The resurgence of artificial intelligence has breathe life back into dormant nuclear power plants.
In the small town of Londonderry, located about an hour south of Harrisburg, Pennsylvania, a historical event is unfolding. For the first time in the United States, a power company is reviving an old nuclear reactor. Unit 1 of the "Three Mile Island" nuclear power plant was shut down in 2019, but in an exclusive deal, Microsoft has agreed to purchase power from this 50-year-old reactor for two decades to meet the growing energy demands of its data centers. The reactor is projected to be back online in 2028.
This development is significant, as the location that could now spearhead a nuclear renaissance was once on the brink of becoming the U.S.'s own Chernobyl. On March 28, 1979, a partial meltdown occurred in Unit 2 of "Three Mile Island." Contaminated cooling water and radioactive steam escaped, affecting nearly two million people in the region and leading to the evacuation of hundreds of thousands. In the end, the damaged reactor was decommissioned at a cost of nearly one billion dollars.
However, in the context of the AI revolution, these concerns seem like a distant memory. The reactor can generate up to 866 megawatts, enough to power 800,000 households. Microsoft and other tech giants require this power urgently: The development of artificial intelligence requires more and more computing power, and thus vast amounts of energy. The energy demand of their server farms is so high that the AI revolution is already pushing global power supply to its limits: The International Energy Agency estimates that the worldwide consumption of data centers will more than double by 2026.
Because tech giants aim to become climate-neutral while also introducing more and more power-hungry devices, they need vast amounts of CO2-neutral power. Nuclear power is therefore experiencing a resurgence in the wake of the AI revolution. However, the challenges of the technology remain the same as before the AI boom and are yet to be solved. Without government support, the nuclear revival may soon come to an end.
A $17 billion gamble for Tech Giants
It's not just Microsoft, other tech giants are also securing the last available reactors. In March, Amazon bought a data center for $650 million located near an old nuclear power plant. It's two hours away from Three Mile Island and sits on the Susquehanna River in Pennsylvania.
However, there are few other old reactors that were recently shut down and could be easily restarted in the U.S. Only the Palisades nuclear power plant in Michigan is also in the process of being reactivated. And according to media reports, the operator of the Duane Arnold reactor in Iowa is also considering restarting it to meet the energy demands of nearby data centers.
But the real challenge is whether new nuclear power plants will be built due to the AI revolution. According to the U.S. financial agency Bloomberg, OpenAI CEO Sam Altman has already presented discreet plans to the White House for several five-gigawatt mega data centers spread across the entire U.S. Each of these data centers would require the power generation of about five nuclear power plants - equivalent to a city the size of Miami. "As an engineer, as someone who has grown up with this, I don't believe it's feasible," Bloomberg quoted the CEO of the power company reviving the Three Mile Island nuclear power plant for Microsoft.
The obstacles are insurmountable: Since the near-disaster in the late 70s, only one new nuclear power plant has been built in the USA. It went online in 2023 in Georgia - seven years late and $17 billion over budget. All promises of lower production costs, such as modular construction and on-site assembly, proved to be mere wishful thinking. A subsidiary of Westinghouse, the US equivalent of engineering conglomerate Siemens, went bankrupt over it.
Fault-tolerant mini-reactors for a sustainable future
The online giants are not only investing in existing old nuclear power plants but also in promising new nuclear technology. Google's parent company Alphabet, for instance, has signed a contract with nuclear startup Kairos Power to supply power to its data centers with six or seven mini-reactors by 2030. The idea is to build new data centers where the nuclear power plants are, rather than building the reactors there. Sweden also has plans for such decentralized mini-nuclear power plants with modular, small reactors.
This strategy makes sense: Bringing power-hungry data centers and nuclear power plants closer together saves utilities billions in network investments. The US Department of Energy considers this the "ideal solution." But it all depends on whether the technology can be made smaller and safer. Kairos, Google's partner, aims to cool its reactors with molten salt, which evaporates much less. This eliminates the need for complex and failure-prone high-pressure cooling systems that can become potential bombs in an emergency like Chernobyl or Three Mile Island.
Kairos reactors utilize advanced TRISO fuel, which encases uranium within carbon and ceramic, forming balls the size of tennis balls. This design prevents the fuel from melting, even at extreme temperatures. Even in the event of a power failure, the reactor naturally cools down on its own. These reactors are designed to prevent major accidents and are as affordable as gas-powered plants. TerraPower, founded by Bill Gates, is constructing a test reactor in Wyoming using the same principles, while X-Energy aims to provide a chemical plant in Texas with nuclear energy by 2030.
Nearly 100,000 tons of nuclear waste accumulate
The concept dates back to the 60s but was put on hold. Similar designs were tested in a German experimental reactor until the 80s, and further developed in China. A single high-temperature reactor has been constructed in China, but it relies on gas coolants, not molten salt. The Kairos and TerraPower reactors remain conceptual at this stage. Permitting processes could delay their delivery of power to tech giants for years.
Unfortunately, there's a significant downside: These compact reactors generate substantially more nuclear waste compared to current-day reactors. The US currently has 92,500 tons of nuclear waste, with an additional 2,000 tons added each year, before the first kilowatt-hour of power is provided by Kairos or TerraPower for the AI revolution. Unlike Germany, a permanent nuclear waste repository is yet to be established.
The idea of continuous, clean nuclear energy for data centers is intriguing. However, without sizable subsidies, a nuclear revival may never materialize. Not just for the establishment of a final waste repository, but also for technology development. The experimental reactors of X-Energy and TerraPower receive half their funding from the companies and half from the state. The US taxpayers have already invested around three billion dollars in this public-private partnership. Regardless of the advancements, the long-term risks associated with the new nuclear technology are challenging to predict. The nuclear incident at Three Mile Island serves as a valuable warning, considering the reactor was state-of-the-art at the time of the major accident in the late 70s and had only been operational for a few months.
Microsoft's agreement to purchase power from the revived Three Mile Island nuclear reactor for two decades is a significant move to meet the growing energy demands of its data centers. Other tech giants, such as Amazon, are also securing old nuclear power plants to address the energy needs of their server farms, which are required for the development of artificial intelligence.
The challenges associated with building new nuclear power plants due to the AI revolution are substantial. Since the near-disaster in the late 70s, only one new nuclear power plant has been built in the USA, which went online in 2023 at a cost of $17 billion over budget. The obstacles to building new plants include promises of lower production costs proving to be mere wishful thinking and a subsidiary of Westinghouse going bankrupt over it.
