Google Considers Nuclear Energy for Data Centers

Microsoft's Move Towards Nuclear Power

A few weeks ago, Microsoft made headlines when it announced a partnership with Constellation Energy to reboot the Three Mile Island nuclear power plant, the location of the worst nuclear disaster in American history. Constellation CEO Joe Dominguez stated that this move served as a significant wake-up call for policymakers and the market, emphasizing the importance of nuclear assets in the country's future. This development aligns with predictions made in April, suggesting that investing in the infrastructure to facilitate the AI revolution could be more profitable than betting on tech giants like Nvidia and Dell.

Amazon's Acquisition of Talen Energy's Data Center

Microsoft is not the only tech giant exploring nuclear power options. In March, Amazon Web Services purchased Talen Energy’s data center campus, which is connected to the Susquehanna nuclear station in northeast Pennsylvania. The $650 million deal has paved the way for similar transactions aimed at powering the AI sector, known for its high energy consumption.

Google's Interest in Nuclear Power

According to Bloomberg, Google is also considering nuclear power as a potential energy source for its data centers. The tech giant is reportedly working with utilities in the US and other countries to assess the viability of this option. Amanda Peterson Corio, the global head of data center energy at Alphabet Inc.’s Google, stated that having a consistent, non-intermittent energy source is critical for the company's long-term growth. She also did not dismiss the possibility of utilizing nuclear energy in countries like Japan.

Texas' Message to Big Tech

Last week, Texas’ top electricity regulator issued a statement to Big Tech companies, suggesting that if they wish to build AI data centers near power plants, they may also need to construct the power plant. Thomas Gleeson, chairman of the Public Utility Commission of Texas, warned that allowing construction near existing plants could risk resource adequacy on the grid if the data centers consume all the plants’ power. He suggested that data center developers should consider supplying some of their own power if they wish to connect to the Texas grid within 12 to 15 months.

The Future of the "Next AI Trade"

The impressive returns of the "Next AI trade" in 2024 are likely just the beginning. As more capital is allocated to those providing electricity for the AI revolution, this sector is expected to outperform every other market segment. The biggest winners may not be those who bet on AI technology, but rather those who invest in the electricity needed to power it.

Bottom Line

The shift towards nuclear power by tech giants like Microsoft, Amazon, and Google underscores the growing demand for reliable, non-intermittent energy sources to power the AI revolution. As the AI sector continues to grow, the need for robust and efficient energy solutions becomes increasingly critical. What are your thoughts on this development? Do you think nuclear power is the way forward for data centers? Feel free to share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is available every day at 6 pm.