What's happening
U.S. data center power demand is on a trajectory to more than triple, rising from 34.7 GW in 2024 to an estimated 106 GW by 2035, a pressure point that has drawn Microsoft, Amazon, and Google into direct agreements with advanced reactor and fusion developers. Global investment in data centers reached roughly USD 580 billion in 2025, intensifying the search for large-scale, dispatchable clean power sources that intermittent renewables alone cannot reliably supply. Nuclear has emerged as the primary candidate, with the IEA projecting more than 70 GW of new nuclear capacity online by the mid-2030s and expecting nuclear spending to exceed USD 100 billion annually under stated government policies.
Governments are moving in parallel. Washington and Tokyo announced a USD 40 billion SMR programme targeting deployment in Tennessee and Alabama, and the European Commission committed €200 million in March 2026 for a new generation of small modular reactors. Investments in nuclear have grown by more than 70% over the past five years. Commonwealth Fusion Systems is targeting commercial plant deployment, and Helion Energy — which holds a power purchase agreement with Microsoft — is advancing fusion-based PPA structures. The IEA estimates that meeting ambitions to triple global nuclear capacity by 2050 would require roughly USD 900 billion in additional spending beyond current trajectories.
Why it matters for markets
The financial scale of the nuclear build-out creates both opportunity and risk for capital markets. New nuclear capacity is currently priced at roughly USD 140–220 per megawatt-hour — two to three times the levelized cost of new solar or wind paired with battery storage — meaning offtake agreements signed today by hyperscalers carry significant long-term cost exposure relative to alternative clean energy procurement. The IEA's projection of USD 100 billion in annual nuclear spending, if realized, would represent one of the largest sustained capital flows in the energy sector, with implications for equipment manufacturers, fuel suppliers, engineering firms, and project finance markets.
Execution risk remains the sector's defining constraint. France's Flamanville-3 reactor was completed roughly €10 billion over budget and 12 years behind schedule, and nuclear projects worldwide average construction cost overruns of approximately 100% alongside an additional USD 1.5 billion price tag per project. Grid capacity pressures are expected to intensify starting around 2028, a timeline that sits uncomfortably close to the mid-2030s window when the IEA projects meaningful new nuclear capacity to come online. The gap between demand acceleration and supply delivery is the central variable that will determine whether corporate nuclear procurement strategies translate into operational power or remain contractual commitments without electrons behind them.
For the broader technology sector, the power constraint is already a capital allocation issue. Global data center investment of roughly USD 580 billion in 2025 reflects infrastructure spending that presupposes adequate power availability. If grid capacity does not keep pace with deployment, data center expansion timelines — and by extension cloud revenue growth for AWS, Azure, and Google Cloud — face a physical bottleneck that financial engineering cannot resolve.
Sectors and assets to watch
The most direct equity exposure to this theme sits with dedicated nuclear developers. Oklo Inc. (OKLO), with a market cap of approximately USD 11.64 billion and 215 employees, develops advanced fast fission SMRs through its Aurora powerhouse platform, rated at 15 MWe per unit, and offers long-term power purchase agreements targeting data center operators. The company's small workforce relative to its market capitalization reflects the pre-revenue, development-stage nature of the business. NuScale Power Corporation (SMR), with a market cap of approximately USD 4.39 billion and reported revenue of USD 18.7 million, holds the distinction of being the first SMR design to receive full U.S. NRC design certification; its flagship NuScale Power Module delivers 77 MWe per unit, scalable to 924 MWe across a 12-module VOYGR plant configuration.
On the demand side, Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL) are the hyperscalers whose data center power requirements are driving nuclear procurement. Microsoft's Azure, Amazon Web Services, and Google Cloud Platform collectively represent the infrastructure layer underpinning AI workloads, and each company has entered agreements with nuclear developers as part of their clean energy strategies. With market capitalizations of USD 3.34 trillion, USD 2.91 trillion, and USD 4.61 trillion respectively, these companies have the balance sheet capacity to absorb long-term power contract commitments, but their operational timelines depend on whether reactor developers can meet deployment schedules that the sector's historical track record has rarely achieved.
What to watch next
Key developments to monitor include regulatory milestones for SMR licensing in the United States — particularly any NRC actions affecting Oklo's Aurora or NuScale's VOYGR deployments — and progress on the USD 40 billion Washington-Tokyo SMR programme as site selection and contracting details emerge for the Tennessee and Alabama projects. The pace at which Commonwealth Fusion Systems and Helion Energy publish technical and commercial milestones will indicate whether fusion timelines are converging with the 2028–2035 demand window. On the cost side, any updated IEA or independent assessments of SMR construction economics will be significant, given that the current USD 140–220 per megawatt-hour range for new nuclear remains the primary financial argument against nuclear over renewables-plus-storage. Quarterly earnings disclosures from Microsoft, Amazon, and Alphabet may also provide updated capital expenditure guidance that reflects the scale of power infrastructure commitments embedded in their data center expansion plans.