Amazon makes a nuclear move, investing over $500 million in developing small modular reactors.
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Amazon has made a notable announcement regarding substantial investments in nuclear energy, aligning itself with other technology leaders in the pursuit of meeting the substantial electricity requirements associated with artificial intelligence through atomic energy.
As major corporations such as Microsoft, Amazon, and Google rapidly enhance their global data center infrastructures, they are actively exploring alternative sources of electricity.
Amazon has entered into three agreements aimed at advancing the development of Small Modular Reactors (SMRs), which are designed to be more compact and potentially simpler to deploy compared to conventional reactors.
Despite the promising nature of this technology, it remains in the early stages of development and has yet to receive regulatory approval, which raises concerns regarding the timelines for implementation.
Matt Garman, CEO of Amazon Web Services, stated, “One of the fastest ways to address climate change is by transitioning our society to carbon-free energy sources, and nuclear energy is both carbon-free and able to scale — which is why it’s an important area of investment for Amazon.”
An Amazon representative confirmed that the agreements signed amount to over half a billion dollars.
The new partnerships include a collaboration with Energy Northwest to develop four advanced SMRs in Washington state, which could produce up to 960 megawatts of power by the early 2030s.
Furthermore, Amazon is participating in a $500 million funding round for X-energy, a prominent SMR developer, to facilitate the establishment of over five gigawatts of new nuclear energy projects.
In addition, Amazon is working with Dominion Energy to investigate an SMR initiative near Virginia’s North Anna nuclear power station, with the goal of adding at least 300 megawatts of power to accommodate anticipated demand increases.
Northern Virginia, recognized as a global hub for internet infrastructure, is witnessing an unprecedented surge in electricity demand driven by the expansion of data centers. Dominion Energy has indicated that new natural gas plants may be necessary, despite the commitment to decarbonize the state’s power grid by 2045.
AWS has announced the signing of an agreement with Dominion Energy, the utility provider for Virginia, to investigate the potential development of a small modular nuclear reactor (SMR) adjacent to Dominion’s existing North Anna nuclear power facility. Notably, nuclear reactors are characterized by their lack of carbon emissions.
An SMR represents a modern variant of nuclear reactor technology, featuring a reduced physical footprint that enables closer proximity to the electrical grid. Additionally, these reactors can be constructed more rapidly than conventional reactors, facilitating earlier operational readiness. Amazon joins a growing list of major technology firms investing in nuclear energy to meet the increasing power demands of data centers. Recently, Google revealed its plans to procure energy from SMR developer Kairos Power, while Constellation Energy is reviving the Three Mile Island facility to supply power to Microsoft data centers.
Matthew Garman, CEO of AWS, stated, “We anticipate a significant demand for gigawatts of power in the upcoming years, and it is unlikely that wind and solar projects alone will suffice to meet this demand. Therefore, nuclear energy presents a valuable opportunity. Furthermore, advancements in SMR technology are leading to safer and more easily manufactured systems in a compact design.”
Virginia hosts nearly half of the data centers in the United States, with a specific region in northern Virginia referred to as Data Center Alley, primarily located in Loudoun County. It is estimated that approximately 70% of global internet traffic passes through Data Center Alley on a daily basis. Dominion Energy provides around 3,500 megawatts of power to 452 data centers within its Virginia service area, with about 70% of this capacity situated in Data Center Alley.
A typical data center requires approximately 30 megawatts or more, as reported by Dominion Energy. Bob Blue, the president and CEO, mentioned during a recent quarterly earnings call that the utility is now receiving requests for power ranging from 60 megawatts to over 90 megawatts. Dominion anticipates an 85% increase in power demand over the next 15 years. Amazon Web Services (AWS) expects that the new small modular reactors (SMRs) will supply at least 300 megawatts of power to the Virginia area. Virginia Governor Glenn Youngkin stated, “Small modular nuclear reactors will be essential in establishing Virginia as a premier hub for nuclear innovation. AWS’s dedication to this technology and its collaboration with Dominion represents a significant advancement in addressing the future energy requirements of an expanding Virginia.”
According to an announcement made by Youngkin last year, AWS intends to invest $35 billion by 2040 to create several data center campuses throughout Virginia.
Garman further explained, “These SMRs will feed directly into the grid, benefiting not only data centers but all entities connected to the grid.”
Additionally, Amazon has entered into a new agreement with Energy Northwest, a consortium of state public utilities, to support the development, licensing, and construction of four SMRs in Washington state. While Energy Northwest will build, own, and operate the reactors, the energy produced will be supplied directly to the grid, aiding in the power supply for Amazon’s operations.
Under this agreement, Amazon will have the option to purchase electricity generated by the first four modules, with Energy Northwest having the potential to construct up to eight additional modules. This power will also be accessible to Amazon and utilities in the Northwest for residential and commercial use.
The SMRs will utilize technology developed by X-energy, a Maryland-based company specializing in SMRs and fuel. In conjunction with Amazon’s other initiatives, the Amazon Climate Pledge Fund has announced its role as the lead anchor in a $500 million financing round for X-Energy.
But the need for fossil-fuel-fired generation to power data center growth is at odds with the environmental ambitions of major tech companies, which are championing their ability to deliver AI’s power without tarnishing their green credentials.
Google recently signed a deal with Kairos Power for SMR-generated electricity, while Microsoft plans to use power from the restarted Three Mile Island facility.
Amazon has also announced plans to locate a major data center next to a 40-year-old nuclear facility in Pennsylvania.
According to Goldman Sachs, data center power demand is estimated to grow 160 percent by 2030, with AI representing about 19 percent of data center power demand by 2028.
