Amazon, Google make dueling nuclear investments to power data centers with clean energy
Amazon Web Services (AWS), a subsidiary of Amazon, is making a major move into nuclear power. On Wednesday, October 16, 2024, the company announced plans to invest more than $500 million to develop small modular reactors (SMRs). This investment is part of AWS’s goal to meet the increasing demand for clean energy, particularly as it expands into artificial intelligence (AI) and other energy-intensive technologies.
AWS has entered an agreement with Dominion Energy, Virginia’s utility provider, to explore building a small modular reactor near Dominion’s North Anna nuclear power station. This is a significant step towards Amazon’s larger ambition of achieving net-zero carbon emissions, and nuclear energy is seen as a critical part of that path. Unlike traditional fossil fuels, nuclear reactors produce no carbon emissions, making them an attractive option for companies like Amazon that are focused on sustainability.
Small modular reactors are a new type of nuclear technology designed to be more efficient and flexible than traditional reactors. They require less space, can be built closer to where the power is needed, and can be constructed more quickly. This is especially important for companies like Amazon, which needs large amounts of energy to power its rapidly growing data centers.
Amazon is not the only tech giant looking at nuclear power to meet its growing energy needs. Google recently announced a partnership with Kairos Power, an SMR developer, to purchase nuclear energy. Microsoft is also making moves in the nuclear space, working with Constellation Energy to restart the Three Mile Island nuclear plant to provide power for its data centers. These tech companies are recognizing that the future of clean energy might include a significant role for nuclear power.
In a statement, AWS CEO Matthew Garman said the company expects to need gigawatts of power in the coming years. He emphasized that traditional renewable sources like wind and solar will not be enough to meet these demands, making nuclear energy an attractive alternative. Garman also highlighted the safety and manufacturing advancements in SMR technology, which make it a more feasible option for widespread use.
Virginia, home to nearly half of all data centers in the U.S., will be a key location for Amazon’s nuclear energy plans. Northern Virginia, often called “Data Center Alley,” houses a significant portion of the world’s internet traffic. Dominion Energy currently provides about 3,500 megawatts of power to over 450 data centers in the state, and demand is expected to rise sharply. By 2040, AWS plans to invest $35 billion to build multiple data center campuses across Virginia. The new SMRs are expected to bring an additional 300 megawatts of power to the region.
Virginia Governor Glenn Youngkin welcomed AWS’s investment in nuclear energy, stating that it positions the state as a leader in nuclear innovation. He also praised the partnership between AWS and Dominion Energy, which will help meet the future power demands of Virginia’s rapidly growing data center industry.
But Amazon’s nuclear ambitions are not limited to Virginia. The company has also signed an agreement with Energy Northwest, a utility consortium in Washington state, to fund the development of four SMRs. These reactors will be built, owned, and operated by Energy Northwest but will supply energy directly to the grid. This power will support Amazon’s operations as well as homes and businesses in the region. Under the agreement, Amazon has the right to purchase electricity from the first four reactors, while Energy Northwest has the option to build up to eight more.
Amazon’s nuclear projects in Washington will be developed using technology from X-energy, a Maryland-based company that specializes in SMRs and nuclear fuel. In addition to its direct investment in SMRs, Amazon’s Climate Pledge Fund is the lead investor in a $500 million financing round for X-energy. This fund is Amazon’s corporate venture capital arm, which focuses on early-stage companies developing sustainable technologies.
X-energy CEO J. Clay Sell emphasized the importance of clean, reliable energy in supporting the future of AI and other emerging technologies. He said the partnership between Amazon and X-energy will help define the future of advanced nuclear power in the commercial market.
The U.S. government is also supporting these efforts. Energy Secretary Jennifer Granholm announced $900 million in new funding for companies looking to deploy SMRs. She stressed the need for data centers to be built in the U.S. for national security reasons and emphasized the importance of having clean energy sources to power them.
AWS’s move into nuclear power follows an earlier investment in nuclear energy through a partnership with Talen Energy. Last spring, AWS signed an agreement to purchase nuclear power from Talen’s Susquehanna Steam Electric Station in Pennsylvania. AWS also purchased a nearby data center campus powered by nuclear energy for $650 million.
As Amazon continues to grow, its energy needs will only increase. By investing in nuclear power, the company is positioning itself to meet these needs while reducing its carbon footprint. While nuclear energy is not without its challenges, the advancements in SMR technology offer a promising path forward for large tech companies seeking to balance growth with sustainability.
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