Will Saudi Nuclear Reactors Power Its AI Ambitions
- Will Saudi Nuclear Reactors Power Its AI Ambitions
- SMRs Planned to Power Oracle Data Center
- Microsoft Does Not Want to Invest in Nuclear Reactors ~
It Just Wants to Buy Power from Them.
Will Saudi Nuclear Reactors Power Its AI Ambitions
The need for electrical power and to prevent a raid by data centers on the Saudi fossil fuel export supplies, may force the Saudi government to kick start its nuclear reactor program.
Image: Microsoft Bing Image Creator
All this AI development work will require power. The last thing the Saudi government wants to do is burn its fossil fuel production, intended to produce export earnings, to keep the lights on for AI data centers.
Saudi Arabia is investing $40 billion to become a dominant player for the use of AI in the Middle East. Data centers to support this program will require enormous amounts of electrical power to support the advanced semiconductors that process AI software, to power the data centers themselves, and to keep them cool in one of the hottest regions on the planet.
It follows that the Saudi government will coordinate its nuclear new build with its massive investments in AI. According to the New York Times report on 04/26/24, the Saudi government is investing billions of dollars in AI. The big IT platforms that are expected to be global users of AI are already working in Saudi Arabia.
Amazon’s cloud computing division has announced a $5.3 billion investment in Saudi data centers. According to the Saudi press agency, as quoted in the NYT report, more than $10 billion in new AI and related data centers deals have been made since February 2024.
Andressen Horowitz, a US venture capital firm, is reported to be investing $1 billion in recruiting AI startups to plant their flags in Saudi Arabia. Plus, Saudi Arabia has created a $100 billion fund to invest in AI.
The original Saudi nuclear plant envisioned 16 full size 1000 MW+ PWR type reactors. The Saudi plan gives up certain economies of scale by mixing reactor vendors, sizes, and locations. Three sites are short-listed Jubail on the Gulf; and Tabuk and Jizan on the Red Sea. Given the rapid rise of Saudi investment in AI, and the need for power for the related data centers, there may be near term changes in the original plan including using small modular reactors, up to 300 MW, which can be built faster and cheaper than 1000 MW versions
Geopolitics Plays a Role in the Timing of the Saudi Nuclear Program
In June 2023 the Saudi government unveiled a three-part plan tied to its nuclear energy ambitions.
- Part 1 called for US help with the execution of the Saudi new nuclear build plus building a uranium enrichment plant on Saudi soil.
- Part 2 called for a bilateral military security pact with the US to provide deterrence against attacks by Iran or its proxies.
- Part 3 offered diplomatic recognition by Saud Arabia for Israel in return for progress towards a two-state solution.
While negotiations between the US and Saudi Arabia on parts 1 and 2 have taken place, no deals have been announced so far. The prospects for Part 3 appear to have been postponed indefinitely due to the attack by Hamas on Israel and the ongoing hostilities in Gaza.
Separating the pieces of the plan from each other have geopolitical ramifications both domestically for the Saudi leadership and regionally given the often stated plan by Saudi officials that it would pursue nuclear weapons if Iran does so. These claims have cast a chill on US support for helping the Saudi nuclear new build especially the parts that involve uranium enrichment.
It is likely that sooner or later Saudi Arabia’s need to break ground on the first two reactors in anticipation of the need for power for its AI program and related data centers. It may decide that building commercial nuclear power plants to power its AI program is more important than the three way deal it proposed to the US and Israel.
A possible and plausible but by no means certain scenario is that Saudi Arabia awards the contract for two 1400 MW PWRs to KHNP. Along the way it asks for US help with the regulatory and safety programs needed to complete the new build, and postpones its uranium enrichment plans assuming there are no provocations from Iran. Diplomatic recognition of Israel remains on hold so long as the current political leadership in Israel is in power.
Resolution of the ongoing intellectual property dispute between Westinghouse and South Korea’s KHNP will be a plus but the dispute itself is not necessarily a deterrent to Saudi Arabia awarding the first two reactors to KHNP which built four 1400 MW PWRs for the UAE.
In terms of a timeline, in the UAE the first of four units broke ground in 2012 and the fourth unit entered revenue service in 2024. It is likely the Saudis would like a much faster schedule for the two units that would lead off the long term nuclear program.
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SMRs Planned to Power Oracle Data Center
According to a report by CNBC, Oracle, is designing a data center that would require at least 1,000MW of electrical power. Oracle CEO Larry Ellison told CNBC the data center would be powered by three small modular reactors.
Ellison seems to be amazed by his decision characterizing the nuclear energy announcement at an investor earning calls as a “bizarre” moment.
“Let me say something that’s going to sound really bizarre,” Ellison told analysts. “Well, you’d probably say, well, he says bizarre things all the time, so why is he announcing this one. It must be really bizarre.”
Ellison said that he already has location picked out. Ellison did not disclose the location of the data center or the future reactors. Several nuclear vendors are in the development process for deploying 300MW SMRs.
None have set dates for applying for licenses from the NRC. The firms are Ge-Hitachi (BNWRX300), Holtec (SMR300), and Westinghouse (AP300). TVA is planning to build several SMRs at its Clinch River
Also, Oklo recently said it has non-binding letters of intent for about 1,350 MW of microreactor capacity, a large majority of that for data center customers.
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Microsoft Does Not Want to Invest in Nuclear Reactors.
It Just Wants to Buy Power from Them.
(WNN) Earlier this month Microsoft’s Director of Nuclear and Energy Innovation Todd Noe told World Nuclear Symposium 2024 said the firm sees nuclear in the same vein as renewables for helping it to meet its clean energy goals – but currently has no intention of directly investing in its own nuclear power plants.
Microsoft does not “want to own and operate generation assets, any generation assets”, he said. “But if we need to wait on transmission, it may make more sense to put in an SMR and be co-located to a degree. But I think in the next couple of years a lot of these different schemes are going to be used by the different end users working with utilities.”
Though Microsoft is not considering equity stakes in nuclear plants, Noe said the company’s investments in owning and operating data centers were helping to de-risk new nuclear by providing purchasing certainty.
“We’re spending tremendous amounts of CapEx on data center build-out and core services, so right now there’s not much of an appetite for CapEx going away from our core business to the energy side. However, how we enable it is on the back end giving surety for purchasing,” he said.
Earlier this year, Microsoft teamed up with North American steel manufacturer Nucor Corporation and Google to work together across the electricity ecosystem to develop new business models and aggregate their demand for advanced clean electricity technologies, including advanced nuclear.
Last year, the company signed an energy matching agreement with Constellation Energy Corp to harness the environmental attributes of Constellation’s nuclear generation to reduce the carbon footprint of a data center in Virginia.
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