AI, the demand for data centre power and the move into nuclear
One of the significant shifts coming from artificial intelligence (AI) is associated with the incredible demand for data centre power. When analysing rack power density, or the power draw of a single, fully populated rack measured in kilowatts (KW), a typical centre without AI demand has a rack power density of 6-12 kilowatts from central processing unit (CPU) based servers.
However, a data centre supporting AI in the training phase – the process that enables AI models to make accurate inferences – has a rack power density of 26-80 kilowatts, up 4 to 7.5 times, from high-powered graphics processing unit (GPU) based servers.
A data centre supporting AI in the inference phase – the process that enables AI models to produce predictions or conclusions – has a rack power density of 12-40 kilowatts, up 2 to 3.5 times, from a combination of CPU and GPU-based servers.
In terms of U.S. data centre electricity demand, Goldman Sachs is forecasting 15 per cent compound annual growth to 2030, driving data centres to account for eight per cent of total electricity demand by 2030, up from the current three per cent.
And in this vein, Amazon Web Services (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and now Google are proposing securing energy for some of their data centres, which will be powered by nuclear energy. The big three will be heralding their “clean growth” credentials, whilst delivering on AI.
Amazon Web Services recently purchased Talen Energy’s 1,200 acre data centre campus, which adjoins its 2.5 gigawatt nuclear power plant, in Pennsylvania.
Subject to regulatory approval, Microsoft has signed a 20-year power supply deal in September with Constellation Energy to supply 835 megawatts of clean energy from the Three Mile Island Unit 1 nuclear plant, also in Pennsylvania.
And earlier this week, Google announced plans to purchase energy from Kairos Power’s small modular reactors (SMRs). Currently, there are only three small modular reactors operational – in Russia, China and India, however, there are over 50 under development, and most of them have capacity of 100 to 300 megawatts. Google expects the first Kairos Power U.S.-based reactor to be on online by 2030, adding 500 megawatts of power by 2035.
After hitting an 18-year high at US$106/lb. in February 2024, the uranium price fell 26 per cent to US$78/lb., however, it has traded up in recent weeks as Russia, which accounts for 13 per cent of global uranium concentrate, 26 per cent of conversion (known as uranium hexafluoride) and 38 per cent of enrichment, threatens an embargo on exports to the West.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
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