IEA: Data Center Energy Needs Driving Nuclear Revival

Fueled by the surging energy demand from data centers and artificial intelligence, small modular reactors (SMRs) are attracting unprecedented investment. Alongside renewables, SMRs are now emerging as a credible solution to provide reliable, low-carbon electricity tailored to the growing needs of the digital economy.

In its latest World Energy Investment report, the International Energy Agency (IEA) highlights the strong comeback of nuclear investment, up 50% over the past five years. For the first time, spending on new reactor construction and refurbishments is expected to exceed USD 70 billion in 2025.

Over the past two years, investments in data centers have jumped by 67%. This trend shows no sign of slowing: according to the IEA, electricity consumption from data centers could double to 950 TWh by 2030. For operators, access to reliable, constant, and clean energy has become a major strategic issue.

SMRs: a solution to secure reliable, low-carbon electricity

Faced with this challenge, “next-generation energy solutions are generating considerable interest, particularly SMRs,” notes the IEA. “Beyond being easier to finance and adaptable to project specifications, nuclear’s appeal for developing countries lies in its stable load profile.” In this context, financing for nuclear startups has surged by around 210%.

Renewables still hold a predominant share in powering data centers today. But the trend is shifting: as shown in the chart below, declining investment in fossil fuels to meet AI-related needs is expected to be offset primarily by nuclear between 2025 and 2030.

Several major tech companies operating data centers have already signed Power Purchase Agreements (PPAs), mobilizing around 27 GW of nuclear capacity from new reactors. For the first time, utility TVA concluded an agreement with SMR developer Kairos to power Google’s AI operations. Projects to restart previously shut down reactors have also emerged. A historic agreement was signed between Constellation Energy and Microsoft to relaunch a reactor at the Three Mile Island site.

A perspective shared by the NEA

The Nuclear Energy Agency (NEA) confirmed this trend in its SMR report published in July 2025: “The strategic drivers of SMR deployment—rising electricity demand (notably from data centers and digital services), energy security imperatives, and national targets set by many countries to reduce carbon emissions—are intensifying,” observed NEA Director-General William D. Magwood. ■