Nuclear Power for AI Market Size (2024 – 2030)

The Global Nuclear Power for AI Market is projected to grow at a compound annual growth rate (CAGR) of XX% from 2024 to 2030, reaching a whopping market size of USD XX billion by 2030.

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Nuclear Power form of energy has a much greater capacity than any other form of clean energy which includes solar, hydroelectric, thermal, and wind energy. Additionally, nuclear power plants also have a longer lifespan, adding to the long-term return on investment.

According to a study published by the University of California, Riverside in April 2023, ChatGPT by OpenAI consumes 500 millilitres of water for every 10 to 50 prompts, depending on the AI model deployment.

In the United States itself, it is anticipated that the nuclear energy’s demand may be increasing exponentially as technology companies contend to build enormous data centres to back their AI systems and other applications while somehow fulfilling the Net-Zero pledges.

Key Market Insights

• After a flat trajectory for nearly 20 years, power demand in the U.S. is spiralling. According to a recent report by Grid Strategies, a power sector consulting company, projected that the annual electricity demand in the U.S. is set to grow by 0.9%, in contrast to the 0.5% capacity addition to the grid as planned.

• According to a report by Fortune, the U.S. might need 40 new nuclear plants over the course of the next five years to power up all their data centers, crypto miners, and cannabis facilities that require power and electricity.

• According to a research report from International Energy Agency, the global electricity consumption is estimated to double from 460 terawatt-hours (TWh) in 2022 to more than 1,000 TWh by 2026.

• According to some reports, training AI models like ChatGPT or Google’s Gemini potentially generates as much as 626,000 pounds of CO2 per model.

Global Nuclear Power for AI Market Drivers

Clean energy initiatives are driving the need for Nuclear Power for the AI Market. 

There is a need for increasing new energy generating capacity worldwide, to replace already existing fossil fuel units, particularly the coal-fired ones, which emit large amounts of greenhouse gases, especially carbon dioxide, and to meet the amplified demand for electricity across various sectors.

The OECD International Energy Agency also published annual reports related to energy generation and consumption. In its World Energy Outlook 2023, the Net Zero Emissions by 2050 Scenario is described as a way to achieve a 1.5°C stabilization in the rise in global average temperatures. This Net Zero Emission anticipates a nuclear capacity upsurge to 916 GWe by 2050.

The growth in data centers is responsible for the increasing demand for Nuclear Power in the AI Market.

Data centers comprise about 2.5% of the U.S. total energy consumption. By the end of 2030, their power use is anticipated to triple as of now due to the increase in AI applications and cryptocurrency mines, according to a report published by the Boston Consulting Group in 2024. 

Additionally, the International Energy Agency had a resembling take, predicting that the data centres’ power demands would double between 2023 and 2026. AI and crypto are both energy-intensive activities. Training an AI model as well as feeding it prompts are data-driven processes that use a much higher amount of power. Similarly, in the case of crypto miners compete to be the first to solve complex problems that are rewarded with crypto because of which miners use more and faster computers resulting in intense energy demands.

One of the significant drivers of nuclear power for the AI market is its ability to provide a stable and cost-effective energy source.

Data centers require constant and reliable power to function competently. Nuclear energy's characteristics make it ideal to meet these needs. Unlike renewable sources nuclear power plants offer a continuous and stable energy output which is very crucial for data centers that cannot afford disruptions. Also, over the long term, nuclear power plants are more cost-effective. While the initial capital investment may be high, the operational costs are relatively low, and the fuel costs are stable.

The rapid decriminalization and legalization of Marijuana are leading to increased energy demands driving the need for Nuclear Power Plants as an energy source.

Young Americans’ prefer bud over booze, which has created remarkable growth in the weed market. About ½ of the U.S. now partake in some form of legal cannabis, recreational or medicinal. And growing the plant is an electricity-intensive activity. Cannabis demand lighting as intense as in a hospital operating room, a good functional air circulation, and a frequently changing temperature.

The National Conference of State Legislatures predicted that the marijuana industry used about 1% of the nation’s electricity in 2018. Today that number surely stands larger based on its popularity. After decades of America’s electricity demands being regular—due to economic shifts and more efficient power demands and generation techniques—it’s set to explode again. The North American Energy Reliability Council reported recently that energy demand was “rising faster than at any time in the past five or more years,” and predicted that 13 of the continent’s 20 power interconnection areas are at a high risk of a power shortfall leading to giant IT techs turning towards nuclear power plants to meet their energy requirements.

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Global Nuclear Power for AI Market Challenges and Restraints

The development of new nuclear power projects is a slow process due to several contributing factors, including safety concerns, public opposition, and high costs and investments associated with it.

As for the plants that were shut down and are planning on re-opening regulators and companies must now traverse a complex licensing process, oversight, and environmental-assessment procedure to reverse the plants’ decommissioning. Safety checks will be necessary to ensure that the plants can operate securely. It will not be an easy task to reinstate the safety regulations to meet safety standards.

Global Nuclear Power for AI Market Opportunities

Nuclear power plants with license extensions and positive government policies are opening up a plethora of opportunities.

Nuclear power reactors are experiencing long-term operating and aging management programs across several nations due to the burgeoning energy demands. Therefore, it is positively contributing to extending the reactor's lifecycle beyond what was initially planned.

Most nuclear power reactors were originally only estimated to operate for 25–40 years, but are now allowed to continue doing so. About 85 reactors in the United States had received license renewals from the NRC (Nuclear Regulatory Commission, United States), prolonging their operational lifespan from 40 to 60 years by the end of 2016. This opens up a pool of opportunities for new entrants in several sectors to invest in these nuclear power plants.

Key End Users

• Google – Partnered with Kairos Power for small modular nuclear reactors to power AI data centres.

• Amazon – AWS backing nuclear power projects in the U.S. to support AI infrastructure.

• Microsoft – Exploring nuclear power integration in data centres and advanced nuclear technologies.

• Meta (Facebook) – Investing in nuclear power to fuel AI-driven operations.

• Tesla – Exploring nuclear power for AI data centres as part of broader energy strategies.

GLOBAL NUCLEAR POWER FOR AI MARKET REPORT COVERAGE:

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SEGMENTATION ANALYSIS

Nuclear Power for AI Market Segmentation - By Reactor Type

• Pressurized Water Reactor and Pressurized Heavy Water Reactor

• Boiling Water Reactor

• High-Temperature Gas-Cooled Reactor

• Liquid-Metal Fast-Breeder Reactor

• Other Reactor Types

The pressurized water reactor and pressurized heavy water reactor segment is the chief contributor to the total market and is estimated to grow at a steady CAGR of 5.05% during the forecast period, 2024-2030. The most commonly used nuclear reactor design globally is the Pressurized Water Reactor (PWR) because high-pressure water is transported directly to the core reactor and then heated by the energy the core reactor releases. Heat is emitted due to atomic fission, which is then used to produce steam. The steam is then used to produce electricity as the central turbine unit turns the turbine generator to produce electricity due to heat exchange between the water coolant and water moderator.

The Boiling Water Reactor segment is the fastest-growing segment during 2024-2030. It is analogous to a pressurized water reactor, which generates steam using light water. In a boiling water reactor, the core reactor directly heats the water, producing steam. Steam is then exhausted to the condenser, which condenses the steam to water, similar to PWR.

Nuclear Power for AI Market Segmentation - By Region

• North America

• Europe

• Asia-Pacific

• South America

• Middle East & Africa

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North America is the leading contributor and holds the majority of the market share in 2023. Nuclear energy is a crucial subject in North America. With over 772.2 TWh of the world's nuclear power generated in 2023, almost 30%, the United States is one of the largest nuclear power producers in the world.

In Europe, nuclear energy consists of over 25% of the energy mix in 2023, making it one of the major contributors globally. France acquires up to around 70% of its total electricity for consumption from nuclear energy, while Ukraine, Slovakia and Hungary get about half from nuclear energy.

China however will have the most all-encompassing new-build nuclear energy program globally by 2025. China currently has the nuclear generation capacity to produce 395.4 TWh. The tough project pipeline is estimated to advance the outlook for the Chinese nuclear power market.

COVID-19 Impact Analysis on the Nuclear Power for AI Market

There was no obligatory shutdown of nuclear power reactors due to COVID-19 on the labour force or supply-distribution chains, according to various reports from the International Atomic Energy Agency. According to the IAEA, safety and security at plants worldwide were ensured even as the pandemic affected them in numerous ways, including their power outages and maintenance agendas.

Additionally, the measures undertaken by government bodies globally to combat the effects of COVID-19 resulted in a decline in electricity consumption in some countries during lockdown – typically reductions of 10-25% of estimated power demand. Therefore, it has an almost negligible impact on Nuclear Power for the AI Market.

Key Trends

• Google's deal with Kairos Power is part of its broader commitment to carbon-free energy. The company aims to power its AI operations with nuclear energy, which provides stable, round-the-clock power alongside its climatic goals. Some reports propose that by 2030, data centers accommodating AI models like Google’s Gemini will make up over 9% of the nation’s overall energy demand. A 2024 forecast by Goldman Sachs predicted that up to 60% of the additional energy demand may be met with fossil fuel. Google, which has vowed to reach net zero by 2030, is hopeful this deal can help fill that gap.

• Microsoft's revival of the Three Mile Island reactor is part of its strategy to source sustainable energy for its AI data centers. Giant tech companies are under constant pressure to find alternative energy sources to power data centers for modern-day cloud computing and AI applications. They have benefited greatly from an increased interest in generative AI applications such as OpenAI's ChatGPT which has also led to an unintended large spike in energy required.

• Furthermore, the development of SMRs opens up a new pathway to fast-track nuclear deployment due to their simple and robust design. The compact size and modular design can decrease construction timelines, allowing quick deployment in more places to accelerate the commercialization of nuclear energy by establishing the technical and market possibility of a solution.

Key Players

1. Électricité de France (EDF)

2. Kairos Power

3. Southern Company

4. Ontario Power Generation (OPG)

5. Korea Hydro & Nuclear Power (KHNP)

6. Rosenergoatom (a subsidiary of Rosatom)

7. China General Nuclear Power Group (CGN)

8. Talen Energy

9. Constellation Energy

10. PSEG (Public Service Enterprise Group)

Recent Developments

• June 2024 - According to the New York Times, Microsoft is backing TerraPower, a nuclear power startup developing a reactor that is more compact and put together more quickly than conventional nuclear power plants.
• September 2024 - Microsoft partnered with Constellation to revive a defunct reactor at the Three Mile Island nuclear power plant in Pennsylvania, aiming to meet the energy demands of its AI operations.
• October 2024 – Google officially announced a groundbreaking deal with Kairos Power, a California-based small nuclear reactor startup to commission the development of 6 or 7 reactors that could potentially add 500 megawatts of clean energy to the US electrical grid by 2035.
• July 2024 - Amazon announced a mega investment in nuclear power plant of a $500 million deal with Dominion Energy for the development of a modular nuclear reactor at North Anna nuclear power station.

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