Tech companies are turning to small modular reactors (SMRs) to solve a critical problem: AI data centers consume massive amounts of power, and the grid cannot keep up. Amazon, Google, and Meta have secured billions in nuclear power deals to fuel their artificial intelligence infrastructure, signaling a major shift in how the industry will power the computing revolution ahead.

Why Are AI Data Centers Consuming So Much Power?

The numbers tell the story. AI-focused data centers now require approximately 80 megawatts (MW) of power, more than double the 32 MW that standard data centers consume. Looking ahead, energy demand from U.S. data centers is expected to jump from 17 gigawatts (GW) in 2022 to 35 GW by 2030. That's a massive increase in just eight years, and the existing power grid simply cannot support it fast enough. Grid interconnection delays stretch up to a decade, leaving tech companies searching for alternative solutions.

This energy crisis has forced major players like Google, Amazon, and Microsoft to rethink their power strategy entirely. Rather than waiting for the grid to catch up, they are investing directly in nuclear infrastructure. Small modular reactors, which produce up to 300 MW of power, offer a compact, reliable alternative that can operate independently of the grid.

How Do Small Modular Reactors Compare to Solar and Wind?

On paper, renewable energy sounds ideal for powering data centers. But when you look at the actual performance metrics, SMRs offer distinct advantages that make them more practical for mission-critical AI operations. The comparison reveals why tech companies are willing to invest so heavily in nuclear technology.

• Power Reliability: SMRs deliver a 95% or higher capacity factor, meaning they produce power nearly around the clock. Solar and wind farms, by contrast, achieve only 25 to 35% capacity factors because they depend on weather conditions.
• Land Footprint: An SMR facility requires approximately 50 acres to generate comparable power to a solar or wind farm, which would need hundreds of acres. This compact design allows for on-site deployment, reducing transmission losses that can range from 5% to 10% over long distances.
• Grid Independence: SMRs can operate as independent microgrids, providing uninterrupted 24/7 power. Renewable sources require grid connection for balancing and energy storage, adding complexity and cost.
• Scalability: SMRs use a modular design with units ranging from 15 to 50 MW, allowing power capacity to grow in phases as demand increases. This phased approach minimizes the risk of overbuilding and ensures efficient resource use.

While renewable energy often deploys faster (one to three years post-permitting versus five to ten years for SMRs), the reliability and energy density of nuclear reactors make them essential for running the continuous, high-performance computing workloads that power modern AI systems.

What Major Deals Are Already in Place?

The shift toward nuclear-powered data centers is no longer theoretical. Tech companies and energy developers are signing major agreements that will reshape the power landscape over the next several years. In June 2025, Amazon Web Services (AWS) and Talen Energy secured a 17-year power purchase agreement for 1.92 GW of electricity from the Susquehanna nuclear plant in Pennsylvania. The deal, set to last until 2042, represents a significant commitment to nuclear power.

AWS is investing $20 billion in Pennsylvania as part of this initiative and plans to explore building new small modular reactors within Talen's existing nuclear facilities. The project will transition to a front-of-the-meter setup, where electricity flows through the grid before reaching the data center. This arrangement is expected to be fully operational by spring 2026.

"Our agreement with Amazon is designed to provide us with a long-term, steady source of revenue and greater balance sheet flexibility through contracted revenues," said Mac McFarland, CEO of Talen Energy.

Mac McFarland, CEO, Talen Energy

Meta and Oklo are pursuing an even more ambitious project. In January 2026, the companies partnered to develop a 1.2 GW power campus in Pike County, Ohio. This site will house 16 Aurora Powerhouse reactors, each producing 75 MW, across 206 acres. Meta is providing prepayments to secure nuclear fuel and expedite Phase 1 of the project, which aims to deliver 150 MW. The first reactors are expected to be operational by 2030.

Google has also entered the nuclear space. In August 2025, the company signed the first corporate small modular reactor power purchase agreement with Kairos Power. The Hermes 2 project in Oak Ridge, Tennessee, will use Generation IV molten salt-cooled reactor technology to initially supply 50 MW to the Tennessee Valley Authority system by 2030, with plans to scale up to 500 MW.

How Are Companies Addressing Nuclear Challenges?

Despite the momentum, significant obstacles remain. The nuclear industry faces a limited supply of HALEU (high-assay low-enriched uranium) fuel and a thin talent pool in nuclear engineering. These bottlenecks could slow progress across multiple projects.

Oklo is tackling one challenge through innovation in thermal management. In July 2025, the company partnered with Vertiv to create integrated power and cooling systems. These systems will use steam from Oklo's nuclear plants to drive cooling solutions, improving overall efficiency. A pilot demonstration is planned for Oklo's deployment at Idaho National Laboratory.

"This agreement is about delivering clean power, energy-efficient cooling, and infrastructure solutions purpose-built for AI factories, data centers, and high-density compute," explained Jacob DeWitte, Co-founder and CEO of Oklo.

Jacob DeWitte, Co-founder and CEO, Oklo

Oklo's broader pipeline demonstrates the scale of industry confidence. The company has a master agreement with Switch for up to 12 GW of power and a 500 MW deal with Equinix. These efforts are backed by over $10 billion in investments, with a customer pipeline exceeding 14 GW thanks to agreements with leading tech firms and data center operators.

What Does This Mean for the Energy Market?

The shift toward nuclear-powered data centers signals a fundamental change in energy strategy. The SMR market, valued at $6.9 billion in 2025, is projected to grow to $13.8 billion by 2032. This growth will create new career pathways in nuclear energy and data center construction, offering opportunities for engineers, technicians, and skilled workers across the sector.

For data center operators, the message is clear: reliable, carbon-free power is no longer a luxury but a necessity. As AI continues to demand more computing resources, companies that secure long-term nuclear power agreements will have a competitive advantage. The race to build SMR-powered data centers is underway, and the winners will be those who can deliver the uninterrupted, high-capacity power that modern AI systems require.