AWS just went nuclear – and more hyperscalers could follow

  • The data center industry is facing power constraints in major markets

  • With the grid unable to keep up, T5’s COO believes data centers will need to generate their own power

  • Micro-nuclear technology is currently used by the U.S. military and could be a good option

In a surprise move, Amazon Web Services (AWS) scooped up Talen Energy’s nuclear-powered Cumulus data center campus in Pennsylvania for a cool $650 million this week. But while the news itself is notable, T5 COO Tom Mertz told Silverlinings the move is indicative of a trend that could soon sweep the data center industry due to growing power demand.

McKinsey recently predicted that data center power consumption in the U.S. will rise from 17 gigawatts (GW) in 2022 to 35 GW in 2030. The growth is being driven in part by the proliferation of higher-power chips used for high performance workloads like artificial intelligence (AI). Mertz said power consumption per rack has jumped from 10 kilowatts or less to 60 kilowatts or more, pushing overall campus capacity from 50 megawatts or less to 100-plus megawatts over the past five years.

Want to learn more about cloud and multi-cloud? Register for our free Cloud Cover virtual event on March 19-20, 2024, today.

As we’ve noted before, some key data center hubs – like Ashburn in Northern Virginia – are already tapped out on the power front and no longer accepting requests for additional capacity. Mertz pointed to power as the “number one challenge” facing the industry today. And he would know. T5 works with hyperscalers and other customers to develop, build and run both its own and third party data centers in the U.S. and Europe.

“Long-term, the industry is going to have to figure out how to develop their own power on their own campuses,” Mertz said. “I don’t think the grid can keep up with the demand that we’re seeing.”

Enter nuclear power.

While it might be nice to think that data center companies will chase sustainable options like wind, solar, hydroelectric and geothermal power to generate their own power, both Mertz and McKinsey indicated those are likely to only serve as supplements to other power sources. That’s in part because of intermittent availability issues with technologies like solar and wind power (according to McKinsey) as well as the sheer amount of power that data centers will require in the future (according to Mertz).

Case in point, AWS is eyeing plans to develop the data center it just acquired from Talen into a whopping 960 MW campus, pending local approvals.

“When you start talking about driving gigawatts of power, you just can’t put up enough windmills or hydro dams or geothermal to support that type of growth,” Mertz said. “So, I think you’re going to have to offset some of the demand with those sustainable-type power supplies, I just don’t think you’re going to see the data center industry in general supported by nothing but renewable energy.”

Nuclear power, however, could be the answer.

Mertz noted a small scale version of the technology is already used by the U.S. Navy to power submarines and aircraft carriers. So, it’s not entirely a stretch to believe that data center operators could look to leverage something similar. Microsoft already appears to be exploring this route to help fuel its AI ambitions, if a recent job posting spotted by several outlets and a policy brief published by the company late last year are any indication.

But as one might expect, nuclear power comes with a unique set of hurdles that data center players will need to overcome.

“That type of technology I do believe will emerge in the data center space,” Mertz concluded. “The challenge with nuclear though is the regulatory issues that go along with it and the time associated with the approvals in order to do that. But I do think that’s probably the most logical source of clean energy.”