involved a data center subsidiary of 10 billion euros and 5 gigawatts.
“Data centers are the backbone of our modern economy”
According to the International Energy Agency, data centers and the communications networks that support them account for 2 to 3 percent of annual global energy consumption. This burden could triple by 2030 because generative AI requires a huge amount of processing power, the Boston Consulting Group predicts. These analysts told it like it is “the nerve centers of the digital world, which play a fundamental role in storing, managing and distributing the enormous amounts of information that power our interconnected society. » Briana Kobor, director of energy market innovation at Google, said that data centers are “the backbone of our modern economy” and added that, according to data from the United States Department of Commerce, the sector represents 10% of gross domestic product.
It is not only its role in AI that can trigger its use, but companies like Google, Amazon or Microsoft already were. invest frenetically in these centers because they are necessary to maintain cloud activity. The two elements have complete synergy and PwC explained that “with AI, the cloud (and the data centers that support it) are moving from an option to an imperative for businesses everywhere “.
Microsoft’s “Fukushima”
But the reality is that Google’s stated intentions regarding nuclear power are just the tip of the iceberg. Its two other big rivals in AI and cloud have already taken action by directly striking big nuclear deals. This same month of September, the trend was completely clear with the historic movement of Microsoft and Constellation Energy. The second announced that it would invest $1.6 billion to reactivate the “cursed” Three Mile Island factory facing record demand from AI. Concretely, this factory should resume its activities in 2028 and it has already been agreed to sell almost all of its production to Microsoft to meet the electrical demand of its data centers.
This is a totally emblematic measure. Three Mile Island was the site of the largest nuclear accident in United States history. The factory experienced a crisis in 1979 after the partial meltdown of one of the reactors. The accident occurred in Pennsylvania, in the city that gives its name, where 25,000 people lived at the time. Greenpeace and other organizations have provided studies which support that this accident had adverse health effects with a statistical increase in cancer in the region.
It was the largest incident in this sector in the country and the largest in history at that time, until Chernobyl occurred seven years later. The United States had to proceed a radioactive cleanup process worth 2 billion dollars and which lasted from 1979 to 1993. That this historic power plant, a symbol of anti-power plant fear, is operational again is a key boost for the sector thanks to AI.
Constellation CEO Joe Dominguez said the deal with Microsoft is a “powerful symbol of the rebirth of nuclear energy as a clean and reliable energy resource“For his part, Bobby Hollis, vice president of energy at Microsoft, noted that the agreement “is an important step in Microsoft’s efforts to help decarbonize the grid and fulfill our commitment to becoming a balance sheet company carbon negative.
Amazon’s bet
Amazon, for its part, was the first to choose this path. In the first quarter of 2024 (in March), the company announced that it was purchasing por $650 million per data center linked to one of the largest nuclear power plants in the United States. Talen Energy sold Columbus Data, located in Pennsylvania and powered by the Susquehanna plant, with 2.5 gigawatts of installed capacity.
“Several years ago, Amazon set an ambitious goal: to achieve net zero carbon emissions by 2040, ten years ahead of the Paris Agreement. As part of this goal, we are on track to power our operations. with 100% renewable energy by 2025five years ahead of our original 2030 goal,” Amazon said. “To complement our wind and solar projects, which rely on weather conditions to produce electricity, we are also exploring new innovations and technologies and investing in other sources clean and carbon-based energy. free. “This agreement with Talen Energy for carbon-free energy is a project that is part of this effort.”
Such was the nuclear fever among these companies that this summer there was speculation that companies like Microsoft would enter the energy market directly, taking over the entire data center value chain. At this summer’s American Nuclear Society meeting in Las Vegas, executives from Google and Microsoft attended various conferences. In the case of the first, the Director General of Energy and Sustainable Development denied the idea, alleging that “we will not own any nuclear project”but acknowledged that it will be necessary on its part to support nuclear technologies such as SMRs.
“Nuclear weapons” are the kings of Wall Street
This nuclear data center fever has elevated electrical companies specializing in this energy to the rank of kings of Wall Street. The reason, according to Joseph Dominguez, CEO of Constellation Energy, is that they form a perfect pair that, if broken, would require significant investment in infrastructure electric.
“Connecting data centers directly to nuclear power plants, what the industry calls “co-location,” is the fastest and most cost-effective way to support data center construction, without burdening consumers with the costs of building new transmission lines. “, commented Dominguez. “The idea that enough energy can be accumulated “It’s frankly ridiculous to me that we could do this anywhere without it taking decades,” Dominguez said. “It’s a huge amount of energy trying to focus it.”
This is the reason why Vistra soared about 225% so far this year, the largest in the entire S&P 500, more than second-place Nvidia. The nuclear company is living a real dream on the stock market thanks to the fact that its revenues continue to increase while the future seems to be bright for the fission business. For his part, Constellation Energy It is the third most bullish company in the entire index with a gain of 127%.
