Big Tech Bets on Small Reactors. The Timelines Deserve Scrutiny.
Technology companies have signed agreements for nuclear power to run AI data centres. Most of the new reactors they are counting on do not yet exist.
Electricity has become the limiting factor for the AI boom. Utilities in several US states have warned that data-centre demand is arriving faster than new generation and transmission can be built. In response, large technology companies have signed a run of agreements involving nuclear power, from restarting or extending existing plants to supporting developers of small modular reactors.
The attraction is clear. Nuclear plants provide steady, low-carbon power around the clock, which suits data centres that run continuously and companies that have made climate pledges. Small modular reactors, designed to be built in factories and shipped in sections, promise lower upfront costs and faster deployment than the giant plants of the past.
The difficulty is that most of these designs are still moving through licensing, and very few have been built commercially anywhere in the world. Earlier projects have been cancelled over rising costs, and first-of-a-kind construction almost always takes longer than planned. Fuel supply is another constraint: several advanced designs need a more enriched fuel that is currently produced at limited scale.
That is why the near-term deals look different from the headlines. Agreements that extend the life of existing reactors or restart recently closed ones can deliver power within a few years. Agreements with new-reactor developers are better understood as long-term options, early customer commitments that help developers raise money and order components, with power expected in the 2030s.
Meanwhile, data centres are being powered by what is available now: grid electricity, gas turbines, and growing amounts of solar and batteries. Some operators are building gas generation on site, which raises questions about climate commitments. Others are locating new campuses where power is abundant, even if that means distance from customers.
Regulators and local communities are paying attention. When a data centre takes output from an existing plant, other customers may face higher prices or reduced supply. Grid operators have scrutinised some arrangements to ensure that costs are shared fairly.
Why it matters: the decisions made now about power sources will shape emissions and electricity prices for decades. Limitation: company announcements rarely disclose contract terms, so the financial commitment behind many nuclear deals is uncertain.
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