Tech Giants Turn To Nuclear & Geothermal To Power AI Expansion

Introduction 

The surge in artificial intelligence (AI) commercialization is driving up electricity demands for the three largest cloud computing companies—Amazon, Google, and Microsoft. These tech giants are increasingly seeking carbon-free energy sources, including nuclear and geothermal power, to mitigate the environmental impact of their expanding data center operations.

Amazon’s Nuclear Commitment

In mid-March, Amazon Web Services (AWS) announced a $650 million deal with Talen Energy to power a data center using one of the largest nuclear plants in the U.S., located in Pennsylvania. This campus will feature a 48-megawatt computing facility, with plans for a 960-megawatt expansion. Amazon highlighted the importance of diversifying its clean energy portfolio beyond wind and solar projects, which are weather-dependent, by incorporating more reliable sources of carbon-free energy.

Microsoft and Google’s Clean Energy Collaboration

Microsoft and Google have jointly announced their plans to purchase electricity generated from geothermal, clean hydrogen, battery storage, and advanced nuclear technologies. They are collaborating with steelmaker Nucor to identify and invest in promising clean energy projects. This strategy aims to aggregate the demand of multiple large buyers, facilitating the financing and commercialization of innovative clean energy solutions.

Addressing AI’s Growing Energy Appetite

Data centers and communication networks already account for 2-3% of global annual power consumption, a figure that could triple by 2030 due to the processing demands of generative AI, according to the International Energy Agency and Boston Consulting Group. To support this growth, Amazon, Google, and Microsoft have collectively invested in numerous solar and wind power projects. For instance, Google recently signed a 400-megawatt power purchase agreement for a new data center in Kansas City, Missouri, while Amazon leads with over 500 renewable energy projects.

Overcoming Renewable Energy Challenges

While these companies have made significant strides in renewable energy investments, interconnection delays and grid capacity limitations pose challenges. To circumvent these issues, tech companies are increasingly building data centers near fossil fuel-free power sources, allowing them to avoid the lengthy process of connecting to the grid. This approach also helps in reducing the time required to bring new facilities online.

Pioneering New Energy Projects

Google is actively supporting Fervo Energy’s geothermal power plant in Nevada, which aims to enhance the local grid’s capacity. Enhanced geothermal systems could significantly boost U.S. electricity generation, potentially providing up to 120 gigawatts by 2050, according to the U.S. Department of Energy. AI is also playing a crucial role in discovering and developing geothermal resources, with companies like Zanskar and Quaise leading these efforts.

The Future of Nuclear Energy

Both Google and Microsoft are investing in nuclear fusion, a potentially safer and inexhaustible energy source compared to traditional nuclear fission. Google has invested in TAE Technologies, while Microsoft has a contract with Helion to purchase electricity from a future fusion plant. Additionally, Microsoft is focusing on small modular reactors (SMRs), which promise to be more cost-effective and quicker to build than traditional large reactors.

Navigating Nuclear Challenges

Despite the potential benefits, nuclear energy poses several challenges, including the need for highly enriched uranium fuel (HALEU) and effective long-term waste management. The U.S. is working to build a domestic HALEU supply chain, a task complicated by regulatory, environmental, and community concerns.

Conclusion

As AI continues to drive up energy consumption, Amazon, Google, and Microsoft are pioneering efforts to secure reliable, clean energy sources. Their investments in nuclear and geothermal power represent a strategic shift towards sustainable operations. However, the successful integration of these technologies will require overcoming significant technical, regulatory, and logistical hurdles. The commitment of these tech giants to innovate and invest in clean energy solutions is a promising step towards a more sustainable future.