In today’s issue:

  • Amazon is a nuclear-powered company
  • Future data centres may have built-in nuclear reactors
  • Come 12 August, a specific type of nuclear generation will be exponentially more valuable

In March 2024, Amazon announced it had bought a huge data centre under construction at one of America’s largest nuclear plants.

Amazon Web Services (AWS), the tech giant’s cloud computing unit, bought the centre from US power generator Talen Energy, which developed the site adjoining the Susquehanna nuclear power station, which is 130km north-west of Philadelphia.

The $650 million deal will see AWS siphon somewhere between 480 and 960 MW of capacity from the 2,500 MW plant under a ten-year power-purchase agreement.

In some ways, this announcement was unexpected.

Unlike Microsoft, which has long had a pro-nuclear founder in Bill Gates, Amazon has never been seen as an ally of nuclear, preferring instead to power its vast operations from renewable sources.

But by buying a data centre that uses such a large proportion of a massive nuclear plant’s output, Amazon effectively announced that it was now becoming a nuclear-powered company.

This is big for the “Nuclear Energy as ESG” story, certainly.

Indeed, Amazon’s first-ever agreement with a nuclear power facility could be transformative in how nuclear is viewed as a low-carbon source of electricity.

But as well as being unexpected, the deal also made perfect sense.

That’s because a huge bottleneck for growth that companies such as Amazon, Google, Microsoft and Facebook now face is access to constant electricity.

After all, power demand for data centres and artificial intelligence (AI) is soaring, meaning these companies and those like it need power, and they want it at cheap rates. Operating costs for the Susquehanna nuclear plant in Pennsylvania are very low – likely around $25 per MWh.

In Virginia – home to the biggest concentration of data centres in the world – Green Energy Partners has made a similar move, buying 640 acres next to Dominion’s Surry nuclear plant.

Meanwhile, Microsoft – alongside Google and Amazon, one of the world’s biggest data centre owners – has now hired its first director of nuclear technologies.

The company has already signed a nuclear power deal with Constellation Energy to supply power to data centres in Virginia, while both Gates and Sam Altman, the head of Microsoft-backed OpenAI, have both invested in nuclear startups, as has Google.

In short: uranium can now be viewed very much as an AI play.

After all, data centres are now projected to be significant drivers of growth in electricity demand in many regions.

According to the International Energy Agency (IEA), electricity consumption from data centres, AI and the cryptocurrency sector could double by 2026 – just two years away.

In the US alone, data centres could comprise up to 7.5% of total US electricity consumption by 2030 or 390 terawatt hours, the equivalent of the equivalent usage of 40 million US homes, according to the Boston Consulting Group.

In fact, most AI GPUs will draw 1,000 watts of electricity by 2026, up from the roughly 650 watts on average today, BCG added.

At current growth rates, some new AI servers could soon gobble up more than 85 terawatt hours of electricity each year, researchers have estimated – more than some small nations’ annual energy consumption.

For tech firms, it makes sense to tap directly into nuclear plants instead of sourcing electricity from the grid. And, of course, around-the-clock nuclear power matches very well with around-the-clock data centre power needs.

One day data centres could very well come with their own dedicated, built-in nuclear reactors.

According to my colleague Sam Volkering, this is where Sam Altman comes in.

You see, the way to play this story might not be via investing in the companies building out the mammoth centralised nuclear power stations of yesterday.

Sam Altman is in the process of rolling out a specific type of nuclear generation that specifically targets the growing electricity demand from date centres.

What’s more, come 12 August, a specific law – US bill H.R. 1042 – will come into effect that could make this energy breakthrough exponentially more valuable.

Sam says this is going to catch a lot of people by surprise, and I think he might well be right.

To learn more, click here.

Until next time,

James Allen
Contributing Editor, Fortune & Freedom