Amazon is joining Google and Microsoft in going big on nuclear power

Amazon is joining its artificial intelligence competitors in the race for nuclear energy.

The tech giant has signed three agreements “to support the development of nuclear energy projects,” it said Wednesday. The agreements include building “several” small modular reactors (SMRs). These “advanced” nuclear reactors have “a smaller physical footprint, allowing them to be built closer to the grid,” Amazon said. And compared with traditional reactors, SMRs can be put online faster because construction takes less time.

“Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers, while helping us progress toward our Climate Pledge commitment to be net-zero carbon across our operations by 2040,” Matt Garman, CEO of Amazon Web Services, said in a statement.

Garman said the investment in nuclear energy is “an important area of investment for Amazon,” because it is “both carbon-free and able to scale.”

Amazon’s agreement with Washington-based Energy Northwest will produce four advanced SMRs that will be built, owned, and operated by the utilities consortium. The tech giant is also investing in SMR reactors and fuel developer X-energy, it said. X-energy’s design for advanced nuclear reactors will be used for Amazon’s project with Energy Northwest.

Under Amazon’s agreement with Virginia-based Dominion Energy (D), the companies will develop an SMR near the utility company’s North Anna Nuclear Generating Station.

AI ambitions are hindering sustainability goals

While the AI boom has boosted revenues for major tech companies, the technology’s massive demand for energy is hindering climate change efforts.

One query on ChatGPT needs almost 10 times as much electricity as a Google (GOOGL) search, according to a study by Goldman Sachs (GS). In April, Ami Badani, chief marketing officer of British chip designer Arm (ARM), said data centers powering AI chatbots such as OpenAI’s ChatGPT account for 2% of global electricity consumption. That demand, Badani said, could eventually slow down AI progress.

In July, Google said its carbon emissions have risen by 48% since 2019, mostly due to energy consumption by data centers and supply chain emissions. The company’s carbon emissions were up 13% year over year in 2023, according to its 2024 Environmental Report.

In the report, Google said it was “no longer maintaining operational carbon neutrality” and would turn to other “carbon solutions and partnerships” to reach its 2021 goal of reaching net-zero emissions across its operations and value chain by 2030.

In 2020, Microsoft (MSFT) set a similar goal to be “carbon negative” by the end of the decade. But in May, the company said its carbon emissions were almost 31% higher than in 2020, according to its 2024 Environmental Sustainability Report. That jump was mostly due to building data centers for AI, Microsoft said, as well as due to AI hardware such as semiconductors and servers.

“Our challenges are in part unique to our position as a leading cloud supplier that is expanding its datacenters,” Microsoft said in a statement. “But, even more, we reflect the challenges the world must overcome to develop and use greener concrete, steel, fuels, and chips.”

Data centers, which are in demand as companies continue developing larger, more powerful models, could consume up to 9% of electricity in the U.S. by 2030 — more than double what is being used now, according to the Electric Power Research Institute.

Big Tech is hungry for nuclear energy

Tech giants are taking notice of their growing carbon footprints.

In July, the Wall Street Journal (NWS) reported that a third of the U.S.’s nuclear power plants were discussing deals with tech companies to supply electricity for data centers.

Among them was Amazon, which was reportedly closing in on a deal to use electricity from Constellation Energy (CEG) — the owner of most of the country’s power plants.

In Amazon’s announcement Wednesday, it said it had made an agreement with Talen Energy “to co-locate a data center facility next to” the company’s Pennsylvania-based nuclear facility.

Earlier this week, Google announced it had signed “the world’s first corporate agreement to purchase nuclear energy” from SMRs developed by California-based Kairos Power.

Google said it expects to bring Kairos Power’s first SMR online by the end of the decade. Other reactors will be deployed through 2035. Through the deal, 500 megawatts (MW) of 24/7 carbon-free power will be available to U.S. electricity grids.

In September, Microsoft and Constellation announced a 20-year power purchase agreement that would restart the Unit 1 reactor on Three Mile Island — close to the site of one of the worst nuclear power plant accidents ever in the U.S. Through the deal, which will launch the Crane Clean Energy Center (CCEC), Microsoft will purchase energy from the Unit 1 reactor as part of its sustainability goal.

The CCEC, which is expected to come online by 2028, will add more than 800 MW of carbon-free electricity to the power grid, a study by the Pennsylvania Building and Construction Trades Council found.

Source: Quartz
--Agencies