Inside Big Tech's Nuclear Dream

We are going to need lots of energy and water for AI

Mar 03, 2024

‘We need more electricity,’ is the cry of today’s tech billionaires. Some say it openly, others are thinking about it and the rest are quietly trying to solve the issue. The root of the problem is a simple, ancient one: supply and demand.

The digitisation drive – broadband internet, smartphones, cloud computing and other technologies – has fundamentally increased the pressure on energy supplies.

The world consumed 25,500 terawatt-hours (short for one trillion watt hours/TWh) of electricity in 2022. But global demand is predicted to be between 52,000 and 71,000 TWh by 2050.

The rise of generative AI also adds more complexity to the issue. Data centres like Microsoft’s Iowa supercomputer train large-language models and then continue to run them off thousands of energy-hungry GPUs (the top of range chips being Nvidia’s export-controlled A100 and H100) and, in some cases, CPUs as well.

There is little publicly available research into the energy consumption of these ‘bit barns’. But one peer-reviewed paper predicts that global AI data centres will use between 85 to 134 TWh of electricity annually by 2027.

That would roughly match the current electricity consumption of countries like Sweden, Norway and the UAE. Unless that demand is met, expect blackouts, shed loading and other forms of energy rationing.

So what can be done? Elon Musk has long-championed renewables, namely solar, to help solve the problem. But other tech billionaires are exploring nuclear power as a way out of a future energy crisis.

Ranking	Country	Consumption (TWh)
—	WORLD	24,398
1	China	7,214
2	US	4,272
3	India	1,403
4	Japan	1,132
5	Russia	934
6	Canada	595
7	S'Korea 553
8	Brazil	550
9	Germany	539
10	France	463

Capturing The Sun

OpenAI’s Sam Altman and Amazon founder Jeff Bezos have both backed nuclear fusion companies. Unlike the pre-existing and proven nuclear energy technology, nuclear fission, nuclear fusion bonds two or more atomic nuclei together to produce a near limitless amount of energy without creating carbon emissions or harmful waste. It’s how the Sun and other stars are powered.

Here on earth the technology is still unproven, but a significant development came in 2022 when US scientists achieved a net energy gain by fusing atoms together with lasers.

Example of a nuclear fusion reaction via the IAEA

Each fusion company seems to be taking a different approach to make the technology both scientifically and commercially viable. Bezos has invested in Canadian-based GeneralFusion, while Altman has backed Helion to the tune of $373 million.

In a bold move and another show of confidence in Altman, Microsoft has committed to buying energy from Helion, which claims it will have its first power plant ready by 2028. The site will produce 50 megawatts (MW) “or greater” after a one-year ramp up period, the company has stated.

Google also has skin in the game, with an investment (alongside Japan’s Sumitomo Corporation) in startup TAE Technologies, while China’s Tencent is backing Oxford University spinout First Light Fusion, which is exploring a novel projectile-based approach to the nuclear fusion problem.

The Biden administration is also taking the prospect of nuclear fusion very seriously, with special climate envoy John Kerry unveiling an international strategy around the prospective energy source at COP28 in November.

“We are edging ever-closer to a fusion-powered reality. And at the same time, yes, significant scientific and engineering challenges exist,” he told delegates in Dubai.

The UK, which has its own nuclear fusion strategy, has also proven to be a hotbed of nuclear fusion testing with a range of public and privately backed initiatives in and around Oxford.

“I think a lot about how important cheap, safe, and abundant energy is to our future.” – Sam Altman, 2015

Altman’s Hedge

If fusion doesn’t take off, Altman has another iron in the nuclear fire, Oklo. Like Helion, the company went through the Y Combinator startup accelerator programme when Altman was president.

The business, which plans to create small nuclear fission power stations (15 megawatt electric and 50 MWe), is seeking to list on the New York Stock Exchange by merging with the AltC Acquisition Corp. Following shareholder approval in October, the entities have until 12 July 2024 to complete the SPAC, in a deal that values the business at $850 million.

Oklo expects that it will take under a year to build a powerhouse, with each site expected to be backed by customer power purchase agreements ranging from 20 to 40 years.

Fuel and construction will cost $70 million for a 15 MWe plant, which will sit on just two acres of land. At the heart of the proposition is ‘The Aurora’, a small fast reactor which is “designed to be inherently safe” and based on demonstrated technology.

It will use spent fuel from a retired US Government reactor, the EBR-II reactor which operated from 1965 to 1994. The US Nuclear Regulatory Commission has said that it is currently engaged in pre-application activities interactions for the Aurora

The Oklo team have identified data centre providers as potential customers, owing to the amount of energy they consume, as well as the defence and industrial sectors. The business claims its costs will be highly competitive with other clean energies, at a range of between $40 to $90 per megawatt hour (MWh).

If that seemed like a hard-to-achieve task, the business also plans to create a nuclear recycling business.

“Oklo is uniquely positioned to recycle nuclear waste, helping solve waste challenges while fuelling its reactors and cutting costs,” the company states on its website. “Oklo has also been selected for four U.S. Department of Energy projects totalling over $15 million to develop waste-to-energy fuel recycling.”

Oklo’s fast reactor approach differs from other small modular reactor designs which include thermal-neutron reactors, molten salt, and gas-cooled models. It is now planning to build two powerhouses in Southern Ohio.

Water Shortages

Even if nuclear fusion or fission gives the technology industry the energy breakthrough it needs, another important problem needs to be solved. That issue stems from how data centres stop their hardware from overheating and becoming inefficient.

There are two approaches to cooling the ‘bit barns’: by adopting air cooling systems, typically involving cooling towers, or by using a very common liquid – water.

It is the latter method that is increasingly used by data centres, with Google claiming that they use 10% less energy (and therefore generate 10% carbon emissions) than air-cooled data centres.

But data centres can become increasingly thirsty, with one paper estimating that the global AI demand could be accountable for 4.2 – 6.6 billion cubic metres of water withdrawal in 2027.

Crude example of how water and energy systems work for data centres

“This is very concerning, as freshwater scarcity has become one of the most pressing challenges shared by all of us in the wake of the rapidly growing population, depleting water resources, and ageing water infrastructures,” the researchers warned.

Venkatesh Uddameri, professor and director of the Water Resources Center at Texas Tech University, has estimated that the typical data centre uses about 3-5 million gallons of water per day. The same as a large town.

As for Microsoft’s supercomputer in Iowa, it reportedly used 11.5 million gallons of water a month for cooling. That represented 6% of West Des Moines’ total usage during peak summer months. Microsoft is seeking to expand the site.

Outside of the US and North Virginia in particular, which has become the world’s data centre hot spot due to its tax breaks and high connectivity, the Netherlands and Ireland, namely around the Dublin region, have become the top two locations for data centres in Europe.

South Dublin Council even went as far to ban new data centres, citing water shortage and energy concerns, only for the decision to be overturned by the national government.

“The centres are major energy users because a large centre may power tens to hundreds of thousands of computer servers, which also require air conditioning to avoid overheating. The centres are also heavy water users. Large centres have the energy and water needs of a small city,” The Irish Times warned in an editorial.

In the Netherlands there is more of a positive story. Google, which alongside Amazon, Microsoft and Meta has promised to be ‘water positive’ by 2030, is even using industrial canal water to cool its data centres instead of consuming drinkable/potable water. Amazon has also committed to using sewage/reclaimed water to help cool its data centres.

More innovations and careful energy and water management will be needed going forward as the global demand for digital services continues to increase.

“Over the next three years Microsoft will spend £2.5 billion ($3.2bn) to expand its next generation AI datacentre infrastructure, bringing more than 20,000 of the most advanced GPUs to the UK by 2026.
“The single largest investment in its 40-year history in the country, Microsoft will grow its datacentre footprint across sites in London and Wales and potential expansion into northern England,” Brad Smith, President of Microsoft.

But for all the talk of fancy frontier technologies, there may be one final very human problem for the technology companies: labour.

Because as they attempt to build the new renewable, nuclear and data centre infrastructure they will come up against a skills crisis in the construction industry both in the US and the UK.

Another irony of the ‘knowledge worker economy’ strikes again.

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