The Power Behind AI: Why Nuclear Energy Is the Real Play in Data Center Growth

The artificial intelligence revolution has captivated investors and industry analysts alike, promising transformative returns and unprecedented innovation. Yet beneath the excitement surrounding compute power and chip development lies a constraint that few are discussing: the sheer volume of electricity required to sustain this technological advancement. As data centers proliferate globally to support AI workloads, the energy infrastructure that powers them has become the true limiting factor in this digital transformation.

The Electricity Crisis Nobody’s Talking About

While most investors focus on semiconductor companies and tech infrastructure players, they’re overlooking a more fundamental challenge. According to Goldman Sachs analysis, worldwide electricity demand from data centers is projected to surge by 165% between 2023 and 2030, with artificial intelligence as the primary driver. This explosive growth in power requirements has exposed a critical gap: conventional energy suppliers are struggling to keep pace.

The challenge isn’t merely about building more data centers—it’s about securing the massive and reliable power sources necessary to operate them. Some technology companies have begun establishing their own on-premise generation facilities, yet this approach remains limited in scope and scalability. The energy sector remains the most viable path forward, and within this sector, certain operators possess distinctive competitive advantages.

Nuclear Power: The Solution AI Data Centers Need

Among the available energy sources, nuclear power stands out as uniquely suited to meet this demand. It delivers carbon-free electricity at scale while maintaining cost-effectiveness—two critical requirements for powering energy-intensive data center operations. The strategic importance of nuclear energy hasn’t gone unnoticed by major industry players. In September 2024, one leading utility announced plans to restart a nuclear reactor at Pennsylvania’s Three Mile Island facility, specifically to supply electricity to a major technology company’s nearby artificial intelligence data center.

This development represents more than a single transaction; it signals a broader market recognition of nuclear energy’s essential role in the AI infrastructure buildout. Goldman Sachs projects that global nuclear power production will expand by more than 50% by 2040, reflecting this growing demand. Meanwhile, supported by recent executive actions, the World Nuclear Association forecasts that U.S. nuclear capacity could quadruple by 2050—a dramatic expansion driven largely by data center growth and the energy demands of artificial intelligence applications.

Constellation Energy’s Unique Strategic Position

Within this transforming landscape, Constellation Energy emerges as exceptionally positioned. Operating 21 nuclear reactors across 12 facilities, the company generates 86% of its electricity from nuclear sources—making it the nation’s largest producer of carbon-free energy. Most significantly, Constellation possesses more nuclear generation capacity than all other U.S. nuclear producers combined, providing substantial room for rapid expansion.

This unique portfolio structure creates a compelling opportunity for accelerated growth. The company’s historically modest revenue growth trajectory is expected to accelerate substantially in the coming years as existing reactors operate at higher capacity and new projects come online. The Three Mile Island restart represents just one component of this broader expansion strategy, with additional capacity additions planned through the decade.

The Coming Nuclear Renaissance and Its Impact

The convergence of artificial intelligence’s explosive power requirements and nuclear energy’s unique advantages creates a multi-year growth narrative for companies positioned at the intersection. Constellation Energy, having already demonstrated operational expertise across the largest nuclear fleet in the nation, appears uniquely equipped to capture significant market share in this expanding sector.

Recent market volatility, including concerns about potential electricity rate regulations at the federal level, creates tactical opportunities for long-term investors. These near-term considerations, while relevant, don’t materially alter the fundamental structural tailwinds supporting nuclear energy expansion over the coming decade. As artificial intelligence infrastructure demands continue to accelerate, the utilities capable of reliably delivering power at scale will become increasingly indispensable to the technology ecosystem. The era of energy scarcity driving AI infrastructure investment decisions has already begun, and the opportunities for established nuclear operators may prove far more transformative than market participants currently recognize.