The recent acquisition of power from a mothballed nuclear reactor at Three Mile Island in the US by tech giant Microsoft sent ripples through the energy industry. In the race for supremacy in the AI era, major tech players such as Alphabet, Amazon, Apple, Meta and Microsoft are willing to pay a hefty premium to secure uninterrupted power supplies.

Beyond reshaping the energy landscape, the move could breathe new life into the nuclear sector. Over the past decade or two, more than a dozen nuclear reactors have been shut down, driven by public concerns following the Three Mile Island disaster in 1979, Chernobyl in 1986 and Fukushima in 2011. Natural gas and renewable energy were promoted as safer and cheaper alternatives. Yet the soaring demand for clean electricity, particularly from data centres, is changing the equation. The exponential energy demand in the age of AI has been extraordinary. According to the Electric Power Research Institute, AI queries require about 10 times the power of traditional Google searches.

Tech companies are also looking for energy sources that can meet their substantial demand while aligning with net-zero emissions targets – driving the convergence of AI and nuclear power, and creating a new frontier in energy investments. The trend of tech firms ‘bringing their own power’ will see a massive increase in investment in private energy generation.

The market seems to approve – shares in Constellation Energy, which will revive Three Mile Island’s Unit 1 reactor, jumped by more than 20% following Microsoft’s announcement. Other utility companies such as Talen Energy and NextEra Energy, which have recently secured nuclear deals to support data centre customers or are considering restarting mothballed facilities, could also benefit.

But there’s a catch. While tech companies have the resources to pay above-the-norm prices for electricity, there are only so many dormant nuclear plants that can be revived. The real breakthrough will come when the private sector is willing to build and finance new plants. Though nuclear is relatively inexpensive to operate, its construction costs are daunting. There was hope that small modular reactors, which are quicker and cheaper to build, might provide a practical solution. But, despite different designs being in advanced stages of development, none has yet been licensed for construction in any OECD countries. In hindsight, perhaps SA abandoned its research into the Pebble Bed Modular Reactor too early – but that’s a story for another time.

Interestingly, while AI’s voracious appetite for power has made headlines, it may also contribute to energy abundance. AI is now being used to advance nuclear fusion technology, improving reaction conditions and predicting system behaviours to accelerate breakthroughs in energy production. This could lead to the production of vast amounts of clean energy and reshape our energy landscape.

This makes the recent news announcement from Climate Week in New York particularly timely. Fourteen major financial institutions, including the likes of Bank of America, Citi and Morgan Stanley, have pledged their support for tripling nuclear power by 2050 as part of the Net Zero Nuclear initiative. This aims to advance the role of nuclear energy in efforts to combat climate change.

I’m not advocating for any one technology – whether it be fossil fuels with carbon capture, low-carbon hydrogen, wind and solar with storage, or geothermal. Each has its strengths and challenges, and no single solution will dominate across all situations. Nuclear power is an important cog in this mix. But the alignment of interests here is compelling – tech companies need abundant, clean and reliable energy, and the combined efforts of the tech industry, financiers and energy companies could push nuclear technology forwards in ways that end up benefiting us all.

By Sasha Planting