Artificial intelligence is no longer a theoretical problem for the power grid; it is a construction site. Data centers focused on AI are consuming electricity at three times the rate of global electricity demand growth, forcing utilities and tech companies to move beyond decades of talk about small modular reactors (SMRs) and actually build them. Canada just lowered a 1,050-ton foundation slab into the ground in Ontario, marking the start of the Western world's first grid-scale SMR, while the United States is running multiple advanced reactors critical and the pipeline of conditional agreements between data center operators and SMR projects has nearly doubled in a single year.

Why Is AI Suddenly Making Nuclear Real?

The numbers tell the story. In 2025, electricity demand from data centers surged by 17 percent, but AI-focused data centers climbed even faster, outpacing global electricity demand growth of just 3 percent. The International Energy Agency's latest report, published in April 2026, projects that electricity consumption from data centers will double by 2030, while power use from AI-focused facilities is poised to triple. That trajectory is colliding with a hard constraint: the power grid cannot expand fast enough to keep up.

Tech companies have responded by becoming the largest corporate buyers of renewable energy and, more significantly, by becoming a major source of momentum for nuclear and advanced geothermal industries. The pipeline of conditional offtake agreements between data center operators and small modular reactor projects grew from 25 gigawatts at the end of 2024 to 45 gigawatts today, indicating that AI's energy demands could accelerate the commercialization of new energy technologies. In other words, AI is not just creating demand for nuclear; it is creating the financial incentive for nuclear to finally move from the drawing board to the construction site.

What Does a Grid-Scale SMR Actually Look Like?

On April 22, 2026, Ontario Power Generation lowered a 1,050-ton foundation slab into a 115-foot shaft at the Darlington site east of Toronto, officially beginning construction of the first GE Vernova Hitachi BWRX-300 in the Western world. The basemat is not just concrete; it is a steel-and-concrete sandwich called Diaphragm Plate Steel Composite, welded together in one piece and assembled modularly on site, a first for Canadian reactor construction.

The BWRX-300 is deliberately conventional. It is a 300-megawatt boiling water reactor, about one-third the output of large nuclear units, that cools itself by natural circulation instead of relying on electric pumps. The entire power block fits within about two soccer fields, and the developer says build time drops to 24 to 36 months for repeat units once the first one works out the kinks. It runs on standard low-enriched uranium, the same fuel feeding most of the world's reactors, which sidesteps the high-assay low-enriched uranium (HALEU) bottleneck that is currently strangling half the advanced-reactor industry.

The first unit is not expected to generate electricity until the end of 2030, but the concrete is in the ground now, which is further than any Western country has gotten with grid-scale SMR technology before. Ontario Power Generation has budgeted CAD 6.1 billion for the first reactor, plus another CAD 1.6 billion for shared infrastructure, and is planning four units total at the Darlington site, with a full program cost of CAD 20.9 billion (about USD 15 billion) in 2024 dollars.

How Is the U.S. Taking a Different Path?

While Canada is building a single large SMR, the United States is pursuing a broader strategy that includes both advanced reactors and microreactors. The Department of Energy's Reactor Pilot Program, launched in August 2025, set an aggressive goal of having at least three reactors critical by July 4, 2026. That deadline was met. Multiple reactors achieved zero-power criticality, including Aalo Atomics' Aalo-X at Idaho National Laboratory on July 4, Antares Nuclear's Mark-0 on June 4, and Valar Atomics' Ward 250 in Utah on June 18.

The U.S. approach reflects a broader policy shift. In May 2025, President Trump signed four executive orders aimed at quadrupling U.S. nuclear capacity from 94 operating reactors generating roughly 100 gigawatts to 400 gigawatts by 2050. The Department of Energy reformed its regulatory processes in 90 days while maintaining safety standards, removing unnecessary approvals and redundancies, and allowing private companies to propose their own methods for meeting requirements rather than prescribing exact solutions.

"I don't think we've ever had a busier year in the Office of Nuclear Energy, and it's probably been decades since we've had this much momentum within the overall U.S. nuclear industry," said Michael Goff, principal deputy assistant secretary for the U.S. Department of Energy's Office of Nuclear Energy.

Michael Goff, Principal Deputy Assistant Secretary, U.S. Department of Energy Office of Nuclear Energy

The U.S. has also made progress on fuel supply. X-energy's TX-1 facility, currently under construction, is the first commercial-scale fuel fabrication facility in the United States focused on high-assay low-enriched uranium fuel to receive Nuclear Regulatory Commission approval. TerraPower, a company backed by Bill Gates, received the first construction permit for a commercial Generation IV reactor from the Nuclear Regulatory Commission.

What Are the Physical Bottlenecks Slowing Everything Down?

Despite the momentum, AI's energy demands are running into real-world constraints. Supply chains for energy technologies such as gas turbines and transformers, as well as for advanced chips and IT components, have tightened over the past year. The swelling pipeline of data center projects is straining planning and regulatory systems, holding up grid connections and other necessary approvals.

Data center operators are responding by advancing projects with on-site natural gas-based power generation, mainly in the United States, but these projects face technical hurdles. AI data centers have rapid and large swings in demand, and meeting their power needs reliably can stretch the technical capabilities of on-site gas plants. On-site battery storage is becoming a critical technology for the next generation of AI data centers, which could make them an asset to grids with the right incentives.

How Can Policymakers and Industry Address These Challenges?

• Grid Integration: Policymakers have tools to manage affordability issues, including policies that encourage the smart integration of data centers into grids and incentivize data centers to operate more flexibly, preventing large, concentrated power loads from triggering unnecessary new generation assets.
• International Partnerships: The U.S. Department of Energy is strengthening international partnerships to ensure allies and partners have access to American nuclear technology, preventing other countries from setting global standards for safety, security, and nonproliferation.
• Fuel Cycle Sustainability: Both the front and back ends of the nuclear fuel cycle need investment to ensure adequate supply for advanced reactors and the existing fleet, while also developing capabilities to close the fuel cycle and reduce long-term waste concerns.
• Workforce Development: Executive orders have focused on ensuring the strength of the nuclear industrial base and workforce, recognizing that scaling nuclear production requires trained engineers, technicians, and support staff.
• Regulatory Efficiency: Streamlining approval processes without compromising safety standards, as the U.S. Department of Energy demonstrated by reforming its processes in 90 days, can accelerate deployment of first-of-a-kind reactors.

The International Energy Agency has recognized the broader implications. The organization announced it would launch a new platform for government and industry to discuss energy and AI issues regularly, acknowledging that collaboration between policymakers and the energy and tech sectors remains crucial.

"Early on, the IEA recognised that there is no AI without energy, and countries that provide secure, affordable and rapid access to electricity will be one step ahead. Now, we see that while AI is still an energy taker, it is also becoming an energy maker, driving forward innovative solutions like next-generation nuclear reactors, flexible data centres and long-duration energy storage," said Fatih Birol, IEA Executive Director.

Fatih Birol, Executive Director, International Energy Agency

What Does This Mean for the Energy Sector's Future?

The convergence of AI's energy demands and nuclear's technical readiness is creating a moment that the industry has been waiting for. For decades, small modular reactors existed as a promising design that nobody had actually built at grid scale in the Western world. Now, the concrete is in the ground in Ontario, multiple advanced reactors are running in the United States, and the financial incentives are aligned. AI data centers are not just creating demand for nuclear; they are creating the urgency and the capital to make it happen.

However, the challenge is not just technical or financial. The energy sector as a whole is not yet taking full advantage of AI's potential to optimize energy use. The International Energy Agency found that proven applications of AI could help firms in energy-intensive industries reduce their energy costs by 3 to 10 percentage points, but the lack of sufficient digital skills and data availability are emerging as key barriers to adoption. In other words, while AI is driving nuclear forward, AI itself could be making the entire energy system more efficient, but only if the sector invests in the skills and infrastructure to deploy it.

The next few years will determine whether this momentum translates into a sustained shift in how the world powers itself. Canada's first SMR is not expected to generate electricity until 2030, and the U.S. reactors running critical now are still in demonstration phases. But the foundation is literally in the ground, and the financial incentives are real. For the first time in decades, nuclear is not a future promise; it is a construction site.