Microsoft restarts abandoned nuclear power plants, and all electricity will be used to power AI data centers and cloud services

Against the backdrop of global AI development boom and growing energy demand, the United States nuclear energy industry is ushering in new development opportunities.

Recently, the cooperation between United States technology giant Microsoft and nuclear power plants, as well as the adjustment of the United States government's AI chip export policy, have aroused widespread concern about the global development prospects of the nuclear energy and AI industry.

Recently, Microsoft announced a 20-year energy purchase agreement with the Three Mile Island nuclear power plant in the United States, where all electricity will be used to power AI data centers and cloud services.

This means that in order to meet the increasing energy demand, the power plant that once had the worst nuclear accident in the United States will be restarted in order to meet the increasing energy demand.

Figure | Microsoft announced a contract with a nuclear power plant (Source: Microsoft)

In 1979, a partial meltdown occurred at a reactor at the Three Mile Island nuclear power plant, the first core meltdown in the history of human nuclear energy and the worst nuclear power accident in the United States. The nuclear power plant in Pennsylvania, United States, will be resurrected under the new name Crane Clean Energy Center after years of inactivity.

The restart of the Three Mile Island nuclear power plant is not an isolated case. United States Palisades nuclear power plant in Michigan is also on the list of restarts.

The United States Department of Energy has committed $1.5 billion in conditional loans to facilitate the restart of multiple nuclear power plants, putting them back into operation by the end of 2025.

Jason Kozal, director of the reactor safety division at the United States Nuclear Regulatory Commission, said: "To the best of our knowledge, this is the first attempt at such ·a restart in the world. Kozar is also co-chair of the regulatory group that oversees the reopening of Palisad.

Since 2012, more than a dozen nuclear power plants in the United States have been shut down, in part because of poor economics.

In states where the electricity market has been deregulated and prices are volatile, some less cost-effective nuclear power plants, such as those with only one reactor in operation, struggle to remain profitable. The Three Mile Island nuclear power plant is a case in point.

Currently, there are still 54 nuclear power plants operating in the United States, with a total of 94 reactors. Globally, nuclear energy accounts for about 9% of the total electricity supply, and this proportion has risen in recent years.

In Japan, the government suspended operations at the remaining 48 nuclear power plants after the Fukushima Daiichi accident, but is now gradually restarting them, in part to reduce dependence on gas imports. In contrast, Germany announced the phase-out of nuclear power plants in 2011 and shut down the last three in 2023.

In the United States, the outlook for nuclear energy appears to be improving as tech companies scramble to build huge, energy-hungry data centers to support their AI systems and other applications while meeting their climate commitments.

Microsoft, for example, has pledged to become carbon negative by 2030, but nuclear power seems like an inevitable option to meet its skyrocketing demand for AI and cloud services.

Jaco·po Buongiorno, United States director of the MIT Center for Advanced Nuclear Energy Systems, said: "This further confirms the value of nuclear energy, which also makes sense from a business point of view if the terms or price of the transaction are right." ”

Restarting a nuclear power plant will not be an easy task. Regulators and companies must "activate" decommissioned power plants through a complex process of permitting, monitoring, and environmental assessments. The safety inspection will ensure that the plant will be able to operate safely after the uranium fuel rods are replaced.

The infrastructure also needs to be carefully inspected, and any metal parts that have corroded, including the wires and cables within them, need to be replaced.

Turbine generators also need to be carefully inspected, as prolonged idleness can lead to defects inside the shaft or corrosion of the blades, which must be refurbished before they can be put into service.

For some climate-conscious people, the Microsoft deal makes a lot of sense. Nuclear power, while one of the most expensive forms of electricity, experts say it could play a key role in the grid, as nuclear power plants typically produce a steady stream of electricity far more reliable than renewables such as wind and solar.

In addition to restarting nuclear power plants, the United States government is also adjusting its AI chip export policy to meet the needs of global AI development.

In October 2023, the United States required exporters to obtain a license before shipping advanced chips to parts of the Middle East and Central Asia. However, the United States Department of Commerce recently unveiled a new rule that could ease restrictions on companies like Nvidia shipping AI chips to data centers in the Middle East.

Under the new rules, overseas data centers can apply for "Validated End User" status, which will allow them to receive chips under a generic license without requiring United States suppliers to obtain separate licenses for each shipment.

The United States will work with foreign data centers applying for the program, as well as local governments, to ensure the security of the technology.

The move comes against the backdrop of growing concerns United States the Middle East could become a gateway for other countries to access advanced chips. U.A.E.-based AI company G42 is one of the key targets.

In April 2024, Microsoft announced that it would invest $1.5 billion in G42, planning to provide it with chips and model weights, but the deal drew scrutiny from the United States government.

United States Commerce Department said data centers applying for "verified end-users" will undergo rigorous scrutiny to ensure that there are safeguards in place to prevent United States technology from being transferred or used in a way that violates national security.

The review process will include information about current and potential customers, business activities, access restrictions, and cybersecurity, and must also undergo an on-site review.

As global demand for AI continues to grow, the resurgence of the United States nuclear energy industry and the adjustment of AI chip export policies reflect the close and complex relationship between technological development and energy demand.

These changes are not only about energy supply, but also about complex issues such as national security, international trade, and global technology competition. In the future, how to balance technological innovation, energy demand and environmental protection will be an important challenge for governments and enterprises.

Resources:

https://www.nature.com/articles/d41586-024-03162-2

https://www.reuters.com/technology/us-sets-new-rule-that-could-spur-ai-chips-middle-east-2024-09-30/

Typesetting: Dox