News In Context

Big Tech Triggers The Nuclear Option

Google, Microsoft and Amazon, the hyperscalers driving the swift proliferation of electricity-guzzling data centers to expand their artificial intelligence and Cloud computing technologies, are turning to nuclear energy to meet their power demands.

Google said this week that it has ordered six to seven Small Modular Nuclear Reactors (SMRs) from U.S.-based Kairos Power, becoming the first tech company to commission new nuclear power plants to provide low-carbon electricity for data centers; Amazon revealed that it is investing in U.S. firm X-Energy to utilize nuclear reactors to power its own data centers; and  Microsoft announced in September that it will commit to buying 20 years’ supply of electricity from the deactivated U.S. nuclear power plant Three Mile Island if U.S. energy company Constellation Energy restarted the site.

The moves are expected to bolster the burgeoning market for SMRs and Advanced Modular Reactors (AMRs) which are increasingly seen as crucial for climate transition.

Generative AI, which requires more performance-intensive and specialized infrastructure than conventional data centers is driving unprecedented demand for high density data facilities with AI processing. To accommodate the changing demands of data center customers and alleviate capacity constraints, data centers providers are increasingly considering SMR powered data centers which offer the benefit of being compact, allowing them to be portable (in some cases) and be installed closer to data center consumers.

SMRs embody innovative safety features, which pave the way for integrating nuclear technologies into new industrial applications and make them more attractive to potential investors, according to an EU document. They have a key role to play in integrated energy systems, providing low-carbon electricity and heat with a relatively small footprint. SMRs can not only contribute to decarbonizing data centers but other sectors with hard-to-abate emissions such as transport, chemical and steel industry, and district heating. For all of these reasons on October 11 the EU said it announced the launch of The European Industrial Alliance On Small Modular Reactors to accelerate the development and deployment of SMRs in Europe by the early 2030s.

The International Energy Agency (IEA), says that by 2026 data centers could use twice as much energy as two years ago—an amount roughly equivalent to adding “at least one Sweden or at most one Germany.”

Europe is feeling the squeeze. The rapid growth in demand for European data center capacity is placing unsustainable strain on the European electricity grid. Data centers in the EU account for approximately 2.7% of total EU electricity use and are expected to reach 3.21% by 2030. As a result, data center energy consumption has attracted the scrutiny of EU policymakers and investors increasingly focused on maximizing energy efficiency and reducing environmental impact.

From May 2024, data center operators will be expected to report on metrics specified in the EU’s Energy Efficiency Directive (EED) including energy performance and renewable energy integration. To meet ESG objectives and address sustainability pressures, data center operators are reducing their dependence on traditional sources of power and, like their U.S. counterparts, are considering distributed energy resources such as SMRs which offer a consistent supply of carbon-free electricity and eliminate intermediation by outdated transmission grids.

IN OTHER NEWS THIS WEEK

ROBOTICS

Toyota Teams With Hyundai’s Boston Dynamics On AI-Powered Robots

Toyota’s research unit and Hyundai Motor’s Boston Dynamics are joining forces to speed up development of humanoid robots with artificial intelligence. The partnership will pair Toyota Research Institute’s (TRI)  expertise in large behavior model learning for machines with Boston Dynamics’ humanoid Atlas robot, they said October 16. Boston-based teams from TRI and Boston Dynamics will conduct research on use cases for AI-trained robots in areas such as human-robot interaction, they said. Toyota has said it’s made a breakthrough with AI in teaching robots to learn and Boston Dynamics, which was bought by Hyundai in 2020, has had commercial success with its robotic guard dog and a mobile robotic arm for re-stocking warehouses. Their collaboration comes as a potential challenge to other smart bot programs such as the Optimus robot showcased last week by rival Tesla. A number of humanoid robot startups also are attracting attention — and billions of dollars in capital.

FINANCIAL SERVICES

JP Morgan Is Winning The AI Race In Banking

Quartz reports that JPMorgan, the largest U.S. bank, has held on to its spot as the number one AI leader in the financial services sector. The bank has the highest volume of AI talent, which has grown 16% in the past 12 months, and has more AI researchers than its seven biggest competitors combined, according to the latest Evident AI Index, released October 18.  The bank has grown its use cases to more than 400 and is already beginning to see the dollar value of its commitment. Company President Daniel Pinto said last month that the bank is expecting to see nearly $2 billion in returns from its investment into the technology this year, particularly related to fraud prevention.

COPYRIGHT

New York Times Tells Jeff Bezos-Backed Startup To Stop Using Its Content

The New York Times has sent generative-AI startup Perplexity a “cease and desist” notice demanding that the firm stop accessing and using its content, according to a copy of the letter reviewed by The Wall Street Journal. The Times is already taking on another AI firm, ChatGPT creator OpenAI, with a lawsuit that is pending. It joins other publishers, including Forbes and Condé Nast, that have accused Perplexity of using their material without permission to generate AI search results.Perplexity, which was launched two years ago and is backed by Jeff Bezos, is trying to mount a challenge against search giant Google. When users type questions or words into the search box on its website, it responds with AI-generated summaries, along with some featured sources and links.

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About the author

Jennifer L. Schenker

Jennifer L. Schenker, an award-winning journalist, has been covering the global tech industry from Europe since 1985, working full-time, at various points in her career for the Wall Street Journal Europe, Time Magazine, International Herald Tribune, Red Herring and BusinessWeek. She is currently the editor-in-chief of The Innovator, an English-language global publication about the digital transformation of business. Jennifer was voted one of the 50 most inspiring women in technology in Europe in 2015 and 2016 and was named by Forbes Magazine in 2018 as one of the 30 women leaders disrupting tech in France. She has been a World Economic Forum Tech Pioneers judge for 20 years. She lives in Paris and has dual U.S. and French citizenship.