Google to Purchase Nuclear Power from Kairos Power's Small Modular Reactors
Google has joined Amazon and Microsoft in signaling that the future of data centers lies in small modular nuclear reactors (SMRs). The tech giant announced on Monday that it plans to purchase power from Kairos Power’s SMRs, a move that is part of an industry-wide shift towards nuclear energy to meet the growing demands of data centers. Google's decision to buy energy from multiple SMRs is aimed at sending a strong market signal and supporting long-term commercialization.
Google's Stance on Nuclear Energy
Michael Terrell, senior director for energy and climate at Google, stated in a call with reporters that nuclear energy has a critical role to play in supporting clean growth and delivering on the progress of AI. He added that the grid needs clean, reliable sources of energy that can support the build-out of these technologies. He believes that nuclear energy can play an important role in meeting demand cleanly and consistently.
Small Modular Reactors: A Cheaper, Faster Alternative
Currently, there are only three operational SMRs worldwide, none of which are in the U.S. However, this is set to change. SMRs are seen as a cheaper, faster alternative to traditional reactors. Kairos Power, supported by the Department of Energy, is building a demonstration reactor in Tennessee. Google expects the first reactor to be online by 2030, with an additional 500 megawatts by 2035.
Google's Support for Nuclear Power Companies
Terrell expressed optimism about backing nuclear power companies, stating that if these projects can scale and then scale globally, they will deliver enormous benefits to communities and power grids worldwide.
Google's Plans for Nuclear Energy
Google's announcement comes after Amanda Peterson Corio, global head of data center energy at Google, stated that the company is working with utility partners and generators to figure out how to bring new technologies, including nuclear energy, to the grid in highly regulated markets where direct power purchase is not an option.
U.S. Government Support for Nuclear Energy
The U.S. government recently closed on a $1.5 billion loan to revive Holtec's Palisades Nuclear Plant. The Biden administration aims to triple U.S. nuclear power capacity due to rising demand and growing climate concerns.
Other Developments in the Nuclear Energy Sector
Recently, Oklo announced it had finalized an agreement with the Department of Energy to advance the next phase of sitting at the Idaho National Lab. Pennsylvania Governor Josh Shapiro has also been urging for the quick reopening of Three Mile Island. Following Microsoft's agreement to purchase power from the dormant nuclear plant, Shapiro urged regulators to prioritize the reactor's connection to the electrical grid.
Implications for the "Next AI Trade"
Google's latest move provides a significant boost for the "Next AI Trade", which was outlined in April as a favorite long-term trade. The trade, which involves various investment opportunities for powering up America, is expected to yield stellar returns. As more capital is allocated to "those who provide the electricity to those who sell the picks and shovels for the next gold rush", this sector is predicted to outperform every other segment of the market. The biggest winners are expected to be those who backed the electricity needed to power the revolutionary technology that is AI.
Bottom Line
Google's decision to purchase power from Kairos Power’s SMRs is a significant step in the tech industry's shift towards nuclear energy. This move not only supports the commercialization of SMRs but also sends a strong market signal about the future of data centers. What are your thoughts on this development? Do you think this will pave the way for more tech companies to follow suit? Share this article with your friends and sign up for the Daily Briefing, which is every day at 6pm.
