AI Is Reviving the Prospects for Nuclear Power

James Walker, CEO and Board Member of Nano Nuclear Energy joins to discuss the need for small modular nuclear reactors to power AI data centers, and their recent contracts with Cambridge Atom Works to sell its Portable ODIN™ Reactor Technology.

Electricity demand growth from data centers is pushing the energy industry to revisit an old friend: nuclear power. After years of stagnation, the nuclear power sector is poised for a revival, though rapid growth is far from guaranteed.

Data centers are fueling significant load growth, so data center operators are turning toward nuclear as a power source. BNEF expects data centers to account for 8.6% of US electricity demand in 2035, up from 3.5% currently.

Data centers need access to round-the-clock power, making nuclear an attractive option to meet their high requirements for reliability. The nuclear industry and the data center industry are banding together, with more than 32 gigawatts of announced capacity partnerships for fission reactors. Most of these are not firm commitments, and it remains to be seen how much of this pipeline materializes.

Governments have also started to take more friendly stances toward nuclear power. In the US, the Trump administration issued a series of executive orders aimed at reducing the time required for regulatory approvals and is targeting 400GW of nuclear capacity deployed by 2050, up from 97GW today.

In the UK, Prime Minister Keir Starmer announced plans to remove restrictions on where nuclear power plants could be built and proposed new rules for small, modular and advanced reactors. Both the US and the UK were among the signatories to the COP28 global aspiration to triple nuclear capacity by 2050. It looks like the stage is set for reigniting the global nuclear industry.

BNEF View

New nuclear projects are coming online slowly, and the pace of reactor retirements have delivered a global industry essentially “running in place.” BloombergNEF sees the industry moving beyond this standstill to one characterized by deliberate and measured growth.

A slew of capacity additions are expected from 2025 through 2028. Many of those additions are in China, where the nuclear industry benefits from unwavering state support, cheaper labor, a less stringent regulatory environment and programs to build multiple reactors at one site.

To revive the industry outside of China, a critical role could be played by advanced smaller reactors that could bring about the cost reductions necessary for the industry to scale. The US is home to dozens of advanced fission reactor companies working on small reactors that have lower upfront capital costs and faster deployment.

Fusion reactors are also being developed, and while none of the private developers have yet produced more energy than is consumed, private sector interest in fusion has jumped remarkably. Nuclear startups have raised $6.7 billion since 2022 via venture capital and private equity, with almost two-thirds of that funding going to fusion startups.

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