Nuclear Energy as the Next Big Infrastructure Play for AI Growth

The artificial intelligence (AI) revolution is reshaping the global economy, but its rapid ascent hinges on a critical yet underappreciated factor: energy. As AI infrastructure-particularly data centers-soars to unprecedented scales, the demand for reliable, low-carbon power is becoming a defining challenge of the 21st century. According to the International Energy Agency, global electricity demand from data centers is projected to surge from 415 terawatt-hours (TWh) in 2024 to 1,200 TWh by 2035. In the United States alone, data centers could account for 8.6% of total electricity consumption by 2035, up from 3.5% today. This exponential growth, driven by the computational intensity of training advanced AI models like GPT-4 which requires 30 megawatts of power, is straining existing grids and necessitating a rethinking of energy infrastructure.

The Energy Challenge: A New Era of Demand

The scale of this demand is staggering. By 2028, AI-focused data centers are expected to consume 580 TWh annually-nearly twice California's current electricity usage. Such growth is not merely a technical challenge but a systemic one. Traditional energy sources, including renewables and natural gas, face limitations in scalability, intermittency, and carbon emissions. For instance, while solar and wind have capacity factors of 25% and 35%, respectively, nuclear power exceeds 92.5%, offering a stable, 24/7 supply of energy. This reliability is critical for AI infrastructure, which cannot afford the volatility of weather-dependent renewables or the carbon footprint of fossil fuels.

Nuclear Energy: A Strategic Solution

Nuclear power is increasingly positioned as the linchpin of energy security for AI. Deloitte estimates that nuclear could meet 10% of the projected increase in U.S. data center power demand over the next decade. Its advantages are manifold: it produces minimal greenhouse gases, operates continuously, and delivers high-energy density without the land-use conflicts of renewables. Moreover, nuclear's role aligns with global decarbonization goals, as AI's electricity consumption is expected to rival that of major industrial sectors by 2030.

Small Modular Reactors (SMRs) are emerging as a particularly compelling solution. These compact, factory-built reactors (50–300 MW) offer modular scalability, reduced transmission losses, and enhanced safety features such as passive cooling systems. Their small footprints make them ideal for colocation with data centers, enabling direct power delivery without grid interdependencies. For example, Amazon and Google have committed to SMR-powered data centers, with projects slated for 2030. Similarly, Meta has signed agreements with TerraPower, Oklo, and Vistra to power its Prometheus AI data center in Ohio, leveraging advanced nuclear technologies like Natrium units.

Policy and Market Momentum

Recent policy developments are accelerating nuclear's integration into AI infrastructure. Executive Order 14318, issued in Q4 2025, streamlined permitting for large-scale AI data centers and incentivized nuclear deployment. At the state level, regulatory frameworks now allow 18-month review timelines for new reactor applications, reducing deployment barriers. These changes are attracting private capital: the SMR market, valued at $6.3 billion in 2024, is projected to reach $13.8 billion by 2032. Tech giants are leading the charge, with Amazon securing 5 GW of SMRs from X-energy and Google pursuing partnerships with Kairos Power and Elementl Power.

Challenges and the Path Forward

Despite its promise, nuclear energy faces hurdles. Waste management, public perception, and regulatory complexity remain significant challenges. However, advancements in reactor design-such as Generation IV and molten salt technologies-offer potential solutions for industrial heat and waste reduction. Public-private collaboration will be essential to address these issues, particularly as AI's energy demands outpace traditional infrastructure.

Conclusion: A Strategic Investment Opportunity

The convergence of AI and nuclear energy represents a transformative infrastructure play. As data centers become the power-hungry engines of the digital economy, nuclear-particularly SMRs-offers a unique combination of reliability, scalability, and sustainability. For investors, this is not merely a technological shift but a strategic imperative. The companies and nations that prioritize nuclear energy today will secure a dominant position in the AI-driven future.