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The Troubling Data on Data Centers

Nuclear Is Here To Save AI. But What About Your Energy Bills? October 12, 2025, Brian Boyle, The Daily Upside

A nuclear boom is directly downstream from the AI boom, with $350 billion in nuclear spending in the US planned by 2050, per Bloomberg.

The artificial intelligence revolution is officially upon us. If the abrupt improvement in your co-worker’s email grammar didn’t tip you off, the drastic increase in your power bill is a hard-to-miss clue. (And if your bill hasn’t changed much yet, consider yourself lucky.)

As the massive, power-hungry data centers that power AI’s expansion come online, they’re competing for power with everyone else. That’s driving up energy bills for industry and consumers alike, while testing the limits of US energy production capacity and stressing an aging power grid.

Silicon Valley has a solution: nuclear energy. Big Tech is investing heavily in the long-shunned (in the US, at least) energy source to power its AI moment, mostly in the form of so-called small nuclear reactors (SMRs), the next-gen version of nuclear tech that can (theoretically) be mass-produced and strategically deployed. (For the uninitiated, it might be helpful to think of SMRs as gas generators on radioactive steroids.) Now, a nuclear boom is directly downstream from the AI boom: According to a recent Bloomberg Intelligence report, soaring power demand from AI will spur $350 billion in nuclear spending in the US by 2050.

The US government, which views dominance in the AI sphere as crucial to continued economic and geopolitical dominance around the globe, is entirely on board. In a rare instance of bipartisan consensus, both the current and previous administrations have moved fast to cut red tape, overhaul oversight processes, and pour capital into the resurgent nuclear industry. 

“We’re in a very serious bind. We’ve already tapped out traditional oil and gas technologies. There’s an eight-, nine-year queue for diesel generators, the most expensive form of energy, and now also gas turbines,” Kevin Kong, founder and CEO of AI-driven nuclear compliance platform Everstar, told The Daily Upside. “Renewables are not dense enough … Data centers run 24/7, and are extremely power-dense. And so the only technology that’s left that was overlooked and under-invested in is nuclear.”

In other words, if we’re going to have an AI revolution, we’ll need plenty of nukes. But will the industry insulate Americans from rising energy bills? Maybe.

The Troubling Data on Data Centers

For years, experts had estimated energy demand growth in the years and decades to come based on banal drivers such as population growth, economic expansion and development of emerging economies, as well as the electrification of everything, including major industries like manufacturing and transportation. It would be predictable and hence manageable, they believed. 

Then came ChatGPT. Now? Most estimates predict that global energy demand will nearly double by 2050. A recent report from the International Energy Agency (IEA) found that over 50% of that growth will be driven by AI expansion. For example, a ChatGPT query requires roughly 10 times the energy, on average, needed for a Google search. To put it in even starker perspective, the IEA estimates that a typical AI-focused data center consumes as much electricity as 100,000 homes, while the largest such data centers consume 20 times that amount.

According to a recent Goldman Sachs report, data center power demand is expected to increase 160% by 2030 alone, and meeting 60% of that demand will require new energy generation capacity. Meanwhile, a report produced by Lawrence Berkeley National Laboratory and published by the Department of Energy estimates that data centers will consume more than 12% of total US electricity by 2028, up from 4.4% in 2023.

The triple-digit growth figures are already having a triple-digit impact on those suddenly, and sometimes unwillingly, competing with data centers for electricity. According to a recent Bloomberg analysis of energy data, monthly electricity costs in areas near data centers are now 267% higher than just five years ago, at the dawn of the AI age (that compares with a cumulative overall inflation rate of about 25%).

“Without mitigation, the data centers sucking up all the load is going to make things really expensive for the rest of Americans,” said David Crane, chief executive officer of Generate Capital…………………………………………………………………………………………………..

One Bubble After Another: While SMRs are likely to deliver consistent energy supplies to massive data centers, a valuable proposition in its own right, not everyone is convinced it will be delivered cheaply. 

According to data from Wood Mackenzie recently seen by the Financial Times, the “levelised cost of energy” for SMRs, or the cost for power that should be charged for the project to break even, will be around $182 per megawatt hour in 2030. That compares to $133 per megawatt-hour from traditional nuclear power plants, such as Vogtle, $126 for natural gas, and even less for wind and solar. https://www.thedailyupside.com/technology/artificial-intelligence/nuclear-is-here-to-save-ai-but-what-about-your-energy-bills/

October 15, 2025 - Posted by Christina Macpherson | business and costs, technology