AI's Power Problem: Why Nuclear Energy is the Key to the Future

President-elect Donald Trump is the “drill baby drill” candidate.

But what does that mean exactly?

Simply put, any industry relying on cheap baseload power is about to get a big boost from the upcoming administration. This is particularly true for Bitcoin mining and artificial intelligence.

Trump has lent his support to both domestic industries, even going so far as to make the claim that he wants the U.S. to be the “Bitcoin mining capital of the world.”

But Bitcoin mining and AI both require a massive amount of reliable, cheap, baseload power.

And the only technology that can provide that is nuclear.

The International Energy Agency warns that electricity consumption by AI and cryptocurrency data centers could exceed 1,000 terawatt-hours (TWh) annually by 2026. This marks more than doubling from 460 TWh consumed just a couple of years back.

However, a troubling trend is occurring: the closure of over a dozen U.S. nuclear plants since 2012 poses a risk to meeting these increasing energy demands. This decline leaves only 54 operational plants, with 94 reactors. This potential energy shortfall threatens the expansion of AI technology as well as domestic Bitcoin mining.

Nuscale power module diagram

With geopolitical tensions affecting global resources, focusing on domestic nuclear energy infrastructure is imperative. Russia's consideration of restrictions on key exports like uranium further underscores the necessity for energy independence in Western countries.

As Russian President Vladimir Putin indicated, these developments could disrupt Western economies that rely on such resources, urging nations to fortify their energy and resource policies.

Some key areas for further research and development include exploring new reactor designs that are safer and more efficient, implementing advanced recycling technologies to reduce waste production, and developing innovative strategies for managing spent nuclear fuel. The advancement of these areas will not only improve the performance of nuclear power but also address concerns surrounding its use.

The most fascinating development in our opinion are small modular reactors (SMRs). 

SMRs are a type of advanced nuclear reactor with a power capacity of up to 300 MW(e) per unit, approximately one-third of traditional nuclear power reactors. Their design as small and modular units allows for factory assembly and transportation to various locations for installation.

SMRs are particularly suited for industrial applications or areas with limited grid capacity, providing low-carbon electricity. They offer economic advantages due to prefabrication, saving on cost and construction time, and allowing incremental deployment to meet energy demand.

With simpler, more passive safety systems, SMRs promise enhanced operational safety. They also require less frequent refueling, adding to their efficiency.

Globally, more than 80 SMR designs are under development, targeting a myriad of applications, including hybrid energy systems and industrial processes. We believe SMRs are poised to contribute significantly to sustainable development and the transition to clean energy.

With the belief that nuclear is inevitable for future growth in key industries, there are three publicly traded energy companies that I think will outperform in the years ahead.

I’ve outlined them in the latest issue of Digital Dispatch. Click here to find out more.

Keep coming back,

Chris Curl

Chris Curl
Editor, Daily Profit Cycle