Nuclear generation could help meet the power availability challenges faced by an increasing number of data center operators
Power demand from AI data centers in the United States could grow more than thirtyfold by 2035, reaching 123 gigawatts, up from 4 gigawatts in 2024, according to Deloitte. There are also challenges globally, with Goldman Sachs recently increasing its predictions for data center power demands to 175 percent of 2023 levels.
These power demands present both a challenge and an opportunity. Nuclear energy offers a potential solution both at a grid level – by providing more capacity generally - but also for specific on-site or collocated power generation for data centers. On-site, or localized, options would not only allow data centers to become more self-sufficient, but possibly even contribute excess power to the grid. For example, there are plans in the US to reactivate the Three Mile Island plant in Pennsylvania to meet Microsoft’s data center energy needs. Initiatives are also underway in other regions to develop nuclear power options for data centers and potentially ease regulatory frameworks.
The regulatory shift
A May 2025 executive order in the US is designed to make nuclear power a much more realistic option. The order authorizes the designation of certain AI data center infrastructure as critical defense facilities and enables access to High-Assay Low-Enriched Uranium (HALEU) for approved projects. The goal is to get several smaller nuclear reactors up and running in three years – something potentially inconceivable just a few years ago. However, challenges remain, and any organisation bringing new nuclear capacity online will still face higher regulatory and planning hurdles than most other forms of generation. Those regulations, and levels of support, also differ by region and could play a part in areas such as sovereign AI growth.
Small modular reactor options
Setting up on-site or collocated nuclear power generation obviously requires specialist technology and skills. Small modular nuclear reactors (SMRs) are among the most promising technologies for on-site use with data centers. A SMR typically has a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors, according to the International Atomic Energy Agency. SMRs may also have components that can be factory-made and then transported to site for assembly – an approach similar to the use of modularity and pre-fabrication for data center construction. Analyst group Gartner predicts that the first SMR-powered data centers will become operational by 2030.
Companies that can provide some of those capabilities include NuScale, which has design approval for a SMR. These can be built and shipped out to customers and can generate steam for turbines that can produce hundreds of megawatts of power. The systems have a relatively small footprint - around 35 acres compared to 500 for a traditional nuclear plant, according to the US government's Idaho National Laboratory.
Some designs currently being approved in the US shrink the SMR footprint even further. Deep Fission, a VC-backed startup, has applied to build 15 MWe SMRs. This approach includes burying the reactors approximately a mile underground to reduce land usage. Burying the reactors also eliminates the need for pressurized pumps, and when the reactor runs out of fuel, concrete can be pumped-in to seal the site.
Other providers include US-based nuclear provider Oklo, which recently signed a deal with Vertiv™ on the co-development of power and thermal solutions tailored for hyperscale and colocation data centers. By leveraging heat from Oklo's onsite power plants to drive Vertiv's cooling systems, the collaboration aims to enhance data center energy efficiency. By co-designing energy and thermal management from the beginning, and by deploying a site adjacent to customer demand, the companies plan to deliver a solution that simplifies deployment and enables improved performance and energy efficiency.
The case for nuclear
A case can be made for on-site nuclear power generation options to help bridge the gap that traditional power generation options may struggle to fill. While other forms of on-site generation should also be considered, SMRs can provide data centers with a stable baseline power supply while helping to reduce carbon emissions. Ultimately, nuclear generation will take time to bring online but it seems that innovative approaches to closing the power availability gap, and accelerating data center energy autonomy, will be required to deliver on the future potential of AI.
Energy autonomy accelerates is one of the technology trends reshaping data center infrastructure identified in Vertiv Frontiers.
