Big tech is thinking smart about how to power AI

Data centres are helping to spur a sensible energy transition

“Just as electricity transformed almost everything 100 years ago, today I actually have a hard time thinking of an industry that I don’t think AI will transform in the next several years” - Andrew Ng

There have been rapid developments in energy and Artificial Intelligence (AI) this year. Case in point: just as I finished writing this, Pacific Gas and Electric Company announced that they’d be using AI at the Diablo Canyon nuclear power plant in California. Atomic Canyon has been designed to make improvements in the nuclear sector by implementing time-saving measures like faster data retrieval to improve efficiency. It’s welcome news, and similar programs should one day be commonplace in nuclear power plants.

The rise of data centres

According to The International Energy Agency, over 7,000 data centres are now in operation or development worldwide, whole in 2015 there were 3,600. AI models are already achieving incredible things, like predicting breast cancer more accurately, but a valid criticism of AI is its significant carbon footprint. Now, this is being addressed.

Source: McKinsey & Co.

The global management consulting firm McKinsey & Co. projects that data centre energy demand will grow around 10% every year for the next few years at least, and that by 2026, data centres will make up 6% of electricity use. According to research by the investment bank Morgan Stanley, data centres and cloud infrastructure will likely produce around 2.5 billion metric tonnes of carbon dioxide-equivalent emissions worldwide through the end of the decade. Morgan Stanley also predicted that the increased emissions would lead to investment in decarbonisation initiatives, which has proved to be true, as just this year, several major technology companies have entered into agreements for supplies of nuclear energy.

Nowhere is this happening more than in the AI space.

Thinking big: Microsoft

JP Morgan described Microsoft’s decision to invest heavily in AI as “possibly one of the best investments ever made”, but with great power comes the need for… more power. Microsoft knows that AI is power-hungry, so the company has done the most logical thing and turned to the cleanest and most reliable source of energy available to humankind to power it: nuclear energy.

By working with industry to restart a unit of the Three Mile Island nuclear plant in Pennsylvania, Microsoft has made a bold and impressive move. I’ve spent so many years criticising politicians for failing to make sensible decisions like this that all I can do is point out that this act would have been thinkable only three years ago; of all plants to be chosen, it’s Three Mile Island, the site of a nuclear accident and the American equivalent of Fukushima Daiichi. Although neither of those meltdowns had a direct death toll, they did panic people into anti-nuclear hysteria that lasted for years (decades in the case of Three Mile Island). Such a turnaround shows a clear success story of our work in changing the narrative around nuclear energy and making its many advantages known. It is a huge relief to see big tech catching on and taking action. Well done, Microsoft. 

Thinking again: Amazon

Most people won’t have noticed the pivot, but only a few years ago, the tech giant Amazon was stanning specifically for solar and wind farms to power its data centres, boasting of its goal to attain “100% renewable energy”. Amazon is a global leader in renewable energy investment, with over 500 solar and wind projects, hundreds of solar arrays on the rooftops and grounds of Amazon facilities, plus the company is the world's top corporate purchaser of offshore wind, and it funds agrivoltaics. You name it, Jeff Bezos’s company has been doing it.

In July of this year, Amazon announced that it had achieved its 100% clean energy goal seven years ahead of schedule, but it also acknowledged that the increasing demand for AI highlighted a need for more power, which wind and solar cannot supply. Now Amazon has snuck nuclear energy into its “100% renewable” fantasy, announcing plans to fund the construction of next-generation nuclear plants near its server farms in Virginia and Washington.

Amazon’s Climate Pledge Fund is also supporting X-Energy, a startup focused on designing small modular reactors (SMRs). Although SMRs supply less energy than traditional nuclear power plants (hence they are much smaller), one of the benefits of SMRs is that they can circumvent some of the drawbacks that plague all large infrastructure projects, including nuclear power plants. Amazon isn’t thinking as big as Microsoft, but it’s still thinking smart.

But Amazon’s efforts haven’t always been successful. In July this year, the company paid $650 million for Talen Energy, a 960-MW data centre campus in Pennsylvania. Amazon also arranged for its Amazon Web Services facility to obtain electricity from Talen's Susquehanna Steam Electric Station (a nuclear power plant) in Pennsylvania, but two utilities, American Electric Power and Exelon, challenged the proposed interconnection deal, arguing that the cost of powering the AI would shift to ratepayers. The utility companies took the case to the Federal Energy Regulatory Commission (FERC), who then denied Talen Energy permission to supply additional on-site power to Amazon. Notably, FERC chair Willie Phillips dissented from the majority ruling, calling the decision “a step backward for both electric reliability and national security.” Now you see what I mean by things moving fast.

Back to thinking smart, though - to get around some of the challenges of providing enough electricity to data centres, some suppliers are implementing "bridge power solutions", where they supply electricity using on-site or nearby generation for two to three years as an interim measure while the data centres find ways to connect to the grid. 

Why has nuclear entered the chat?

Aside from nuclear energy being clean, there is also the fact that an electricity grid that was built for coal can be transitioned to nuclear, whereas adding a lot of wind and solar requires creating a new grid network, essentially wires and poles that form new infrastructure. In Germany, where the government has advocated for only wind and solar power for many years, German citizens have protested plans to construct the cables needed for a wind power grid. Additional infrastructure like this also makes panels and turbines more costly and slow to build, but these factors are never considered in overall cost and time estimates when wind and solar are discussed as part of net zero targets.

Even in countries with vast numbers of solar and wind farms and batteries, gas or coal are required as a backup at night or when the air is still. Although batteries and programs that pay ratepayers to turn off appliances during periods of intense demand on the grid help to juggle intermittency, this doesn’t work for core services like hospitals and won’t work for AI data centres. If it did, big tech would be sticking with solar panels to do the heavy lifting.

Thinking logically: Google

Last month, Google announced that it had signed a deal to secure several SMRs with the US startup Kairos Power. Google is another company that initially placed its bets on solar and wind, as it is still committed to decarbonisation, but the company has also realised that it cannot power multiple data centres with only wind and solar. When the SMRs come online, nuclear will do the heavy lifting.

Thinking wider: Oklo Inc.

This week, Oklo Inc., whose chairman is the American entrepreneur Sam Altman, announced that they have signed a deal to supply AI data centres with nuclear energy. This is promising news since the Nuclear Regulatory Commission denied Oklo's application for its powerhouse in 2022, leading to fears for the company’s future. 

Oklo has also announced that it may acquire Atomic Alchemy Inc., which specialises in isotope production. As part of their plan to build SMRs, Oklo will also recycle waste, which means that the radioisotopes that are a coproduct of the recycling process will be used for nuclear medicine. I can’t overstate how brilliant an ambition this is - nuclear medicine does not get enough attention, and it is as essential to human well-being as clean and reliable energy.

Thinking ahead: TerraPower

Since 2006, Bill Gates’s startup TerraPower has been working on developing the SMR Natrium with the aim of powering AI. TerraPower is being developed through a public-private partnership with the US Department of Energy. It’s the first coal-to-nuclear project under development in the world and is currently on track to come online in 2030. 

Thinking again: Meta

Unfortunately, Meta had plans to invest in nuclear energy for its data centre, but they fell through due to…bees. The tech giant was in the process of working out a deal with the operator of a nuclear power plant to provide electricity for a new data centre. Apparently, rare bees were found on site, which contributed to the cancellation of the entire project. The irony of a venture like this being thwarted by environmental issues is that every day that these data centres are denied an alliance with nuclear reactors, they burn more fossil fuels instead, which harms the environment and wildlife. If only the bees knew.

Technological ambitions are often stopped or slowed down by projected costs, planning processes and public consultations, but the US has been cutting some of the red tape in these areas and making more funding available for new ventures. It’s worth noting that the strong return of nuclear energy in the US is largely thanks to measures taken by the Biden administration, which has been remarkably pro-nuclear. Their plans also commit the US to tripling nuclear energy generation by 2050. Hopefully, that ambition will remain in place under the next administration.

Thinking positive: Électricité de France

Source: Statista

French energy company Électricité de France (EDF) is in talks to power three new data centres in the country. So far in France, data centres have only required 100 or 200 MW of power, but the proposed centres would be larger, 1 GW projects, hence seeking collaboration with EDF.

Personally, I hope that EDF succeeds, since its impressive nuclear fleet helped to carry Europe through the energy crisis, and France is set to export a record amount of electricity this year, but also because we need more of an AI revolution in Europe.

For all the bad press and criticism the most prominent companies receive, big tech is making sensible decisions regarding energy. Companies with data centres are logically considering what reliable energy can achieve, and addressing flaws in their “100% renewable” schemes. For those who are worried about AI’s carbon footprint, the best solution is to advocate for new nuclear plants to be built alongside data centres. While it’s not all plain sailing, we should celebrate the fact that big tech is recognising the need for nuclear energy and taking action to make it happen. The thing about thinking smart is that regardless of how many challenges are encountered in the short term, in the long run, the smarter thinker wins.