Atoms, Bytes, and Colossus: The A,B,C's of Nuclear Power’s Role in Data Center Energy Strategy
At Colossus, we’ve been getting a lot of questions about nuclear energy—and for good reason. Power procurement has become one of the most pressing challenges in data center development, particularly as AI-driven demand accelerates. In key markets, requests for 500 MWs to over 1 GW are becoming the norm, while grid infrastructure struggles to keep pace. Developers are facing multi-year delays, escalating costs, and growing uncertainty around interconnection timelines.
Why Nuclear Is Back on the Table
To meet rising demand and avoid getting stuck in the queue, operators are revisiting nuclear as a long-term solution. Some are pursuing agreements with utilities to tap into existing nuclear generation—either by securing capacity from operational plants, restarting dormant facilities, or repurposing legacy infrastructure for digital workloads.
Meanwhile, small modular reactors (SMRs) are gaining attention as a future-fit solution. Their modular, scalable design could provide reliable, carbon-free baseload power directly at the campus level, reducing reliance on overburdened transmission systems and supporting sustainability targets.
Key Advantages of SMRs:
High-capacity, consistent 24/7 output
Carbon-free at the point of generation
Modular and scalable for localized deployment
Potential to relieve pressure in transmission-constrained regions
Several large-scale operators are now actively evaluating both legacy nuclear assets and emerging SMR technologies—clear signs that nuclear is becoming a more serious consideration in long-term power strategies.
Current Landscape and Limitations
SMRs, while promising, are still in early development. None are commercially operating in the U.S. today, and deployment timelines remain long—permitting alone can take 5–7 years. These are capital-intensive projects, often requiring several hundred million dollars in upfront investment. As a result, SMRs are best viewed as a strategic hedge for future capacity, not an immediate fix.
Traditional nuclear remains commercially viable, but options are limited by existing capacity and regional infrastructure. Reactivating or converting older plants is possible but involves long permitting processes, regulatory hurdles, and significant capital investment.
Data center power loads are dynamic and AI-loads can have high levels of demand fluctuation that do not pair well with the steady base load of nuclear. When combined with non-negotiable uptime requirements that do not allow for maintenance windows or testing cycles, nuclear alone won’t cut it. Operators will need to integrate nuclear into a hybrid power model with other resources to ensure performance and flexibility.
A hybrid power model will likely include:
Nuclear: For consistent, carbon-free baseload
Battery storage: To handle spikes in demand
Renewables: To diversify generation and offset emissions
Grid connectivity: To ensure backup and redundancy
However, combining these resources isn’t simple. Each component comes with its own permitting, construction, and financing track. Coordinating all of it into a coherent, deliverable plan requires early planning, strong utility partnerships, and integrated execution.
Public perception, regulatory complexity, and operational specialization are all real considerations for nuclear viability. Most operators will prefer not to own and operate nuclear assets directly, instead relying on long-term PPAs or lease structures to de-risk the investment and stabilize long-term power costs.
In addition, capital requirements will also shape how viable nuclear becomes. Whether it’s a traditional facility or an SMR, upfront costs are significant. Projects will require clarity on permitting, committed utility partners, and stable, creditworthy offtakers willing to make large long-term financial commitments at an early stage in order to move forward.
Looking Ahead
Nuclear won’t be the answer for every site—but it’s becoming a key part of long-range planning, especially in regions where power demand is outstripping supply and carbon mandates are tightening. SMRs aren’t ready to address today’s procurement gaps, but they may help future-proof campuses over the next decade. In the near term, utility partnerships around existing nuclear infrastructure may present more practical opportunities.
At Colossus, we expect hybrid strategies—nuclear paired with renewables, storage, and grid access—to offer the most resilient path forward. We’ll continue tracking these developments and advising clients on how to navigate the evolving energy landscape as demand continues to climb.