BackGoogle to fuel AI operations with groundbreaking partnership with Kairos Power for nuclear energy
Google has partnered with Kairos Power to develop small modular reactors for its AI operations, aiming for 500 megawatts by 2035. Supported by a $303 million DOE grant, this collaboration seeks to diversify energy sources amid rising AI energy demands.
PremiumIn a significant move for the energy sector, American tech giant Google announced a groundbreaking agreement with nuclear power developer Kairos Power LLC to power its artificial intelligence operations, as reported by Bloomberg.
As per the wire, this collaboration aims to develop and construct several small modular reactors (SMRs), with Google set to purchase the output starting in 2030 and ramping up to a full capacity of 500 megawatts by 2035.
Kairos Power, which received a permit from the Nuclear Regulatory Commission last December to establish a pilot project in Tennessee, is poised to leverage its innovative molten-salt technology, promising enhanced safety compared to traditional water-cooled reactors. Reportedly, the ambitious project is supported by a substantial $303 million grant from the Department of Energy, highlighting the potential for significant advancements in nuclear energy.
The tech giant's involvement is expected to provide a credible off-take for Kairos’ electricity, enabling the developer to secure further funding for its ambitious plans, adds the report. As the demand for energy related to artificial intelligence continues to rise, Google is keen on diversifying its energy sources, particularly given the concerns about reliance on gas-fired power for the impending AI boom.
Details regarding the financial aspects of the agreement remain under wraps, with both parties maintaining silence on pricing and other terms. It appears Google has not made an upfront, equity-like investment in Kairos Power, suggesting that the tech giant may have negotiated exit clauses in case of any setbacks in the development of the reactors. Such precautionary measures reflect the nuclear industry's historical challenges with project delays and budget overruns.
According to the report, industry experts speculate that if Google has indeed committed to a payment structure of $150-$200 per megawatt-hour, the tech giant's financial implications could reach approximately $100 million in today’s value by the time full output is achieved in 2035.
(With inputs from Bloomberg)
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