Introduction
In an era where cloud computing and artificial intelligence (AI) are driving unprecedented growth in data centers, Big Tech companies are increasingly turning to nuclear power as a sustainable solution to meet their energy demands. This shift is particularly evident in the case of Microsoft, which recently made a significant deal with Constellation Energy to restart a nuclear reactor at Three Mile Island.
The Shift in Nuclear Power
Over the past decade, the nuclear industry in the United States has faced a significant decline. While seven reactors have been decommissioned, only two new ones have been switched on. This trend contrasts sharply with the rapid expansion of data centers, which now number over 10,000 worldwide, with half of them located in the U.S. The demand for energy in the data center sector is projected to grow by 29% to 166% by 2030, according to EPRI, an electric industry research organization.
Data Center Energy Consumption
Data centers currently consume about 4% of U.S. electricity. By the end of the decade, this figure is expected to rise to 9%, all while overall energy demand continues to grow. Hyperscale data centers, operated by companies like Microsoft, Google, and Amazon, are the primary drivers of this growth, accounting for 60 to 70% of all data center energy use.
Microsoft’s Commitment to Sustainability
Microsoft has set ambitious goals to eliminate its carbon emissions by 2030. However, the company’s expansion in cloud computing and AI has led to a significant increase in its carbon footprint, with emissions growing by 40% over the past four years. Google and Amazon have also seen increases in their carbon emissions, with Google up by 48% in the last five years and Amazon claiming that all of its data centers’ energy use is matched by renewable power.
The Appeal of Nuclear Power
For companies committed to reducing their carbon footprint, nuclear power offers several advantages. Fission reactors can operate at maximum capacity over 90% of the time, and maintenance outages are typically planned months or years in advance, providing ample time for data centers to prepare. This reliability and predictability make nuclear a compelling choice for Big Tech companies.
Microsoft’s Deal with Constellation
Microsoft’s recent deal with Constellation Energy to restart the Three Mile Island reactor is a significant step towards reconciling their data center growth with their sustainability goals. This 20-year agreement not only ensures a steady supply of clean energy but also provides a long-term commitment to reducing carbon emissions.
Additional Investments and Strategies
Beyond the deal with Constellation, Microsoft is also investing in the nuclear energy sector. The company has participated in a Series A funding round for Last Energy, which is developing small modular reactors. Additionally, Amazon has recently acquired a hyperscale data center directly connected to a nuclear plant and is hiring a nuclear engineer to help AWS develop and acquire nuclear power.
Investor Involvement
Big Tech investors are also showing interest in nuclear energy. Bill Gates co-founded TerraPower and has invested over $1 billion in the company. Nathan Myhrvold, former Microsoft CTO, is also involved through Intellectual Ventures. Sam Altman, CEO of Anthropic, backed the small modular reactor startup Oklo before it merged with a special-purpose acquisition company.
Conclusion
The embrace of nuclear power by Big Tech companies like Microsoft and Amazon reflects a strategic shift towards more sustainable energy sources. While there are challenges and concerns associated with nuclear energy, the industry’s reliability and potential for reducing carbon emissions make it an attractive option for companies committed to their sustainability goals. As the demand for data center energy continues to grow, the nuclear sector is likely to play an increasingly important role in the future of the tech industry.
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