Uranium and Nuclear Energy: Strategic Infrastructure for AI's Energy Future

The artificial intelligence revolution is reshaping global energy dynamics, with data centers consuming an escalating share of electricity worldwide. As AI-driven workloads surge, the need for reliable, high-capacity power sources has become critical. Nuclear energy, long sidelined in favor of renewables, is reemerging as a cornerstone of infrastructure investment, with uranium-the lifeblood of nuclear power-positioning itself as a strategic resource for the AI era.

The Energy Challenge of AI Expansion

AI's insatiable appetite for computational power is driving a paradigm shift in energy demand. According to the International Energy Agency (IEA), global data center electricity consumption reached 1.5% of total global electricity use in 2024, with a 12% annual growth rate over the past five years. Projections indicate this could double to 945 terawatt-hours (TWh) by 2030, accounting for nearly 3% of global electricity consumption, according to CNET. CNET also notes that accelerated servers, which underpin AI operations, are expected to grow at a 30% annual rate, contributing almost half of the net increase in data center demand.

The United States and China are at the forefront of this energy surge, with North America alone projected to see AI data centers account for 12% of electricity consumption by 2040, according to Goldman Sachs Research. A separate Axios analysis projects similar exponential growth, and this strains existing grids, particularly in urban areas where data centers cluster, creating a pressing need for scalable, continuous power solutions MIT Technology Review reports.

Nuclear Energy: The Unlikely Hero of AI Infrastructure

Traditional renewables like solar and wind face inherent limitations in meeting AI's 24/7 energy demands. Intermittency and land-use constraints make them insufficient for high-capacity, uninterrupted operations. Nuclear energy, however, offers a compelling alternative. Tech giants such as Google, Amazon, and Microsoft are now investing heavily in nuclear infrastructure to power their AI ecosystems.

Amazon, for instance, has secured a 1,920-megawatt (MW) nuclear power purchase agreement (PPA) with Talen Energy to fuel its AI and cloud operations, according to CarbonCredits. Microsoft is funding a $1.6 billion project to restart a decommissioned reactor at Three Mile Island, aiming to supply 835 MW by 2028, and Google's Alphabet subsidiary is backing Kairos Power to build SMRs, with the first unit operational by 2030, TechTarget reports. These moves underscore nuclear energy's growing role in ensuring energy security for AI.

SMRs, in particular, are gaining traction due to their flexibility, safety, and ability to co-locate with data centers. Unlike traditional reactors, SMRs can be deployed in modular configurations, reducing grid strain and enabling rapid scalability, as explained in a Forbes Tech Council piece. The U.S. Department of Energy (DOE) and National Nuclear Security Administration are further accelerating this transition by selecting federal sites like Oak Ridge for AI data centers paired with nuclear power generation, ANS reports.

Uranium: The Strategic Commodity of the AI Era

As nuclear energy's role expands, so does the demand for uranium. The global uranium market, valued at $3.05 billion in 2025, is projected to grow at a 3.6% compound annual rate to $4.36 billion by 2035, according to Business Research Insights. Uranium demand is expected to rise by nearly 30% over the next five years, driven by reactor restarts, life extensions, and new builds, Zacks reports.

However, supply constraints are creating a critical mismatch. The U.S., which consumes 47–50 million pounds of uranium annually, relies heavily on foreign imports, with domestic production lagging behind demand, according to Forbes. Kazakhstan, the world's largest producer, accounts for 38.1% of global supply but has announced production cuts, exacerbating shortages, Yahoo Finance reports. Meanwhile, geopolitical tensions-such as U.S. sanctions on Russian uranium imports and instability in Niger-have fragmented supply chains, with Western-aligned uranium commanding premium prices, Discovery Alert observes.

Investors are taking note. Uranium prices have surged due to a structural supply deficit, with term market prices up 14% in 2024 despite a 16% drop in spot prices, according to Sprott. Sprott CEO John Ciampaglia has called the uranium market "structurally undersupplied," citing pent-up demand from utilities and reactor projects, as highlighted by HANetf. The U.S. Department of Energy's $3.4 billion investment in domestic uranium enrichment technologies, including laser enrichment, aims to reduce reliance on foreign suppliers, per a Discovery Alert analysis.

Investment Opportunities in Uranium and Nuclear Energy

For investors, the uranium sector offers a mix of direct and indirect opportunities. ETFs like the Sprott Uranium Miners ETF (URNM) and the Range Nuclear Renaissance ETF (NUKZ) provide exposure to uranium miners and the broader nuclear value chain, according to ETF.com. URNM, which includes physical uranium holdings and companies like Cameco and Kazatomprom, is a focused bet on commodity prices, while NUKZ spans advanced reactors, utilities, and construction firms (ETF.com also covers the ETF compositions).

Beyond ETFs, individual uranium producers and SMR developers are attracting capital. Oklo Inc., a pioneer in compact fast reactors, has secured partnerships with major tech firms, signaling confidence in nuclear's AI-era potential, as discussed by Sprott ETFs. Additionally, uranium processing facilities are expanding globally, with over 20 new projects launched in 2024 emphasizing sustainability and advanced technology, according to RAND.

Geopolitical shifts further amplify uranium's strategic value. As Western nations decouple from Russian supplies, uranium from politically stable jurisdictions like Canada and Australia is gaining favor, a trend noted in a MarketMinute roundup. This trend is likely to persist, with utilities increasingly prioritizing term contracts over spot markets to secure supply at stable prices, as explored by Dunham.

Conclusion: A New Energy Paradigm

The convergence of AI's energy demands and nuclear power's scalability is redefining global infrastructure priorities. Uranium, once a niche commodity, is now central to securing the clean, continuous energy required for AI's next phase of growth. For investors, this represents a unique opportunity to align with a sector poised for long-term structural demand. However, success will depend on navigating supply constraints, geopolitical risks, and technological advancements-factors that underscore uranium's role as a strategic resource in the AI era.