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Besides introducing a bevy of new risks to corporate America, the computers that power artificial intelligence eat up a lot of energy. So much so that the Wall Street Journal reports that AI is among the reasons that Michigan is spending $2 billion to reopen a nuclear power plant it closed just two years ago.
The paper reports that besides a Michigan state law passed last year requiring that all energy in the state be renewably generated by 2030, a massive spike in electricity usage by data centers is increasing the urgency of finding new ways to power the grid.
The International Energy Association said in a report on electricity demand said that data centers will make up a third of new energy needs in the U.S. through 2026 and more than double worldwide by 2026 to 1,000 terawatt-hours.
“This demand is roughly equivalent to the electricity consumption of Japan,” the IEA said. “Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption.”
In March, Barron’s noted that nuclear power companies like Constellation Energy CEG+1.77% are reaping big stock price benefits from expectations that they’ll be the ones to generate a lot of that new power; Constellation’s shares are two-thirds higher so far this year. It’s an expectation they’re more than happy to lean into.
“The simple fact is that data centers are coming and they’re essential to America’s national security and economic competitiveness,” Constellation CEO Joseph Dominguez said on the company’s earnings call earlier this month. “We’ve heard this from a variety of policymakers, a number of nations, including China, are vying for AI supremacy… As you’re all closely following, there’s an active conversation underway by policymakers and stakeholders trying to understand the implications of the different ways of powering data centers.
“We welcome that conversation, and we’re confident that any thorough examination of co-location with nuclear plants will show that it is both the fastest and most cost effective way to develop critical digital infrastructure.”