In a surprising turn, many are looking to nuclear power, specifically Small Modular Reactors (SMRs), as a bold solution to keep data centers running 24/7 on clean, reliable energy.
Recent developments read like headlines from a tech-meets-energy crossover: Microsoft signing a 20-year deal to revive a dormant nuclear plant solely for its data centers, Oracle planning a gigawatt-scale data center campus powered by three SMRs and nuclear startups like Oklo inking one of the largest clean energy agreements ever, 12 GW of nuclear power for data center operator Switch.
This article explores the growing nexus between data centers and nuclear SMRs, examining the scale of the problem, the promise of these reactors, market projections, and the key players driving this emerging trend.
The Data Center Energy Challenge
Modern society’s dependence on data is matched by the extraordinary electricity consumption of data centers. Already, data centers account for an estimated 4–5% of global electricity use, and this share is rising fast. In the United States, the Electric Power Research Institute (EPRI) projects that data centers could consume up to 9% of all U.S. electricity by 2030, more than double their 2023 share (around 4%). Globally, one analysis forecasts data centers could approach 13% of world electricity demand by 2030. To put this in perspective, if the internet were a country, its data centers would be one of the top electricity consumers on the planet.
This surge is largely driven by the explosion of AI and cloud computing workloads. Power-hungry GPUs and servers for training AI models and serving billions of queries are ratcheting up energy needs with each hardware generation. For example, OpenAI’s new AI supercomputing center in Texas is expected to draw 1.2 gigawatts (GW), about as much power as 1 million U.S. homes. Industry forecasts show a five-fold increase in data center power capacity in the U.S. by 2035 (from ~33 GW in 2024 to ~176 GW in 2035), and a tripling globally by 2030. Hyperscale cloud operators (like Amazon, Microsoft, Google) account for the bulk of this growth, especially as generative AI alone could comprise over one-third of data center power usage by 2028.
Such demand poses a major challenge: ensuring reliable, round-the-clock power for these servers while also meeting corporate and societal goals for carbon-free energy. Data centers cannot tolerate outages or even minor power fluctuations without risking downtime. Yet in many regions, the electrical grid is already under strain. In Northern Virginia, the world’s largest concentration of data centers, these facilities now consume about 25% of the state’s electricity, raising fears of supply shortfalls and even rolling blackouts if capacity isn’t rapidly expanded. In short, the digital economy’s growth is bumping up against the limits of current energy infrastructure.
Why Look to Nuclear? The Case for SMRs
To keep pace with demand while cutting carbon emissions, data center operators have primarily turned to renewable energy (solar, wind) and efficiency improvements. However, renewables are intermittent, and even the most energy-efficient data center still requires constant power. This is where nuclear energy offers a unique advantage. In particular, Small Modular Reactors (SMRs) and microreactors are garnering attention as a new generation of nuclear technology well-suited for data center needs.
SMRs are smaller-scale nuclear reactors, typically producing anywhere from tens of megawatts up to about 300 MW of electricity per unit. Unlike traditional gigawatt-scale nuclear plants, SMRs are designed to be built in factories, shipped to site, and assembled in modules. This modular approach promises shorter construction times and lower upfront costs, making nuclear power more accessible to private customers like data center companies. Some microreactors (a subset of SMRs under ~50 MW) are even small enough to be truck-transportable and can be placed on-site at a data center campus.
The attributes of nuclear energy align closely with data center power requirements:
Reliability and 24/7 Operation: Nuclear plants have capacity factors above 90%, far higher than solar or wind (which are limited by weather and have 20–35% capacity factors). An SMR could run continuously for months or years between refueling, ensuring a steady power feed to servers regardless of time of day or weather conditions. This around-the-clock dependability is a huge benefit for data centers that promise near-100% uptime to their customers.
Baseload Power in a Compact Form: A single modern reactor unit can generate hundreds of megawatts. For example, a conventional large reactor (~1,000 MW) could theoretically supply 10–20 large data centers. Even smaller SMRs of 50–100 MW can power an entire data center campus. Importantly, they do so in a small land footprint compared to massive solar or wind farms, a critical factor as data centers often cluster near cities or tech hubs where land is limited. Nuclear’s energy density means an SMR plant occupying a few acres could deliver the same power as a solar farm covering many square miles.
Carbon-Free Energy: Nuclear fission produces no greenhouse gas emissions during operation. Companies with climate goals value this: powering a data center on nuclear energy yields near-zero direct CO2 emissions, helping meet sustainability targets. While renewables are also carbon-free, nuclear can fill the gaps when wind or sunlight aren’t available providing firm (always-available) clean power. In fact, executives have noted that nuclear is the only carbon-free source that can reliably deliver power every hour of every day, unlike the variability of solar/wind.
Energy Security and Grid Independence: By installing an on-site SMR or dedicating a reactor to a data center, operators can become less dependent on the grid. This reduces vulnerability to grid outages or regional energy shortages. For large cloud companies, having a dedicated nuclear source also insulates them from electricity price volatility. According to media reports, Rolls-Royce’s SMR division even pitched the idea that cloud providers could deploy small reactors so their hyperscale data centers achieve net-zero emissions and independence from public grids. While SMRs won’t be widely available until the late 2020s at earliest, planning is underway now.
Of course, nuclear power is not a panacea. High upfront costs, regulatory hurdles, public perception issues, and nuclear waste handling are challenges that must be addressed. Yet, the value proposition of SMRs is clearly enticing for an industry that prizes reliability and has enormous energy needs. This has led to a flurry of partnerships between data center operators and nuclear technology companies, signaling the emergence of a new market at the intersection of IT and atomic energy.operators and nuclear technology companies, signaling the emergence of a new market at the intersection of IT and atomic energy.
Tech Industry Turns to Nuclear: Key Deals and Players
What was once an unlikely scenario, internet companies embracing nuclear reactors, is fast becoming reality. In the past two years, several landmark deals have been announced that marry data center projects with current or future nuclear power sources. These agreements involve both hyperscale cloud giants and specialized data center operators, alongside nuclear startups and established energy firms.
Below, we highlight some of the most significant developments:
Microsoft: Reviving a Nuclear Plant for AI – In September 2024, Microsoft stunned the energy and tech worlds by signing a 20-year power purchase agreement (PPA) to bring the idle Three Mile Island Unit-1 nuclear reactor back online, solely to supply Microsoft’s data centers with carbon-free power. Three Mile Island Unit-1 (Pennsylvania) had been shut down in 2019 for economic reasons, but under this deal, plant owner Constellation will invest $1.6 billion to restart it by 2028. The reactor, ~837 MW in capacity, will feed 100% of its output to Microsoft, powering the company’s growing AI server farms in states like Pennsylvania, Virginia, Illinois, and Ohio. This PPA, 835 MW for 20 years, is far longer than typical wind/solar contracts and underscores a deep commitment to nuclear energy for base load power. Microsoft says this is critical for decarbonizing its operations and ensuring reliable energy for AI growth, and Constellation’s CEO noted that data centers “require an abundance of energy that is carbon-free and reliable every hour of every day, and nuclear plants are the only sources that can consistently deliver on that promise.”. Notably, Microsoft has been hiring nuclear engineers, including experts from reactor startups and utilities, and signed other 24/7 nuclear deals (for example, with Ontario Power in Canada and for its Virginia data center). Clearly, Microsoft is positioning itself as a leader in integrating nuclear power to meet tech demand.
Amazon: Investing in Advanced Reactors – Amazon Web Services (AWS), the world’s largest cloud provider, is also getting into the nuclear game. In late 2023, Amazon announced a series of agreements, most prominently an investment in X-energy, a developer of advanced modular reactors. Amazon is taking an equity stake in X-energy and plans to deploy the company’s Xe-100 SMR at an AWS site in Washington State as part of a pilot to power data centers. The Xe-100 is a 80 MWe high-temperature gas-cooled reactor design; Amazon’s involvement provides both capital and a future customer for this technology. In a parallel move, Amazon in March 2025 acquired a 960 MW data center campus next to the Susquehanna nuclear power station in Pennsylvania. That site (previously developed by Talen Energy’s subsidiary) sits adjacent to two existing large nuclear units, implying Amazon could directly tap into nuclear-generated electricity or even host new reactors there. Indeed, AWS was reportedly hiring for a “Nuclear and SMR Team Lead” position, indicating plans to build in-house expertise on small reactors. These steps align with Amazon’s goal to secure long-term stable power for its cloud data centers and meet its climate pledge. The company has eyed expanding its use of nuclear – though one attempt to boost nuclear power supply for a Pennsylvania data center (increasing a supply agreement from 300 MW to 480 MW) was recently stymied by regulators, showing there are still regulatory hurdles even for leveraging existing plants. Nonetheless, between investing in new SMRs and leveraging existing nuclear assets, Amazon is making clear that nuclear is part of its strategy to power AWS sustainably.
Google: Partnering on SMR Deployment – Google has long pursued 24/7 carbon-free energy for its operations, and that now extends to nuclear. In October 2024, Google struck an agreement with Kairos Power, a Californian startup developing a novel fluoride salt-cooled high-temperature reactor. Under the deal, Google will purchase power from Kairos’s first advanced SMR, helping fund the demonstration plant (anticipated by 2030) and aiming for a fleet totaling 500 MW by 2035. In essence, Google is acting as an early customer to ensure Kairos’s reactor gets built – an example of a tech firm directly enabling new nuclear technology. Google’s motivation is to secure firm, clean power for its data centers in the long run. (In the nearer term, Google has also signed agreements to source nuclear energy in regions like Virginia and Finland to fulfill its round-the-clock clean energy goals.) Google’s alliance with Kairos highlights that even companies known for solar and wind deals recognize the need for nuclear in the future energy mix to support their massive compute infrastructure.
Meta (Facebook): Exploring Nuclear Amid Setbacks – Meta Platforms has also shown interest in nuclear-powered data centers, though its early plans hit an unusual snag. In 2023, Meta was considering building an AI data center that would be directly powered by a nuclear facility. CEO Mark Zuckerberg revealed that initial plans were “scuttled” after a proposed site turned out to host a rare species of bee, complicating environmental approvals. This, along with regulatory complexities, paused the project. At an all-hands meeting, Zuckerberg expressed frustration at how slow and difficult nuclear development is in the U.S., especially compared to faster progress in countries like China. Nonetheless, Meta is reportedly continuing to seek partnerships with nuclear plant operators to supply its future data center energy needs. While Meta hasn’t announced a concrete deal yet, its interest is notable as it underscores that all the major hyperscalers are evaluating nuclear options. The episode also highlights one reality: novel projects can face environmental and regulatory hurdles (even bees!), and industry leaders are pushing for reforms to facilitate quicker nuclear deployment.
Oracle: 1 GW Data Center Powered by SMRs – Enterprise tech giant Oracle made waves in late 2024 by unveiling plans to build one of the world’s largest data centers, over 1,000 MW (1 GW) capacity, and have it entirely powered by on-site small modular reactors. Oracle’s founder Larry Ellison told investors that a location has been chosen and design work is underway, with permits already obtained for three SMRs to supply this massive campus. This project would far exceed the scale of any existing data center (Oracle’s largest today is 800 MW) and marks the first known plan by a major tech company to build dedicated reactors as the primary energy source for a data center. Details on which SMR technology or the timeline were not public, but the revelation indicates Oracle sees nuclear as key to scaling its cloud infrastructure. It’s a bold bet that by the time the campus is operational, those reactors will be available and licensed. If successful, it could set a template for ultra-large data centers running on self-contained clean power stations.
Switch, Equinix and Data Center Operators: It’s not only the hyper-scalers; companies that specialize in data center colocation and operations are also embracing SMRs. A prime example is Switch, a leading data center developer known for massive server campuses. In December 2024, Switch signed a Master Agreement with Oklo for 12 GW of advanced nuclear power projects through 2044. Described as “one of the largest corporate power agreements in history,” this non-binding framework envisions Oklo deploying Aurora reactors at Switch sites across the U.S. under a series of PPAs. Switch has marketed itself as 100% renewable-powered since 2016, but as their CEO Rob Roy noted, partnering with Oklo’s nuclear “powerhouses” will ensure Switch can meet clients’ future needs for “energy abundance” in the AI era while staying sustainable. Oklo’s Aurora reactor is a fast-spectrum microreactor (15–50 MWe) that uses heat-pipe technology and can even run on spent nuclear fuel. It aims for first commercial deployment by the late 2020. Beyond Switch, Oklo has lined up several other data-center related deals: in April 2024 it agreed with Equinix (a global colocation provider) on a 500 MW clean energy supply concept, and in May 2024 it signed an LOI for 100 MW with Prometheus (a newer hyperscale venture). By November, Oklo reported having letters of intent from two data center companies for 750 MW of reactor capacity, part of a growing customer pipeline of 2.1 GW for its nuclear powerhouses. In fact, by the end of 2024, Oklo said its total pipeline exceeded 14 GW of potential demand, much of it from the data center sector. This astonishing figure (for a company that has yet to build its first plant) reflects how power-hungry and eager for solutions the data center industry is. Other firms are not far behind: Deep Atomic, a startup in Switzerland, recently launched its design for a 60 MWe “MK60” reactor specifically aimed at data centers, complete with an additional 60 MW worth of cooling capacity integrated (i.e., it provides chilled water for server cooling). Deep Atomic is marketing the MK60 for on-site installation to make data centers self-sufficient in power and cooling – a novel approach to eliminate the grid as a bottleneck. Such designs underscore that SMRs can be tailored to the unique needs of IT facilities, even providing both electricity and cooling in one package.
Traditional Energy Players and Governments: The trend is not just limited to new startups. Big energy companies and governments are also supporting SMR development with an eye on applications like data centers. In the UK, Rolls-Royce is leading a consortium building a 470 MW SMR (expected around 2030) and has explicitly pitched its reactors to U.S. cloud providers such as Amazon to help them achieve net-zero data centers. “Plug an SMR into a data center and you’ve got full availability of low-carbon power,” a Rolls-Royce source told the press, noting that several major firms would prefer owning a dedicated reactor over just buying green energy credits. Likewise, government programs like the U.S. Department of Energy’s ARDP (Advanced Reactor Development Program) are funding demonstration SMRs (e.g., TerraPower and X-energy) that, once proven, could be replicated for private off-takers such as tech companies. There is also a move to repurpose or keep online existing nuclear plants specifically for tech loads – for example, the Byron nuclear plant in Illinois was saved from early retirement in part because data center growth in the Chicago area boosted power demand and the need for steady capacity. All these efforts point to a recognition that nuclear could supply a significant fraction of future data center energy. Deloitte analysts estimate that new nuclear (including SMRs) could potentially supply about 10% of the increase in data center power demand over the next decade, essentially helping fill the gap as consumption soars.
Market Outlook: Potential and Projection
Market Size and Growth: The global SMR market itself is projected to grow dramatically as dozens of designs come to fruition. Some forecasts see a $150–300 billion annual market by 2040 for SMRs and advanced microreactors, reflecting deployment at scale in various sectors. Data centers are poised to be a key segment of that market, given their energy intensity. Every 50 MW of new data center load that opts for an on-site SMR could represent roughly a $0.5–1 billion reactor investment (depending on cost per MW), not counting long-term fuel and service contracts – a substantial opportunity for reactor vendors. By 2035, if even ~10% of the projected 176 GW U.S. data center load were served by nuclear, that implies on the order of dozens of SMRs deployed. Globally, with data center power usage possibly exceeding 1,000 TWh by 2030, capturing a share of that with nuclear would likewise entail tens to hundreds of reactors. Market research firm Deloitte noted the next decade could see dozens of new nuclear projects explicitly tied to data center demand as part of a broader clean energy buildout.
Geographical Trends: The United States is currently at the forefront of pairing data centers with nuclear, likely due to its large hyperscaler presence and a fleet of existing reactors. However, other regions are following. Japan has seen interest – one Japanese cloud gaming provider is siting a new data center near nuclear plants to ensure ample power. In Europe, high energy costs and grid constraints in tech hubs (e.g., Dublin, Frankfurt) are prompting discussions about SMRs as a long-term solution for data center parks. For instance, Sweden and Finland have both floated the idea of small reactors to support local industry and data center clusters. The UK’s data center industry has also voiced support for SMRs as the grid in Greater London becomes stretched. China, meanwhile, is rapidly expanding its nuclear fleet (planning hundreds of reactors by 2035) and could leverage that for its own burgeoning cloud computing industry – though Chinese companies might build data centers directly hooked to state-owned reactors. Overall, while North America leads in concrete projects now, we can expect global adoption of nuclear-powered data centers by the 2030s, especially in any region serious about decarbonizing tech infrastructure.
Challenges Ahead: Despite the excitement, significant challenges must be overcome for this vision to fully materialize. First, the regulatory licensing of new SMR designs is a work in progress. Oklo, for example, had its initial licensing application rejected by the U.S. Nuclear Regulatory Commission in 2022 and is working on reapplying. No private company can deploy a commercial reactor until it gets regulatory approval, which can be slow and costly. The earliest operational next-gen SMRs (such as NuScale’s VOYGR plant in Idaho, or TerraPower’s Natrium in Wyoming) are expected around 2028–2030, assuming no delays. Widespread availability might not come until the 2030s. This means that, in the short term, data centers will continue to rely on the grid, renewables, and possibly natural gas as a bridge. In fact, recognizing this, some partnerships aim to phase in nuclear over time: Oklo and RPower have a model where natural gas generators are installed first to meet immediate needs (within ~2 years), then Oklo’s SMR units are added when ready to take over the primary load, with the gas units relegated to backup duty. This kind of staged approach could help data centers manage the interim period before SMRs arrive. Second, economic viability must be proven. Nuclear plants, even smaller ones, require substantial capital investment and commitments often spanning 20-40 years. While several deals we’ve seen (Microsoft’s 20-year PPA, Oklo’s 20-year framework with Switch) indicate customers are willing to sign long-term for the right price, nuclear will need to demonstrate competitive total costs versus alternatives (including the combined cost of renewables + energy storage + grid upgrades). Early projects may rely on government incentives or loan guarantees (e.g. Constellation is seeking a federal loan for the TMI restart). Over time, if modular construction achieves economies of scale, SMR costs could decline, further spurring adoption.
Safety and Public Perception: Any nuclear project will face scrutiny about safety and environmental impact. The industry is working on passive safety features in SMRs (many designs can shut down and self-cool without external power or human intervention) and touting their smaller radioactive footprint. Companies like Deep Atomic emphasize that their reactors can be sited closer to cities safely. Still, public acceptance will be crucial, especially for on-site reactors at data centers that might be near populated areas. Transparent community engagement and robust safety cases will be needed to avoid NIMBY opposition. Interestingly, some data center operators see nuclear as a positive differentiator for sustainability branding – but they will have to assure clients and regulators that these reactors pose no undue risk. The successful restart of Three Mile Island-1 in 2028 (for Microsoft) could serve as a high-profile example to build confidence, given TMI’s historical notoriety. As Constellation works through that process, it is undergoing extensive reviews to ensure the old plant operates safely for decades more. Early movers will set the tone for safety standards in this hybrid industry.
In summary, the market trajectory for SMRs in data center applications looks very promising, albeit contingent on technology readiness and regulatory green lights in the next 5–10 years. Projections by firms like Goldman Sachs, BCG, and Deloitte all point to double-digit growth in data center power demand annually; meeting a share of that with nuclear could translate into tens of billions of dollars in reactor sales and electricity contracts. If the ambitious plans announced in 2024–2025 come to fruition (e.g., Oracle’s nuclear data center, Oklo’s many deployments, X-energy reactors powering AWS, etc.), by the early 2030s we may see the first wave of SMR-powered data centers online. Their performance and cost will then influence how widely others follow suit.
Conclusion
The idea of nuclear-powered data centers is moving from futuristic concept to practical implementation. Faced with unprecedented energy demands and the urgency of climate change, the tech industry is forging unlikely alliances with the nuclear energy sector to secure clean and reliable power for the digital age. Small Modular Reactors offer a compelling synergy: they address a critical infrastructure need for data centers (constant, scalable electricity) while providing a path to significant carbon emissions reductions in one of the fastest-growing energy domains.
In a technically savvy yet accessible way, one might say the cloud is increasingly powered by the atom. We have seen AI research literally reviving reactors (as Microsoft’s deal will do in Pennsylvania) and startup entrepreneurs treating energy supply as the next frontier of innovation (as Oklo and others are doing with advanced microreactors). The market is responding enthusiastically – multi-gigawatt agreements and investments show confidence that SMRs will deliver. But it’s not a done deal: the next several years will be crucial to demonstrate that these reactors can be built on time, operate safely, and compete on cost.
If they succeed, the impact could be transformative. Data centers, once viewed as energy drains, could become flagships of clean power usage, even helping to stabilize electric grids by providing local generation. Imagine large cloud campuses each with their own small reactor – no longer just consumers of electricity, but partners in generation. This paradigm shift would echo across both the energy industry and the tech sector.
As of mid-2025, we are at the cusp of this shift. The SMR-data center nexus has moved from theory to concrete projects in planning. Oracle’s nuclear data center, Switch’s decades-long nuclear supply deal, Google and Amazon’s reactor ventures – these are bold first steps. The scale of what lies ahead is enormous: data center energy use is projected to nearly triple by 2028 in high-end scenarios, and each percentage point of that being nuclear could mean many reactors built. Policymakers, investors, and engineers are taking note, ensuring that supportive policies (like faster licensing and clean energy credits) and innovative financing (e.g., energy-as-a-service models) are in place to realize this potential.
For the general public, a “nuclear-powered cloud” might sound like science fiction, but it is fast becoming an engineering reality one that could quietly make our digital lives more sustainable. In the coming years, when you stream a video or ask an AI a question, the answer might just be brought to you courtesy of a small nuclear reactor humming away behind the scenes. The marriage of nuclear energy and information technology could define the next era of growth, proving that with ingenuity, even our biggest challenges (like powering AI sustainably) can find powerful solutions. The journey has begun, and all eyes will be watching these pioneer projects as they unfold, lighting the way (quite literally) to a greener high-tech future.
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