Google bets on nuclear power to drive AI expansion

Benefits of using small modular reactors

Data center power usage is set to surge in the coming years, driven by cloud computing and AI. AI-related energy consumption alone is projected to increase by around 45% annually over the next three years.

“For the past 4-5 years, companies have actively attempted to reduce energy consumption or move to alternative sources,” said Suseel Menon, practice director at Everest Group. “Most recently Microsoft wound down an attempt to create underwater data centers. Given the global focus on sustainability, such companies have also explored renewable sources of energy for their operations. But these, although sustainable, can be disrupted due to natural phenomena.”

The high energy output of nuclear reactors is prompting hyperscale providers to turn to nuclear power to meet the growing demands of AI workloads, according to Rajiv Ranjan, associate research director at IDC.

“Nuclear power provides a consistent energy source, unlike renewables, which depend on the availability of sun or wind,” Ranjan said. “Although nuclear power sources are more expensive, their fuel efficiency is much higher than traditional sources.”

Google plans to purchase up to 500 megawatts of power from six to seven Kairos reactors, an initial commitment that analysts say may only cover a fraction of the company’s energy needs in the 2030s.

“The choice of Kairos Power is notable, as this startup in the SMR market has yet to launch its reactors,” said Hyoun Park, CEO and chief analyst at Amalgam Insights. “This could provide Google with an opportunity to co-develop solutions over the next six years, with reactor launches scheduled for 2030.”