The climate for nuclear-driven AI is heating up, 2050 seen as crucial year for capacity

Nuclear energy is experiencing a global revival, driven by climate commitments and the surging power demands of AI technologies. As 31 countries pledge to triple nuclear capacity by 2050, the US faces both opportunity and challenge in meeting its share of this ambitious goal. This potential nuclear renaissance follows decades of regulatory obstacles that derailed industry progress since the 1970s, but recent policy shifts like the ADVANCE Act and billions in Department of Energy investments signal a turning point for nuclear power development across various reactor scales.

The big picture: The US must add approximately 200 gigawatts of nuclear power capacity to meet its commitment to triple nuclear energy by 2050, requiring development across microreactors, Small Modular Reactors (SMRs), and traditional large-scale facilities.

• After fifty years of regulatory burdens that increased costs and caused delays, the US nuclear industry is showing signs of revival through streamlined licensing and substantial government investment.
• Major technology companies including Microsoft, Google, and Amazon are increasingly turning to nuclear energy as a solution for powering their AI operations while meeting carbon reduction targets.

The roadmap: The US has established a phased approach with plans to deploy 35GW by 2035 and then accelerate to adding 15GW annually by 2040.

• More than 30 advanced reactor designs are currently under development in the US, offering improvements in efficiency, safety, and versatility compared to conventional reactors.
• While Small Modular Reactors are generating significant attention, ARK’s research indicates a diversified approach across reactor sizes will be necessary to achieve capacity goals.

Long-term outlook: Large-scale reactors will likely continue providing most of the reliable baseload power to the US grid, as they have since the 1950s.

• Focusing development efforts on a select few designs from the current pool of over 30 options could help reinvigorate cost efficiencies associated with Wright’s Law.
• The nuclear renaissance has potential implications beyond climate goals, potentially leading to lower electricity prices through economies of scale and technological iteration.