After falling out of favor and languishing for years, nuclear energy is suddenly in vogue again.

Nuclear power plant operators have artificial intelligence to thank for this renewed interest. AI-intensive applications are consuming more and more energy, and the emergence of generative AI has prompted demand to rise even higher, fueling the need for datacenter growth.

Already, the energy required to run AI functions in datacenters is accelerating, with an annual growth rate between 26% and 36%. At this rate, in a mere three years, AI could be using more power than the entire country of Iceland used in 2021.

Datacenter spending on AI processors and accelerators hit a record $26.7 billion in Q3 2024, according to Futurum. By 2030, McKinsey is projecting global demand for datacenter capacity could more than triple, while Goldman Sachs Research estimates datacenter power demand will grow 160% by 2030.

Consequently, tech giants are turning to nuclear power to meet those needs in their datacenters. For example, Microsoft inked a 20-year deal with Constellation Energy, owner of the Three Mile Island nuclear power plant, the site of the worst commercial nuclear accident in U.S. history back in 1979. The reactor that will be reopened to power Microsoft’s datacenters was not involved in the accident.

Additionally, former Microsoft CEO Bill Gates’s company TerraPower invested $1 billion in a nuclear power plant that broke ground in Kemmerer, WY, in June 2024. Part of the impetus was so that “datacenters can serve the exploding AI demand,’’ Gates told NPR at the time.

Google has signed a deal with Kairos Power to build multiple small modular reactors (SMRs) to power its datacenters and offices. The first SMR is expected to be online by 2030.

“The grid needs new electricity sources to support AI technologies that are powering major scientific advances, improving services for businesses and customers, and driving national competitiveness and economic growth,’’ Google explained in a blog post. “This agreement helps accelerate a new technology to meet energy needs cleanly and reliably and unlock the full potential of AI for everyone.”

While not creating any new power generation, Amazon Web Services purchased Talen Energy’s Cumulus Data Assets, a 960-megawatt nuclear-powered datacenter in Susquehanna, PA, for $650 million.

Why nuclear power?

Nuclear energy tends to check most of the boxes sought for a modern power source: it is steady, not subject to weather conditions, and it does not spew carbon dioxide during operations, noted IEEE Senior Member Simay Akar. “As newer, smaller, safer reactor designs become increasingly practical for the first time, companies can seriously consider nuclear as part of their energy mix,” she said.

While renewable energy such as solar, wind, and battery storage have the potential to meet most of the increased power needs from datacenters at certain times of day, they don’t produce power consistently enough to be the only energy source for datacenters, according to Jim Schneider, a digital infrastructure analyst with Goldman Sachs Research.

“Our conversations with renewable developers indicate that wind and solar could serve roughly 80% of a datacenter’s power demand if paired with storage, but some sort of baseload generation is needed to meet the 24/7 demand,” Schneider wrote in a January 2025 Goldman Sachs report. He added that while nuclear is the preferred option for baseload power, the challenges of building new nuclear plants make natural gas and renewables more realistic short-term solutions.

These challenges include the costliness and time it takes to build nuclear power plants, and the difficulty of ramping up and down the power output of a nuclear power plant to match variable demand.

Still, nuclear energy is attractive because it has zero carbon dioxide emissions—although it does create nuclear waste that needs to be managed carefully. In addition, the scarcity of specialized labor, the challenges of obtaining permits, and the difficulty of sourcing sufficient uranium all pose a challenge to the development of new nuclear power plants, according to a Goldman Sachs report.

By the 2030s, however, new nuclear energy facilities and developments in AI could start to bring down the overall carbon footprint of AI datacenters.

Akar has a few concerns about nuclear power. While nuclear power doesn’t produce carbon emissions, it creates radioactive waste that must be stored in safety for several thousand years, she said. “We still do not have that perfect long-term solution, and that makes me uneasy. Then there is the question of safety: new technology, yes, is much safer, but any accidents are terrible in consequences. People are always going to be wary of this, and that makes it hard to rebuild trust in nuclear power.”

Nuclear power also isn’t as flexible as renewables. “Our energy grid is changing—we need power sources that can ramp up and ramp down quickly, and nuclear doesn’t work that way,’’ Akar said. “Solar, wind, and storage give us that flexibility while continuing to improve every year.”

All energy technologies have their tradeoffs, said Benton Arnett, senior director of markets and policy at the Nuclear Energy Institute, a nuclear energy trade association based in Washington, D.C. “Everything that is constructed has some construction risk, and any operating asset has some form of risk.”

A 2022 study by the Center for ESG and Sustainability found that when looking at the totality of risks in tandem with issues such as human health, accident percentages, and the effect of nuclear power on communities, “those impacts are really very low,’’ said Arnett.

What tech companies have realized, Arnett said, is that some lingering 1980s perception issues about nuclear power “were way overblown. The biggest mistakes that were made in energy planning in this country was that we stopped building nuclear in the 1980s.”

Blending nuclear power with sustainable sources

While acknowledging new advancements like SMRs “make nuclear energy more adaptable and safer than ever before,” Akar believes a combination of nuclear power and renewable sources is the ideal approach.

“The way forward, said and done, is not a choice that must be made among competing sources, but the development of a clean, more robust energy system that integrates renewables and nuclear,’’ she said. “Continuing our strong investment in solar, wind, storage, and emerging technologies will ensure that growing energy needs are met with the highest degree of sustainability possible.”

Renewable energy sources are “making incredible progress,” Akar added, but on their own, “they cannot always provide power around the clock. That is where nuclear [power] comes in: It provides a steady, reliable source of clean electricity to fill the gaps when the Sun is not shining or the wind is not blowing.”

The mix of renewables and nuclear will help to ensure a stable, carbon-free future, independent of fossil fuels as energy demands continue to rise, she said. “It is not about picking one over the other; it is working together in the building of a cleaner, resilient energy system.”

Is colocation the answer?

Because renewable energy sources typically require a much larger land footprint than natural gas or nuclear, they are more likely to be located far from the large cities that use much of the energy they generate, Goldman Sachs said. This makes their transmission costs higher.

Jacopo Buongiorno, a nuclear science and engineering professor at the Massachusetts Institute of Technology and director of science and technology at MIT’s Nuclear Reactor Laboratory, thinks colocating new datacenters and nuclear reactors “makes the most economic and environmental sense,” because it “drastically reduces the need for transmission capacity because the energy used by the datacenters is generated next door, so to speak.”

For example, a datacenter consuming 200 megawatts of electricity could save over $100 million a year just in transmission charges, Buongiorno said during a TED Talk.

Colocation also creates synergies around physical security and cybersecurity through the sharing of resources, maximizing protection, and reducing costs, he added.

However, Buongiorno acknowledged that “The integration of these systems is not trivial and will need serious engineering to satisfy requirements of reliability, safety, environmental sustainability, and efficiency.”

How to power AI in the years ahead

Akar and Buongiorno differ on where the power priorities should be as AI’s electrical demands continue to increase.

“Powering [AI] sustainability is not just a technical challenge, it’s a global imperative,’’ Buongiorno said. “Nuclear energy stands as a uniquely positioned solution offering clean, reliable, and scalable power for the datacenters that will drive AI forward as we confront the challenges of energy and climate in the 21^st century.”

He suggested reimagining nuclear energy “not as a relic of the past, but as a vital component of our shared future.”

Akar, on the other hand, stressed that the future of energy should be built on renewables. “We’ve got the technology, we’ve got the momentum, and we must scale up solar, wind, and storage to meet the rising power needs of the world sustainably,’’ she said.

“Nuclear can play a role in the transition, but the long-term goal must be a fully renewable, storage-backed energy system that will ensure both reliability and environmental responsibility.”

Esther Shein is a freelance technology and business writer based in the Boston area.