Solving AI’s Power Problem with Nuclear Energy
Q&A with Bob Johnson, VP Analyst, Gartner —
Global enterprises are facing rapidly increasing electricity consumption driven by AI and generative AI (GenAI), which threatens to disrupt energy availability and lead to data center power shortages.
Gartner predicts that power shortages will restrict 40% of AI data centers by 2027.
Small modular nuclear reactors (SMRs) are emerging as a viable long-term solution to this looming power crisis. Gartner predicts the first SMR-powered data centers will become operational by 2030, using sustainable power fully independent of utility power distribution grids.
We spoke with Bob Johnson, VP Analyst at Gartner, to understand the role that SMRs will play in addressing the power problem and what organizations can do now to get ahead of the game.
What role will SMRs play in future energy generation to solve the power crisis?
Current demand looks set to exceed the ability of utility providers to expand their capacity fast enough to support the exponential growth of GenAI. Nuclear energy, specifically SMRs, provides a viable answer to the question of “What to do when electricity demand exceeds supply?”
Gartner estimates the power required for data centers to run incremental AI-optimized servers will reach 500 terawatt-hours (TWh) per year in 2027, which is 2.6 times the level in 2023.
SMRs ensure independence from grid power fluctuations by providing dedicated on-site power for large data centers. These advanced nuclear fission reactors offer reliable, uninterrupted power without emissions, making them a key solution for transitioning from fossil fuels.
Designed with a wide range of power-generating capacities, SMRs have components that can be factory-made and transported for assembly on-site. This offers data centers location flexibility without reliance on commercial power availability.
Despite being years away from regulatory approvals and construction, SMRs represent a very real long-term solution to power availability issues. Government actions promoting SMRs will accelerate their development, certification and availability for data center operations.
Why are SMRs a better long-term solution over renewable resources?
Data centers require 24/7 power availability, which renewable power such as wind or solar cannot provide without some form of alternative supply during periods when not generating power.
This is where nuclear energy comes in, offering reliable, low-carbon stability at predictable prices. SMRs promise these benefits, with the advantages of shorter approval and construction times, lower build and operating costs, and more siting options.
SMRs have the potential to contribute significantly to improving energy security and managing energy costs, while eliminating energy purchase emissions and enterprise carbon footprint — especially for power hungry and energy intensive industries like data centers.
Diversifying energy sources with SMRs will provide additional resilience against potential power outages and capacity issues. Unlike traditional nuclear power plants, SMRs are being designed to significantly lower costs while increasing safety, versatility, and efficient reuse and disposal of fuel.
What are the main challenges with adopting SMRs?
Although current SMR programs are encouraging, headwinds must be addressed. Foremost is the issue of what to do with nuclear waste. SMRs produce radioactive waste that must be handled, although the actual quantity is surprisingly low. Potential solutions include reprocessing byproducts into usable fuel, making it significantly less radioactive and more easily disposable, or storing in special underground facilities.
Another challenge is the time to develop SMRs and their initial high costs. These reactors may not be generally available for 8-10 years. Early models will be expensive, costing significantly more than competing power generation technologies. However, costs will come down with extensive use, just like it did with wind and solar power. Initially, SMRs will need some kind of financial incentives or subsidies to make them cost competitive.
In addition, the SMR concept remains unproven and confined to research, with current projects limited to existing nuclear sites and no grid connections. Early projects will require sustained government support due to these uncertainties.
What should organizations consider now to evaluate SMRs?
Now is the time to become familiar with what it will take to construct an SMR-based dedicated power station for a data center or cluster of data centers. Gartner recommends planning for future data center power options by including provisions for SMR deployment as a dedicated site power solution in long-term objectives.
It is important for organizations to regularly monitor SMR technology readiness, provider development activities and regulatory changes, to understand how they might impact future data center operations and energy sourcing. At the same time, they should assess the various SMR alternatives and the strengths and weaknesses of each.
Gartner clients can learn more in “Predicts 2025: Challenges Shaping the Future of Cloud Adoption” and “Emerging Tech: Small Modular Reactors Reduce Data Center Vulnerability.”
About Gartner
Gartner (NYSE: IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization’s mission-critical priorities. To learn more, visit www.gartner.com.
Source: Gartner