"Secure AI Power" Big Tech Investing in Nuclear Power... Amazon Signs Contracts with 3 Sites

The world's largest e-commerce company, Amazon, has entered the development of small modular reactors to secure the massive power needed to operate artificial intelligence (AI) data centers. This news was confirmed just two days after Google, which is competing in AI development, signed a power purchase agreement with a U.S. small modular nuclear reactor company.

[Image source=Reuters Yonhap News]

On the 16th (local time), Amazon announced that it had signed a contract with Dominion Energy, an energy company in Virginia, to develop small modular reactors. Dominion already supplies about 3,500 megawatts (MW) of electricity to Amazon's 452 data centers in Virginia. In addition, Dominion plans to develop small modular reactors near its existing nuclear power plants. This is expected to secure more than 300 MW of power.

Along with this, Amazon also signed a contract with Energy Northwest, a public power utility located in Washington state, to support the construction of four small modular reactors by Energy Northwest. These reactors are initially expected to produce about 320 MW of power, with plans to increase total capacity to 960 MW later. Amazon is also investing in X-Energy, which supplies advanced reactors and fuel to the reactors being built by Energy Northwest. According to U.S. economic broadcaster CNBC, Amazon is investing more than $500 million (approximately 680 billion KRW) through contracts with these three energy companies.

Matt Garman, CEO of Amazon Web Services (AWS), the global market leader in cloud services, stated in a press release, "One of the fastest ways to address climate change is to transition to carbon-free energy sources," adding, "We will encourage the construction of new nuclear technologies that will produce energy for decades to come." Earlier in March, Amazon had signed a power purchase agreement with Talen Energy.

Amazon's announcement came just days after Google revealed it had signed its first nuclear power purchase agreement. On the 14th, Google announced a contract to purchase small modular reactor energy from U.S. startup Kairos Power. As a result, Google will secure a total of 500 megawatts (MW) of power from seven reactors operated by Kairos in the future. The Associated Press noted, "Amazon's investment in small modular reactors was announced just two days after Google made a similar announcement," highlighting that "both big tech companies are seeking new carbon-free power sources to meet the rapidly increasing power demand caused by AI and data centers."

The reason big tech companies are focusing on nuclear power is the judgment that the currently available power supply cannot reliably support the power demand of AI data centers operating 24/7. According to the International Energy Agency (IEA), total power consumption related to AI is expected to surpass 1,000 terawatt-hours (TWh) by 2026, more than doubling compared to 2022. One TWh is enough to supply power to 70,000 households for one year.

Previously, Microsoft (MS) also signed a 20-year power purchase agreement with Constellation Energy, the largest nuclear power company in the U.S. Sam Altman, CEO of OpenAI and known as the "father of ChatGPT," is investing in Oklo, a small modular reactor developer aiming for operation by 2027.