Jamie Spencer
Amazon has taken a significant step towards securing low-carbon energy for its data centers by acquiring a stake in U.S. nuclear developer X-energy. The investment is part of a broader collaboration to deploy small modular reactors (SMRs), a new generation of nuclear technology aimed at providing efficient and clean electricity. On Wednesday, X-energy announced that Amazon would anchor a $500 million fundraising round to help finance the development and licensing of its advanced SMR technology.
The partnership marks a strategic move for Amazon, which is increasingly investing in nuclear power to meet its climate commitments. X-energy’s innovative reactors promise to offer a more efficient alternative to traditional large-scale nuclear plants, positioning them as a solution to the surging power needs of AI-driven data centers.
Expanding the Role of Nuclear in Tech’s Energy Strategy
X-energy’s fundraising effort also attracted contributions from notable investors, including Ken Griffin of Citadel, Ares Management Corporation, private equity firm NGP, and the University of Michigan. Although the size of Amazon’s stake in X-energy was not disclosed, the technology giant will take two seats on the company’s board of directors, giving it a voice in X-energy’s strategic direction.
Amazon’s investment in X-energy is part of a broader initiative to support the deployment of SMR projects in the United States. The company is backing an SMR project in Washington State, which will be constructed and managed by Energy Northwest, a consortium of state public utilities. Additionally, Amazon has entered into an agreement with Dominion Energy to explore a similar project near Dominion’s North Anna nuclear power station in Virginia.
The goal of these partnerships is to bring more than 5 gigawatts of SMR-generated power online by 2039, which is enough to power around 4 million homes. Kevin Miller, Amazon’s vice president of global data centers, emphasized that X-energy’s technology would play a crucial role in helping the company reach its climate pledge of achieving net zero emissions by 2040.
A New Era for SMRs
X-energy’s Xe-100 reactors use helium gas as a coolant instead of water, which enhances safety and efficiency. Each reactor can generate 80 megawatts of electricity (MWe) and can be scaled into “four pack” units to produce up to 320 MWe, comparable to the output of a conventional gas power plant. The first of these advanced reactors is currently being developed at a Dow manufacturing site on the Texas Gulf Coast, with financial support from the U.S. government.
The U.S. government has actively supported SMR development as part of its strategy to diversify the country’s energy mix. Billions of dollars are being invested in companies like X-energy to make the construction of SMR plants more cost-effective by enabling them to be built in factories and assembled on-site. However, until recently, private capital for such projects has been difficult to secure due to concerns over the high costs and novel nature of the technology.
The growing power demand from AI-driven data centers has prompted technology companies to support nuclear projects, viewing them as a viable solution to energy needs. X-energy’s CEO, Clay Sell, highlighted the importance of integrating clean and reliable power into the grid to maximize the potential of artificial intelligence.
Tech Giants Lead the Nuclear Renaissance
Amazon’s move to invest in X-energy follows similar announcements from other tech companies. Google recently ordered six to seven SMRs from California-based Kairos Power, making it the first tech firm to commission new nuclear power plants. Meanwhile, Microsoft committed to purchasing 20 years’ worth of electricity from the dormant Three Mile Island nuclear plant, contingent on its restart by Constellation Energy.
James West, an investment bank Evercore ISI analyst, noted that Amazon’s involvement in X-energy could encourage other tech giants to pursue stakes in SMR developers. “This is another major step forward in a nuclear renaissance that is unfolding. The major tech companies, like Amazon Web Services, are leading the charge and enabling these investments with their capital resources,” West commented.
