Amazon buys stake in nuclear energy developer in push to power data centres

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Amazon is buying a stake in US nuclear developer X-energy, as part of a collaboration with the company aimed at deploying small modular reactors to provide low carbon electricity to power its data centres.

X-energy said on Wednesday Amazon had agreed to anchor a $500mn fundraising, which would help the company finance the development and licensing of its new generation of SMRs, which it said are more efficient than large scale nuclear reactors.

Ken Griffin, founder and chief executive of Citadel, Ares Management Corporation, private equity firm NGP and University of Michigan also participated in X-energy’s fundraising, alongside Amazon.

Amazon will also support an initial X-energy SMR project in Washington state and a plan to bring more than 5 gigawatts of SMR-generated power online by 2039, which is enough to supply 4mn homes, said the company.

X-energy did not disclose the size of the stake Amazon had bought, but said the technology giant would take two seats on the company’s board of directors.

The investment by Amazon is the latest in a series of announcements by tech giants supporting nuclear projects, as they scramble to source low carbon power that does not threaten their climate pledges.

This week Google ordered six to seven SMRs from California-based Kairos Power, becoming the first tech company to commission new nuclear power plants. This followed an announcement by Microsoft last month that it would commit to buying 20 years’ supply of electricity from the mothballed US nuclear power plant Three Mile Island if Constellation Energy restarted the site.

X-energy, which is backed by chemical giant Dow, has developed a reactor that uses helium gas as a coolant rather than water to divert heat from the core. Each of its Xe-100 SMRs generates 80MWe and they can be scaled into a “four pack” 320MWe power plants, which is similar to the output from a typical gas power plant.   

The first Xe-100 SMR is being developed at a Dow manufacturing site on the Texas Gulf Coast, with financial support from the US government.

The US government is investing billions of dollars in companies seeking to build SMRs, which can be built in factories and assembled on site, in order to cut costs and speed up the construction of plants. However, private capital has until recently been difficult to raise because of the novel nature of SMR technology and concerns over high costs.

But surging power demand in the US because of the roll out of AI data centres is causing the technology sector to underwrite some nuclear projects, boosting the industry.

Amazon vice-president of global data centres Kevin Miller said X-energy’s technology would help the company achieve its climate pledge commitment to be net zero by 2040.

X-energy chief executive Clay Sell said there was a need to bring clean, safe, and reliable power on to the grid to “fully realise the opportunities available through artificial intelligence”.