Nuclear energy is increasingly in the spotlight. Meta has secured another stake

The American giant has taken its AI efforts to the next level by recently concluding new agreements with three energy companies Vistra, TerraPower, and Oklo. This move will secure supplies of nuclear energy for high-performance data centres, in connection with which Meta is increasingly strengthening its efforts, especially in the development of superintelligence. One such project is the massive Prometheus supercluster in the state of Ohio. It is expected to enter operation this year, with the technology spread across several smaller data buildings and used for training advanced models. The latest contracts will add 6.6 gigawatts of electricity to the energy system over the next decade, which would mean electricity for approximately three-quarters of a million households. Meta has been building its infrastructure for a long time, and it managed to sign a similar contract, lasting up to 20 years, already in the summer of last year. Contract partner Constellation Energy will begin supplying the company with electricity from a nuclear power plant in Illinois starting next year.

Big Tech and nuclear power

Meta is not the only one, and its decisions fall within a broader trend of securing nuclear power as the energy driving artificial intelligence. Technology leader Microsoft has signed an agreement with Constellation Energy that will support the revival of the controversial Three Mile Island nuclear power plant. Meanwhile, Google, besides investing in the development of small modular reactors, will also finance the company Elementl Power in developing three sites, each of which should produce 600 megawatts of electricity. Google will also have the option to purchase them. Small modular reactors have also attracted Amazon, specifically its Amazon Web Services division. Company leaders agree that nuclear energy is necessary for the rapid development of artificial intelligence and for meeting its needs. Looking at energy consumption estimates, for example, Goldman Sachs expects that by the end of the decade data centres will “contribute” 8% of total U.S. demand. Currently, this figure stands at 3%. A different perspective was offered by Rystad Energy, which expects demand at the level of Turkey’s consumption, which is about 290 terawatt-hours.

Billions into energy

Artificial intelligence has experienced a boom in recent years, and investments in it are already counted in tens of billions of dollars. Meta alone plans to invest a total of 600 billion by 2028, while according to the Investing portal, about 500 billion USD should flow into the sector this year alone from other players such as Microsoft, Amazon, Alphabet, as well as Oracle and CoreWeave. Moody’s expects that, in addition to banks, investors will also participate in these investments through securities backed by various forms.

Old power plants as new opportunities?

Renewed interest in nuclear energy is also opening doors for the sector itself, which stepped into the background a few years ago in favour of natural gas. Requirements are changing, and already-built nuclear power plants are therefore a more economical decision, as their capital intensity is much lower than the construction of new reactors. This is further supported by contracts with technology leaders, as is the case with Three Mile Island or the Duane Arnold power plant under the direction of NextEra, which according to CNBC believes that thanks to the boom it will quickly be able to find cooperation partners. For now, the situation appears favourable for the sector, which could also be reflected in stock markets, and individual companies could become an interesting addition to portfolios.[1]

Old concerns have not disappeared

In addition to backing from the private sector, nuclear energy also has support within the government, as Donald Trump, according to CNBC, openly presents the view that production in the USA needs to be increased. Even though everything may seem like a good solution, this energy source has its pitfalls. First and foremost, it is the idea that comes to the mind of many laypeople when nuclear power plants are mentioned — accidents that have caused enormous damage in the past. Another obstacle is the handling of waste, which remains radioactive for many decades. In the USA, there is currently only a temporary solution, namely storage near power plants, which is inefficient in the long term, environmentally risky, and costly. A permanent solution is still nowhere in sight, and the willingness to change this situation is weak. Small modular reactors are presented as a good “replacement” for large power plants and could use recycled spent fuel. Their development is also still “in its infancy,” with only two such modules currently in operation, and even those are in China and Russia. According to a statement by the former chairwoman of the U.S. Nuclear Regulatory Commission to the BBC, most modules are merely theoretical and are not even in testing.[2]

[1, 2] Forward-looking statements are based on assumptions and current expectations that may be inaccurate, or on the current economic environment, which may change. Such statements are not a guarantee of future performance. They involve risks and other uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.