With a $500m investment in X-energy’s small modular reactors, amazon aims to bring 5 gigawatts of nuclear power online in the US by 2039

Facing the growing challenge of energy scarcity and soaring demand from its data centres, Amazon is turning to nuclear power to fuel its cloud operations. On Wednesday, the tech giant announced a $500 million investment to support the development of small modular reactors (SMRs), a cutting-edge nuclear technology. This move forms part of Amazon’s long-term strategy to secure energy for its data-intensive operations and meet its climate goals.

SMRs are essentially compact, scalable nuclear reactors designed for faster deployment and easier integration into existing power grids. Unlike traditional large-scale nuclear plants, which can take decades to build and come with hefty price tags, SMRs offer the promise of quicker construction and flexibility. According to Amazon, these reactors could play a crucial role in powering its vast network of cloud services as it looks to reduce its carbon footprint.

Amazon’s major bet is on X-energy, a developer of advanced SMR technology. X-energy’s reactors, called Xe-100, are designed to generate 80 megawatts of power each, using fuel developed in collaboration with the US Department of Energy. Amazon’s Washington State project will initially involve four SMRs, generating 320 megawatts of power, with the potential to scale up to 12 reactors producing 960 megawatts. That’s enough power to serve roughly 770,000 US homes.

According to AWS CEO Matt Garman, this initiative will help Amazon reach its Climate Pledge goal of achieving net-zero carbon emissions across its operations by 2040. Garman noted that nuclear energy, with its reliable and carbon-free output, is key to sustaining the company’s energy needs as demand grows.

While SMRs are not yet commercially available, Amazon isn’t the only cloud titan looking to this technology for future energy needs. Earlier this year, Microsoft announced it had hired a director of nuclear technologies to develop SMRs for its datacenters, and signed an agreement with fusion energy startup Helion. Oracle and Google have also joined the nuclear race, securing deals with SMR developers to power their AI computing capacity.

However, the road to nuclear salvation is fraught with challenges. The regulatory landscape for nuclear energy remains complex, with public fears surrounding reactor safety, nuclear waste, and high costs. In fact, earlier SMR projects, such as NuScale’s planned Utah plant, have already been scrapped due to escalating expenses. Despite this, Amazon’s commitment to the technology marks a significant step toward integrating nuclear power into the energy grids of the future.

The four SMRs in Washington will be owned and operated by Energy Northwest, a consortium representing public utilities in the state, and are expected to be operational by the early 2030s. Amazon also has plans to explore SMR deployment in Virginia, near Dominion Energy’s North Anna nuclear station, which could add 300 megawatts of power to the datacenter-heavy region.

While SMRs offer a potential solution to the energy limitations faced by cloud providers, they are still years away from widespread deployment. Development timelines are long, and significant regulatory hurdles must be cleared before these reactors can be connected to the grid. High costs also remain a concern, with experts questioning whether SMRs will be financially viable enough to compete with other forms of clean energy.

Despite these challenges, Amazon is pressing forward with its nuclear strategy. If successful, its SMR deployments could provide a significant boost to its green energy credentials and secure the energy needed to fuel its massive cloud empire. As the world’s appetite for data grows, the nuclear option could become a vital tool in keeping the digital economy running smoothly.