Google’s parent company, Alphabet (GOOGL), plans to use small modular nuclear reactors to power its artificial intelligence (AI) models and applications.
The Silicon Valley-based company has signed the first corporate agreement to source electricity directly from small nuclear reactors. The agreement that Alphabet has signed is with privately held Kairos Power and will help the technology giant meet its future energy needs.
Kairos Power isn’t expected to have its first small modular nuclear reactor operational until 2030. However, Alphabet said it signed the agreement now as it looks to the future and forecasts its energy requirements as its AI applications grow exponentially in coming years.
Tech Companies Go Nuclear
While financial details of the agreement between Alphabet and Kairos Power were not disclosed, management at Alphabet said in a statement that they have agreed to purchase 500 megawatts of power from six to seven small nuclear reactors beginning in 2030.
Alphabet is the latest technology company to source clean energy from nuclear sources. This spring, Amazon (AMZN) agreed to buy a nuclear-powered data center from Talen Energy (TLN). In September, Microsoft (MSFT) and Constellation Energy (CEG) announced a joint plan to resurrect a unit at the Three Mile Island nuclear plant in Pennsylvania.
AI Energy Demands
Efforts to source nuclear-generated energy come as U.S. data center power is forecast to triple by 2030 due to the growing use of AI. Technology companies have also been looking at natural gas, wind, and solar power to help them meet future electricity needs. Alphabet’s nuclear deal is dependent on Kairos securing a permit and approval from the U.S. Nuclear Regulatory Commission, the companies said.
Small modular nuclear reactors are not as large as traditional reactors, and they are built in factories rather than onsite, which helps to reduce costs. Small modular nuclear reactors are also meant to be portable in some cases and can be set up near the site where their power is to be used.
Is GOOGL Stock a Buy?
Alphabet stock has a consensus Strong Buy rating among 39 Wall Street analysts. That rating is based on 30 Buy and nine Hold recommendations made in the last three months. There are no Sell ratings on the stock. Furthermore, the average GOOGL price target of $201.32 implies 21.64% upside potential from current levels.
