Amazon Web Services (AWS) has announced a significant $500 million investment in nuclear energy, focusing on small modular reactors (SMRs) across the United States. The move aims to address the increasing power demands from its expanding data centers, especially as AI-driven operations grow. This initiative is also part of Amazon's broader goal to achieve net-zero carbon emissions by 2040.
AWS has partnered with Dominion Energy, a utility provider in Virginia, to explore building an SMR near the existing North Anna nuclear power station. SMRs, smaller and quicker to build than traditional reactors, offer a promising clean energy solution, as they produce no carbon emissions. The project is a strategic move to secure reliable power for AWS's operations in Virginia, which is home to "Data Center Alley" in Northern Virginia-a hub responsible for approximately 70% of the world's internet traffic daily.
Matthew Garman, AWS's CEO, emphasized the growing urgency for alternative clean energy. "We see the need for gigawatts of power in the coming years, and there's not going to be enough wind and solar projects to meet that demand. Nuclear is a great opportunity, especially with SMRs advancing in safety and scalability," Garman stated. The partnership is expected to bring at least 300 megawatts of power to Virginia's data centers.
Governor Glenn Youngkin of Virginia praised AWS's investment, saying, "Small modular nuclear reactors will play a critical role in positioning Virginia as a leading nuclear innovation hub." AWS has also pledged to invest $35 billion by 2040 to develop data center campuses across the state, showcasing its long-term commitment to regional growth.
In addition to the Virginia project, AWS has signed an agreement with Energy Northwest in Washington State to develop four SMRs at the Columbia Generating Station. Under this partnership, AWS has the right to purchase power from these reactors, which will be built, owned, and operated by Energy Northwest. The collaboration could expand to include up to 12 reactors, further boosting Washington's energy capacity. The technology behind these SMRs will be developed by X-energy, a Maryland-based company. AWS's Climate Pledge Fund is leading a $500 million financing round for X-energy, joined by other major investors like Citadel founder Ken Griffin.
J. Clay Sell, CEO of X-energy, emphasized the importance of AWS's support, saying, "Amazon and X-energy are poised to define the future of advanced nuclear energy in the commercial marketplace." He highlighted that AWS's direct investment will accelerate the deployment of SMRs beyond what traditional agreements can achieve.
Amazon's move aligns with a broader trend in the tech industry, where companies like Google and Microsoft are also turning to nuclear energy to meet their growing power needs. Google recently signed a deal to procure energy from SMRs developed by Kairos Power, while Microsoft has revived a nuclear-powered facility to support its data center network.
Despite the promise of SMRs, there are still economic and regulatory hurdles to overcome. Licensing for nuclear projects remains complex, and concerns about scalability and safety persist. However, AWS's substantial investment sends a strong market signal that could accelerate SMR development. Industry experts believe this initiative could pave the way for broader adoption of nuclear energy in the tech sector.
Virginia's utility provider, Dominion Energy, is also exploring how nuclear power fits into its long-term energy strategy. The company's latest resource plan projects that low-carbon sources, including nuclear, will meet 80% of its energy needs over the next 15 years, indicating a significant reliance on nuclear technology to meet both corporate and state climate goals.
AWS's initiative is part of Amazon's larger commitment to achieve net-zero carbon emissions by 2040. However, the rapid growth of AI-powered data centers and the electrification of other sectors, such as electric vehicles, have complicated efforts to meet these goals. A recent report from Bain & Company warned that energy demand from AI data centers in the U.S. could surge by up to 26% by 2028, further straining grid resources.
Experts like Bain's Aaron Denman argue that nuclear power, particularly SMRs, is crucial to meeting these growing demands for clean, reliable energy. He stated, "Nuclear energy is one of the few options that can provide the scale and reliability needed to support the rapid expansion of AI infrastructure."
