Amazon just announced it’s making big investments in nuclear power. Here’s why

Aiming to address the voracious data processing appetite of emerging artificial intelligence platforms and the attendant power needs of the massive data centers that drive AI tools, Amazon announced a trio of nuclear power related partnerships on Wednesday, including a $500 million deal with U.S. energy giant Dominion Energy.
While Seattle-based Amazon is best known for its dominant position as an online retailer, the company has been in the cloud computing space since 2006 with Amazon Web Services, a subdivision that has since become a leader in its category. It is reportedly generating around 17% of Amazon’s overall revenue, which hit $575 billion last year.
Amazon is bullish on renewable and carbon-free energy sources, recently announcing it had matched all of the electricity consumed across its global operations — including data centers, corporate buildings, grocery stores and fulfillment centers — with 100% renewable energy. On the path to that goal, the company says it has become the largest corporate purchaser of renewable energy in the world for four years running and has invested billions of dollars in more than 500 solar and wind projects globally, which together are capable of generating enough energy to power the equivalent of 7.6 million U.S. homes.
Now, it’s turning some of those investment dollars toward new nuclear energy technology.
“Today, we’re announcing that we’ve signed three new agreements to support the development of nuclear energy projects — including enabling the construction of several new small modular reactors,” the company said in a press release. “SMRs are an advanced kind of nuclear reactor with a smaller physical footprint, allowing them to be built closer to the grid. They also have faster build times than traditional reactors, allowing them to come online sooner.”
The agreements follow earlier nuclear energy deals struck by Amazon cloud services competitors Google and Microsoft, with all three companies continuing to build out their respective data center infrastructure to help support big investments in AI development.
A recent report from McKinsey & Co. helps illustrate the seismic impacts that accelerating data center development is having on the U.S. power generating grid.
According to the McKinsey analysis published last month, the U.S. is expected to be the fastest growing market for data centers, going from 25 gigawatts of demand in 2024 to more than 80 gigawatts of demand in 2030. McKinsey notes that while AI development is a primary driver of this increased need for processing power, continued increases in data, compute and connectivity from digitalization, and cloud migration are other factors contributing to heightened demand.
And meeting this demand, the report notes, will require considerably more electricity than is currently produced in the U.S.
“This spike in electricity needs is unprecedented in the United States, where power demand in the aggregate has barely grown since 2007,” the report reads. “Data center load may make up between 30 and 40 percent of all net new demand added until 2030, with demand growth arising from domestic manufacturing, electric vehicles, and electrolyzers.”
Amazon’s new deals include an agreement with Energy Northwest, a consortium of state public utilities, to develop four advanced SMRs in Washington state that are expected to generate roughly 320 megawatts of capacity for the first phase of the project, with the option to increase to 960 MW total — enough to power the equivalent of more than 770,000 homes.
Amazon also invested in X-energy, a developer of next-generation SMR reactors and fuel. X-energy’s nuclear reactor design will be used in the Energy Northwest project.
In Virginia, the state with the biggest concentration of data centers in the country, Amazon struck a deal with Dominion Energy to explore the development of an SMR project near Dominion’s existing North Anna nuclear power station. Amazon says the project will bring at least 300 megawatts of power to the Virginia region, where Dominion projects that power demands will increase by 85% over the next 15 years.