Major Tech Companies Turn to Nuclear Power to Meet AI's Growing Energy Demands

The rapid proliferation of artificial intelligence is driving major technology companies to invest in nuclear energy as a primary power source for their data centers and AI development initiatives. Amazon Web Services recently signed an agreement with Dominion Energy to explore developing small modular reactors near Dominion's North Anna nuclear power station in Virginia, with Amazon investing over $500 million across three nuclear projects from Virginia to Washington state.

Small modular reactors, which produce up to 300 megawatts of electricity per unit, are becoming crucial energy sources for AI data centers. Virginia hosts nearly half of all U.S. data centers, with one area in northern Virginia processing an estimated 70% of the world's internet traffic daily through what's known as Data Center Alley. Dominion Energy serves approximately 3,500 megawatts from 452 data centers across its Virginia territory and projects power demand will increase by 85% over the next 15 years.

Amazon has also partnered with Energy Northwest to support the development of four small modular reactors in Washington state, with the generated energy feeding directly into the grid to contribute to Amazon's energy needs. The agreement grants Amazon the right to purchase electricity from the first four reactor modules, while Energy Northwest retains the option to construct up to eight additional modules that could supply power to both Amazon and regional utilities.

Other technology giants are following similar paths. Google recently announced a deal with Kairos Power to purchase power from small modular nuclear reactors the company will build, with the initial phase intended to bring Kairos Power's first reactor online by 2030. This agreement should enable up to 500 megawatts of new carbon-free power to U.S. electricity grids. Microsoft has brokered a deal with Constellation Energy Corp to reopen the Three Mile Island nuclear plant in Pennsylvania, with Microsoft agreeing to exclusively purchase the plant's energy for two decades.

The growing demand for energy globally and the need to move away from fossil fuels are setting the stage for nuclear power's resurgence. According to Science Direct, nuclear energy represents the safest and most renewable clean energy source available. The various deals announced by big tech companies and nuclear energy providers have led to significant equity performance increases for companies in the industry, with shares of U.S.-listed small modular reactor developers reaching record highs in mid-October.

As big tech firms pursue different avenues to power their data centers, increased demand for critical materials like uranium presents investment opportunities. The Sprott Uranium Miners ETF and Sprott Junior Uranium Miners ETF provide comprehensive exposure to companies involved in the uranium industry, offering investors potential benefits from gradual price appreciation in uranium markets. For investors seeking to capitalize on AI growth potential, investing in critical minerals such as uranium represents an opportune way to gain tangential exposure to the technology's ongoing evolution.