Nuclear Energy Heats Up as AI’s Insatiable Power Demand Grows
The artificial intelligence boom is creating a potential energy crisis, pushing investors and tech giants to champion nuclear power as a critical solution.
The explosive growth of artificial intelligence is creating an unprecedented thirst for electricity, forcing a dramatic reassessment of nuclear power as a cornerstone of the world's energy future. The sector is gaining powerful advocates, from tech giants to noted investors like Michael Burry, who see nuclear fission as the only viable way to power the compute-heavy data centers fueling the AI revolution.
The sheer scale of AI's energy consumption is startling. Data centers, the physical heart of the AI industry, are on track to double their electricity consumption by 2030, according to research from Gartner. This immense demand poses a significant challenge to grid stability and carbon reduction goals, pushing intermittent renewable sources like wind and solar to their limits.
This energy bottleneck has thrust nuclear power into the spotlight. In a high-profile social media post, Michael Burry, the investor famous for his prescient bet against the 2008 housing market, called for a massive $1 trillion government-led initiative to expand the U.S. nuclear power and grid infrastructure. Burry, an avowed skeptic of what he terms an "AI bubble," argued the investment is a geopolitical and economic necessity to "keep up with China," framing the energy shortage as the most tangible constraint on American technological growth.
The market is already responding to this renewed narrative. Companies across the nuclear value chain are seeing heightened investor interest. Constellation Energy (NASDAQ: CEG), one of the largest operators of nuclear plants in the U.S., has seen its stock rise significantly. Shares of CEG closed up over 6% in recent trading, trading at $342.52, near the upper end of its 52-week range. Similarly, uranium suppliers like Canada-based Cameco Corp (NYSE: CCJ) have experienced a surge, with its stock climbing more than 1.7% to $107.56 as the long-term demand outlook for uranium brightens.
Tech industry leaders are not just talking; they are taking action. In a landmark move, Microsoft has reportedly inked a deal to help power its data centers by restarting a reactor at the Three Mile Island facility, a site historically associated with the industry's challenges. Not to be outdone, Google has also entered agreements to explore the use of next-generation Small Modular Reactors (SMRs) to provide clean, reliable power for its own sprawling data center campuses.
These advanced reactors, which are smaller and can be built with more predictable costs and timelines than their gigawatt-scale predecessors, are central to the industry's growth thesis. Proponents argue they can be co-located with data centers to provide a direct, 24/7 power source that is both carbon-free and immune to the intermittency of renewables. However, the path forward is not without significant hurdles. The nuclear industry still faces challenges related to high upfront capital costs, complex regulatory approvals, and public perception. Yet, as the energy demands of AI continue to multiply, the logic of nuclear power is becoming increasingly difficult for investors and policymakers to ignore.