The surge in artificial intelligence (AI) and data center buildout is intensifying the hunt for stable, low-carbon power sources, with nuclear energy increasingly seen as part of the solution.
Analysts believe that small modular reactors (SMRs) could play a pivotal role in addressing this issue.
“Their compact, modular design promises faster construction (3-5 years) and flexible siting near powerintensive industries or remote areas, making them particularly suited to meet the surging electricity needs of data centers and AI applications,” Bernstein’s Brian Ho said in a note.
Data centers consumed 415 terawatt-hours (TWh) of electricity in 2024, equal to 1.5% of global power use. That figure is expected to more than double by 2030 and could hit 4,000TWh by 2050, equivalent to Japan’s total current consumption.
“Data centers require high power loads and uninterruptible power all-year round,” Ho notes. “Data centers are also highly concentrated which makes reliance on the grid alone challenging. As such, this makes nuclear power a very compatible source of power for hyperscalers.”
U.S. companies have already announced 28GW of nuclear capacity dedicated to data centers in just the past two years. Strong policy momentum is also helping push nuclear back into focus, with China expected to raise its targets, the U.S. moving toward regulatory reforms, and the EU allocating capital to expand capacity.
SMRs, with outputs below 300MW, align closely with the 24/7 power requirements of most data centers. They can be manufactured in factories, shipped to sites, and assembled quickly, giving them a potential edge over conventional gigawatt-scale reactors. Their modular design could also lower financing risks and deployment costs over time.
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