Data centers are springing up all over the place and they are hungry. We are seeing the need for energy exploding.
While many pointed to the energy use of Bitcoin, and then of electric vehicles, we see this dwarfed by the needs of Big Tech.
AI is going to put a huge strain on energy grids. People are starting to see the benefits of this technology and we are only getting started. As models progress, they are able to take over more tasks from humans. In fact, this will be the eventual outcome. AI agents will be handling those actions that are done by people.
To make this a reality, electricity is required at a scale most have not imagined. Those running technology companies are well aware of their present (and future) needs.
Because of this, the largest companies out there are going nuclear.
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Is it any coincidence that two of the largest technology companies in the world signed nuclear agreements in the same week.
The first is Google.
Now, the tech giant has signed an agreement with Kairos Power, a company that specializes in developing small modular nuclear reactors, or SMRs. As their name implies, these modular units are much smaller than traditional nuclear reactors and they're meant to be used in conjunction with one another, so they can be scaled to produce exactly the amount of power needed by a facility or a commercial power grid.
This is a long term plan, starting early in the next decade.
The new Kairos/Google agreement will see the deployment of multiple fleets of Kairos' SMRs to areas where Google operates data centers, with the goal of bringing 500 MW of nuclear energy online by 2035. The first deployment of the SMRs is slated for 2030.
Then we have Amazon dropping half a billion dollars.
Amazon Web Services is investing more than $500 million in nuclear power, announcing three projects from Virginia to Washington state. AWS, Amazon's subsidiary in cloud computing, has a massive and increasing need for clean energy as it expands its services into generative AI. It's also a part of Amazon's path to net-zero carbon emissions.
AWS announced it has signed an agreement with Dominion Energy, Virginia's utility company, to explore the development of a small modular nuclear reactor, or SMR, near Dominion's existing North Anna nuclear power station. Nuclear reactors produce no carbon emissions.
After falling out of favor, it appears that nuclear is moving back into the spotlight. The expect energy needs cannot be met with solar, wind, or even fossil fuels. It is likely going to require advancements (and increases) in all areas to meet the global needs.
Fortunately, the nuclear industry has made advancements. After being outcast for the last few decades, the need for the scaling of energy production is pushing companies in this direction.
It is not surprising to see Big Tech starting to partner in this area. The move by Amazon makes sense for them. Energy is going to be such a vital component that companies cannot be at the mercy of other entities.
Much like companies like Google and Tesla developed their own chips, these entities are going to have to ensure their power supply.
The future is AI agents. It is something that is abundantly clear now Companies are already starting to roll them out.
My view (along with others) is that we will see tens of billions of AI agents developed over the next decade.
We are rapidly moving deeper into the information age. This is the basis of the next industrial revolution. It also could push towards another economic singularity. At the core of this, is energy.
As agents take over human tasks, the energy normally provided by humans will have to come from the grid. This is where Big Tech is stepping up their game.
What we are witnessing is not much different from the last century. economies tend to be tied to countries ability to produce energy. Those with access to it tend to get ahead. It also altered the geopolitical landscape. Saudi Arabia's move over the last 50 years exemplifies this.
We are going to see a lot of deals like these. Every major AI company is going to face this dilemma. How do they meet the ever growing demand for compute (which means energy).
In these instances, nuclear is the solution that is part of the overall plan.
