Google signed a deal to purchase electricity from a non-water-cooled nuclear reactor in Tennessee to power its data centers, marking the first commercial agreement for a new generation of nuclear technology that promises to eliminate meltdowns and slash construction costs.
The agreement between Google, Tennessee Valley Authority (TVA), and nuclear startup Kairos Power made TVA the first US utility to commit to purchasing electricity from a Generation IV reactor, a fundamentally different nuclear design that addresses safety and cost concerns that have plagued traditional nuclear power.
“Through a new power purchase agreement between Kairos Power and TVA, Kairos Power’s Hermes 2 Plant in Oak Ridge, Tenn., will deliver up to 50 megawatts of reliable, 24/7 energy to the TVA grid that powers Google data centers in Tennessee and Alabama,” the companies said in a joint statement.
Revolutionary nuclear design ditches water for molten salt
The Kairos Power reactor represented a radical departure from conventional nuclear plants. Instead of water as a coolant, the design used molten fluoride salt, which operates at atmospheric pressure rather than the high pressures that make traditional reactors complex and expensive to build.
The reactor employed TRISO fuel — microscopic uranium particles coated with layers of carbon and silicon carbide that physically cannot melt, even at extreme temperatures. “The fuel kernel has its own dual containment within the fuel pebble, creating a defense-in-depth mechanism,” according to Kairos Power’s technical specifications.
This design eliminated the risk of nuclear meltdown, the scenario that has driven public fear of nuclear power since accidents at Three Mile Island, Chernobyl, and Fukushima, according to the Kairos Power report. The molten salt coolant also retained radioactive materials better than water-based systems and operated at normal atmospheric pressure, removing the need for massive containment structures.
The Nuclear Regulatory Commission approved construction of the Oak Ridge facility in November 2024, marking the first non-water-cooled reactor permitted in the US in more than 50 years.
Kairos Power planned to increase the Hermes 2 reactor’s output from an originally planned 28 megawatts to 50 megawatts, with operations scheduled to begin in 2030. Google’s agreement extended to up to 500 megawatts of Kairos reactors by 2035, the statement added.
Enterprise power crunch drives nuclear innovation
The technology breakthrough comes at a critical time for enterprises facing explosive electricity demands from artificial intelligence operations. Data center electricity use rose from 58 terawatt-hours in 2014 to 176 TWh in 2023, and could reach between 325 and 580 TWh by 2028, according to Department of Energy projections.
For context, a single graphics processing unit used for AI can consume as much electricity as a four-person household uses daily. Unlike renewable energy sources, nuclear reactors provide constant baseload power regardless of weather conditions — critical for data centers that operate around the clock.
Google said it needed the nuclear power to support data centers in Montgomery County, Tennessee, and Jackson County, Alabama. The 50-megawatt output equals the electricity consumption of about 36,000 homes.
“To power the future, we need to grow the availability of smart, firm energy sources,” Amanda Peterson Corio, Google’s global head of data center energy, said in the statement.
Risk-sharing model shields ratepayers from development costs
The deal used a new approach to address cost concerns that have hurt nuclear power’s reputation. Instead of utility customers paying for construction, Google and Kairos Power will cover the costs of building the reactor. TVA will simply buy the electricity once it’s running.
This setup protects TVA’s customers from paying for an experimental project.
The arrangement represented what the companies called “a three-party solution where energy customers, utilities, and technology developers work together to advance new technologies.”
Scaling challenges limit near-term enterprise access
While the Google deal marks a breakthrough for next-generation nuclear technology, industry analysts warned that these new reactors face significant hurdles that could limit their availability to most companies.
“Advanced nuclear reactors cannot scale fast enough to be part of the near-term enterprise energy mix,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research.
“Licensing hurdles, decade-long construction cycles, and community resistance mean that meaningful deployments will materialise only in the 2030s,” Gogia said.
A Deloitte analysis suggested new nuclear power capacity could meet about 10% of projected data center power demand growth over the next decade. The nuclear advantage appeared likely to remain concentrated among hyperscale companies with deep pockets and long-term planning horizons.
“Hyperscalers like Google, Microsoft, and Amazon can shoulder first-of-a-kind costs via 20 to 40-year power purchase agreements and accept reputational exposure linked to early adoption,” Gogia said. “Most other enterprises do not have the balance sheet, political capital, or regulatory bandwidth to do the same.”
Tech giants race to lock up advanced nuclear capacity
While major technology companies have increasingly turned to nuclear power, the Google deal represented the first commitment to Generation IV technology. Previous corporate nuclear investments focused on existing reactor designs or restarting shuttered plants.
Big tech companies signed contracts for more than 10 gigawatts of potential new nuclear capacity in the past year, according to Goldman Sachs Research. The nuclear investments reflected efforts by hyperscalers to secure competitive advantages in AI development.
“These moves are not symbolic—they are designed to guarantee firm, carbon-free baseload power in an era where digital infrastructure depends on energy certainty,” Gogia said.
“Smaller enterprises will be dependent on conventional renewable contracts or volatile grid electricity, and hyperscalers will inevitably pass through their nuclear-backed stability as embedded advantages in cloud pricing,” Gogia added.
Nuclear power offered stability rather than low cost. “Nuclear procurement is less about cheap energy than about predictable costs,” Gogia said. “In a world where grid electricity prices are volatile and renewable PPAs are rising in cost, nuclear’s promise is not the lowest price but stability.”
Source:: Network World