Nuclear Power: The Hidden Key to America's AI Leadership
This is a guest post by Dr. Anna Broughel, a Lecturer in Sustainable Energy Transition Policy at the Johns Hopkins School of Advanced International Studies.
The U.S. is currently lagging China in its industrial capacity to produce batteries, EVs, solar PV, and critical minerals processing. But the U.S. still dominates in two crucial areas: advanced chip technology and data centers. Looking at the data center landscape, out of 11,800 facilities worldwide, over 5,000 are located in the U.S., while China has less than 500. The U.S. still leads the global AI revolution, but China is closing in fast. Maintaining this lead is not just about developing better algorithms or attracting top talent. It is about something more fundamental: power.
1. Energy Demand and the Impact of AI
The data center business is now intrinsically linked to the energy industry. The recent announcement by Deepseek of finding a more efficient algorithm for both training and inference has rattled the semiconductor industry, as NVIDIA saw the largest daily loss in value in the history of stock markets. Many energy companies in the nuclear and natural gas space have seen their stock prices plummet since the investors were valuing their stocks with the expectation of considerable expansion of the electricity demand driven by data centers.
Several trends drove this expectation: electrification of different sectors, including strong growth in electric vehicle use, as well as data centers. We are heading towards a sustained annual 3% load growth through 2035. By 2035, data centers will consume 22% of all power, while transportation will account for 46%, buildings 16%, and industry 15%. In the 2020s, demand grew only by 1 to 2 percentage points annually, but this time it is different. On top of meeting a growing demand, we are simultaneously retiring old capacity and decarbonizing. The concept of building the plane while flying it comes to mind.
2. Challenges with Energy Sourcing
Enter the tech companies’ commitments to matching their power consumption both temporally and geographically - using clean power at the exact moment it is needed, right where their data centers are located. Natural gas is an attractive solution for the industry, but it will result in increasing emissions, and carbon capture costs are simply too high. Firming energy from renewable sources is also an option; however, due to intermittency, renewable resources will need to be significantly overbuilt and paired with storage. For example, Energy Vault recently announced a partnership that would deliver 2 GW of 10+ hours of storage by 2026. Yet, longer-term storage is needed to match the demand profiles of data centers that require predictable power, day and night, all year round.
3. The Role of Firm Clean Power:
What is left on the table as a source of firm clean power? Hydropower, geothermal, and nuclear are optimal resources to support hyperscalers. While the U.S. does not have a hydropower surplus, it might be an interesting strategy to import hydropower from Quebec. Geothermal has also been recently boosted by tech companies. Meta announced in August 2024 that they are partnering with Sage Geosystems to build first-of-a-kind (FOAK) geo-pressured geothermal system for its data centers. Google has partnered with Kairos and Amazon with X Energy to deliver small modular reactors in the time frame of 2035-2039. In spite of support by the tech industry, building FOAK technology always carries significant risk and does not guarantee success.
4. Nuclear’s growth in the United States:
In addition to SMRs and advanced nuclear, gigawatt-scale plants are again on the table. After all, a single supercomputer might need the same order of magnitude of power as what a standard AP1000 nuclear reactor produces. Newly confirmed Energy Secretary Chris Wright outlined the renaissance of commercial nuclear power in the U.S. This is meaningful because in the last three decades, the U.S. has built just three nuclear reactors, despite being a world leader in installed nuclear capacity of nearly 100 GW. The newest additions at Georgia's Vogtle plant made it America's largest source of clean power, with reactors that will run for 60 and perhaps 80 years. Yet, building these reactors was not easy. The design was not fully complete, and many other permitting hiccups resulted in cost overruns and delays with Unit 3, but Unit 4 came in significantly cheaper. The industry and political leaders have realized the need for an orderbook to build the same reactor designs repeatedly, achieving cost savings through repetition.
Even smaller reactors face substantial hurdles. NuScale's recent light-water SMR approval required 8 years of pre-application work and 6 years of formal review, costing over $500 million. The application included 12,000 pages across 14 reports, plus 2 million pages of supporting documentation requiring over 2 million labor-hours to prepare. This process desperately needs streamlining. The high cost of nuclear is not inherent - it is a consequence of our approach. The U.S. keeps building one-off designs and inflating costs based on the precautionary principle. Meanwhile, nuclear receives no market compensation for its clean and reliable baseload nature. As a result, the tech industry has been trying to bring back to life at least three inactive nuclear plants, since fully depreciated nuclear plants have one of the lowest levelized cost of electricity (LCOE) across all technologies.
5. The Future of Energy for Data Centers
The future is not what it used to be. It evolved from coal and oil to natural gas, and now it is transforming again to bring clean firm power sources front and center. Nuclear is no longer an underdog or a boring industry focused solely on safely operating existing reactors. It is a scalable, baseload, clean technology enabling stable grid operations. Nuclear is truly a Swiss Army knife of energy, capable of generating electricity, heat, and hydrogen. We cannot afford not building new nuclear capacity. If we fail, a mass exodus of data center industry is not going to wait.