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Amazon is buying a stake in US nuclear developer X-energy as part of a partnership with the company to develop small modular reactors to provide low-carbon electricity to power its data centres.
X-energy reported on Wednesday that Amazon had agreed to raise $500 million, which would help the company finance the development and licensing of new generation SMRs, which it said are more efficient than large-scale nuclear reactors.
Ken Griffin, founder and CEO of Citadel, Ares Management Corporation, private equity firm NGP and the University of Michigan also participated in X-energy’s fundraising.
X-energy did not disclose the size of the stake Amazon had bought, but said the technology group would get two seats on the company’s board.
Amazon’s equity investment in X energy is part of a broader push by the tech giant into nuclear power.
Amazon said it is backing an SMR project in Washington state, which will be built and owned by Energy Northwest, a consortium of state utilities. It also signed an agreement with utility Dominion Energy to explore developing an SMR project near Dominion’s existing North Anna nuclear power plant in Virginia.
Amazon and X-energy plan to bring more than 5 gigawatts of SMR-generated electricity online by 2039, enough to power 4 million homes, according to the companies.
Amazon’s investment is the latest in a series of announcements by tech groups backing nuclear projects as they rush to source low-carbon energy that doesn’t threaten their climate commitments.
This week Google ordered six to seven SMRs from California-based Kairos Power, becoming the first tech company to commission new nuclear power plants. This followed an announcement by Microsoft last month that it would commit to buying a 20-year supply of electricity from the US nuclear power station, Three Mile Island, if Constellation Energy restarts the site.
X-energy, which is backed by chemical giant Dow, has developed a reactor that uses helium gas as a coolant rather than water to divert heat from the core. Each of the Xe-100 SMRs produces 80 MWe and can be scaled to 320 MWe “four-pack” power plants, which is similar to the output of a typical gas-fired power plant.
The first Xe-100 SMR is being developed at a Dow manufacturing facility on the Texas Gulf Coast, with financial support from the US government.
The US government is investing billions of dollars in companies seeking to build SMRs, which can be manufactured in factories and assembled on site, in order to lower costs and speed up factory construction. However, until recently it has been difficult to raise private capital due to the novel nature of SMR technology and concerns about high costs.
However, rising energy demand in the US due to the deployment of AI data centers is forcing the tech sector to take on some nuclear projects, boosting the industry.
Amazon’s vice president of global data centers, Kevin Miller, said X-energy’s technology will help the company achieve its commitment to be climate-neutral by 2040.
X-energy CEO Clay Sell said there is a need to bring clean, safe and reliable power to the grid to “fully realize the opportunities available through artificial intelligence”.
James West, an analyst at investment bank Evercore ISI, said Amazon’s investment in X-energy could inspire other tech groups to seek stakes in SMR companies to secure access to energy.
“This is another important step forward in an unfolding nuclear renaissance. . . The big tech companies like [Amazon Web Services]are leading the charge and enabling these investments with their capital resources.”
