Within a week, two of the three largest cloud computing companies in the world signed 20-year contracts for nuclear electricity.
asserted
two → sign → electricity
Amazon has taken 690 megawatts from Constellation’s Calvert Cliffs plant in Maryland, including 190 megawatts of additional generating capacity expected between 2030 and 2032.
asserted
Amazon → take → 2030
Google has signed an agreement that will bring 890 megawatts of additional nuclear capacity into the United States.
asserted
that → sign → States
Constellation is investing more than $4.3bn to upgrade 11 reactors across Illinois, Pennsylvania, and New Jersey.
asserted
Constellation → invest → Illinois
Neither agreement, however, involves building a new nuclear reactor.
asserted
agreement → involve → reactor
Rather, they are paying to generate more output from reactors that already exist – some of which are even older than the companies themselves.
asserted
some → pay → companies
A few years ago, such agreements would have seemed inconceivable.
asserted
agreements → seem → ?
Nuclear power had fallen out of favour following accidents at Three Mile Island in 1979, Chornobyl in 1986 and Fukushima in 2011.
asserted
power → fall → 2011
Germany phased out nuclear power, while Japan shut down its reactors after Fukushima, although it has since begun restarting them.
asserted
it → phase → them
In many democratic countries, advocating for nuclear energy became politically difficult.
asserted
advocating → advocate → energy
Today, an undamaged reactor at Three Mile Island is being brought back into service, with Microsoft contracted to buy its output for 20 years.
asserted
Microsoft → bring → years
The US Department of Energy is providing up to $4.4bn in loans to support the restart of three shuttered plants, with the aim of restoring about 2.25 gigawatts.
asserted
Department → provide → gigawatts
Palisades in Michigan, which was closed in 2022, is contracted to be generating again by March 2027.
asserted
which → close → March
If successful, it would become the first US commercial nuclear plant to restart after entering decommissioning.
asserted
it → become → decommissioning
What has changed?
asserted
What → change → ?
The quiet reversal
In the last decade, the industry’s answer to AI’s energy problem was efficiency – things such as better chips, smaller models and smarter cooling seemed appealing and feasible.
asserted
things → seem → chips
Industry conferences featured discussions about performance per watt, with modern artificial intelligence (AI) chips performing more computation per unit of electricity than their predecessors.
asserted
conferences → feature → predecessors
Yet those efficiency gains did not reduce overall electricity demand.
asserted
gains → reduce → demand
Instead, each gain was quickly put towards something larger.
asserted
gain → put → something
Even when DeepSeek demonstrated that a competitive model could be trained at a fraction of the computing cost many had expected, the result was not a reduction in industry spending.
uncertain
result → demonstrate → spending
Instead, laboratories continued planning more training runs, models that reason for longer, agents that work continuously in the background, and video generation.
asserted
that → continue → background
This would not be the first time something like this has happened in history.
asserted
something → happen → history
In 1865, William Jevons observed that more efficient steam engines made Britain burn more coal, not less, because cheaper power created uses that had not existed before.
asserted
that → observe → uses
The International Energy Agency estimates that global data centre electricity demand will more than double to around 945 terawatt-hours by 2030, even assuming continued improvements in efficiency.
asserted
demand → estimate → efficiency
Hence, the industry has changed strategy – unable to shrink demand, companies are now buying up supply.
asserted
companies → change → supply
The arithmetic of waiting
Money, however, cannot solve every problem quickly.
asserted
Money → wait → problem
A new large reactor takes a decade or more from decision to electricity.
asserted
reactor → take → electricity
Tech companies are investing in small modular reactors to power their data centres, although many of these projects are not expected to deliver electricity until the early 2030s.
asserted
many → invest → 2030s
So far, very few of these have been built anywhere in the world.
asserted
few → build → world
Thus, while reactor restarts and upgrades are the faster option, the “fast option” still means 2027, 2028, 2029, or beyond.
asserted
option → mean → 2027
AI capital expenditure, however, does not operate on that same calendar.
asserted
expenditure → operate → calendar
The chips being installed this year could be overtaken by newer technology long before the 20-year electricity contracts powering them expire.
uncertain
contracts → instal → them
This discrepancy underpins all of these announcements, yet the industry has not addressed the implications if demand weakens while contractual obligations remain.
asserted
obligations → underpin → implications
Who pays in the meantime
This is where the story stops being about technology.
asserted
story → pay → technology
Most of these deals sit inside PJM, the grid operator serving roughly 67 million people across 13 American states and Washington, DC.
asserted
Most → sit → states
PJM uses capacity auctions to secure sufficient electricity-generating resources for future demand, with the associated costs ultimately passed on to consumers through their electricity bills.
asserted
PJM → use → bills
Capacity prices have reached the regulatory price cap in three consecutive auctions.
asserted
prices → reach → auctions
According to the grid operator’s independent market monitor, data centre demand contributed approximately $29.4bn in capacity costs across the four most recent auctions.
uncertain
demand → accord → auctions
In the latest auction alone, around $6.3bn of these costs were attributed to data centre demand, including forecasts for facilities that have yet to be built.
asserted
that → attribute → facilities
In effect, households are already paying higher electricity capacity charges, partly because of projected demand from facilities that may never become operational.
uncertain
that → pay → facilities
…and 25 more, not listed.
The Aporia
