This Week in Hyperscaling: Data Centers <3 Nuclear

When two energy dominance priorities meet, electrons fly

May 14, 2025

This week Google is back in the headlines with a deal to fund multiple site development projects for advanced nuclear. Elementl Power, a “tech-neutral” developer, will use the funding to perform preparatory work and pursue early site permits, but it doesn’t have an advanced nuclear design of its own. Instead, it will focus on tasks that must be completed regardless of which reactor design will ultimately be built at a given site. And since numerous designs are seeking approval from the Nuclear Regulatory Commission, getting a jump start on site work before picking a reactor design might pay dividends.

But wait, didn’t Google pick a design already? In October, the company announced plans for a 500 MW fleet of small modular reactors being developed by Kairos Power. The Kairos design is a fluoride salt-cooled high-temperature reactor currently in the demonstration phase. It’s not clear whether the Elementl site work will line up with an order book of Kairos reactors, but the potential is there.

Not to be outdone, Amazon Web Services came out with a competing announcement last October that it would invest $500 million in advanced nuclear company X-energy, which is championing a competing high-temperature gas cooled design with funding from the U.S. Department of Energy’s Advanced Reactor Demonstration Program (ARDP). Amazon also pledged funding to help the second deployment of that design with public power agency Energy Northwest.*

Amazon enlists nuclear small modular reactors in push for net carbon-zero

With Microsoft striking a deal to restart the shuttered Three Mile Island reactor and Meta issuing a Request for Proposals for nuclear development, the theme is clear: Highly reliable, emissions-free nuclear power is an ideal complement to data centers’ non-conforming load profile. And since AI dominance and nuclear dominance are top national security priorities, it is no surprise that they are increasingly intertwined.

Nuclear power also enjoys rare bipartisan support, which has been key to maintaining consistent policy expectations for projects that can take a decade from concept to connection. That’s why the industry was shocked to see nuclear tax credits phased out (alongside other incentives from the Inflation Reduction Act) in the initial Budget Reconciliation proposal released by the House Ways and Means Committee this week. Already, Republican Senators have expressed concerns about the approach—so expect to hear more about the strategic value of these projects to the buildout of AI infrastructure.

Big News:

Tech execs including OpenAI’s Sam Altman testified Thursday at a Senate Commerce hearing on “Winning the AI Race.” Permitting reform grabbed the headlines, but their testimony highlighted labor, the supply chain, and energy infrastructure. (“AI Giants Bring Their Energy Pleas to Congress,” Politico)

Big Deals:

Companies like Intersect Power are finding ways to get in between data centers and the grid—sometimes cutting the utility out of the deal. This class of energy developers is securing land and power first, then enticing data centers to build where they are. Interconnection optional. (“Power Companies Get Creative to Compete for Tech Deals,” Semafor)
Another developer, Prometheus Hyperscale, aims to capture a share of the data center market for Wyoming by capturing the state’s rich stores of natural gas—and capturing the carbon it emits. (“Net-Zero Data Centers in Wyoming? Hyperscaler Partnering with Natural Gas, Carbon Capture Firms,” EnergyTech)

Big Ideas:

Google released a great white paper on hyperscaling the grid with the innovation and labor investments necessary to meet the moment. Nuclear, geothermal, demand response, and carbon capture get top billing. (“Powering a New Era of American Innovation," Google)
Let’s use the fiber on transmission lines to detect environmental conditions and equipment failures. Prisma Photonics is working with utilities like the New York Power Authority and Great River Energy to pilot technology that uses existing fiber optics as a series of “microphones” to deliver real-time data about grid assets. (“A Shortcut to Making the Grid Safer and More Reliable: Beams of Light,” Canary Media)

(courtesy Prisma Photonics via Canary Media)

Big Challenges:

A lot of people really don’t like living near data centers. Look at Data Center Alley in Northern Virginia, where residents are protesting construction and complaining about “buzzing” facilities. (“NIMBYism Hits U.S. AI Infrastructure Buildout,” Semafor)

Big Questions:

Should FERC take a time-out on co-location guidance to allow the parties to work out an agreement? The energy regulator is working on a precedent-setting policy for how large loads should be accommodated within the framework of a shared transmission system, but merchant generators have called for settlement talks. Transmission owners, grid operators, and not-for profit utilities want FERC to press ahead. (“PJM, Utilities Urge FERC to Dismiss Call for Colocation Settlement Talks,” Utility Dive)
Is NVIDIA manufacturing literal “bargaining chips”? The New York Times explores the role U.S. semiconductors are playing in geopolitical negotiations. (“For Trump, It’s a New Era of Deal-Making With Tech’s Most-Coveted Commodity,” New York Times)

That’s all for this week! Thanks for reading, and please share this newsletter with others who might be interested.