How the AI boom got US utilities to refocus on nuclear energy, in one chart
Out with ESG, in with AI.
Keeping the semiconductor brain cells that facilitate artificial-intelligence applications firing on all cylinders requires a lot of energy.
The constraint on the AI boom right now, according to Microsoft, is that there simply aren’t enough data centers. Once that choke point is cleared, that’ll bring into even sharper relief the need for power to keep those energy guzzlers going.
This demand is crying out for supply, and Big Tech is increasingly turning toward the Nuclear Option.
Utilities companies have gotten the message loud and clear. In a sign of how the once dominant “decarbonization” theme — closely linked to the rise of ESG-centric investment mandates — has ceded ground to this new AI theme, US utility companies are talking far more about nuclear energy now than they are solar or wind energy.
The higher consistency of nuclear energy makes it a more appealing baseload source of power, especially in the case of smaller modular reactors where output can be tailored to better meet the needs of the tech giants.
Entergy went from mentioning nuclear zero times during its quarterly earnings update in August to talking up its “new nuclear” options and potential upgrades to existing assets a whopping 22 times, the most in the sector, in its October call. And executives at NextEra Energy mentioned “nuclear” as many times in their most recent quarterly call as the previous three years combined.
This ramp-up in mentions of nuclear by utilities companies comes despite Constellation Energy’s C-Suite dropping way fewer references to it compared to the first half of 2024, even as they announced plans to restart the Three Mile Island plant in Pennsylvania.
In some respects, this catch-up in commentary is long overdue. Nuclear has long been a much more important source of US net power generation than solar and wind!
