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Amazon is buying a stake in US nuclear developer X-energy, as part of a collaboration with the company aimed at deploying small modular reactors to provide low-carbon electricity to power its data centres.
X-energy said on Wednesday that Amazon had agreed to anchor a $500mn fundraising, which would help the company finance the development and licensing of its new generation of SMRs, which it said are more efficient than large-scale nuclear reactors.
Ken Griffin, founder and chief executive 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 take two seats on the company’s board of directors.
The equity investment by Amazon in X-energy forms part of a wider push by the technology giant into nuclear energy.
Amazon said it was supporting an SMR project in its home state of Washington, which will be constructed and owned by Energy Northwest, a consortium of state public utilities. It also signed an agreement with utility company Dominion Energy to explore the development of an SMR project near Dominion’s existing North Anna nuclear power station in Virginia.
Amazon and X-energy plan to bring more than 5 gigawatts of SMR-generated power online by 2039, which is enough to supply 4mn homes, according to the companies.
The investment by Amazon is the latest in a series of announcements by tech groups supporting nuclear projects, as they rush to source low-carbon power that does not threaten their climate pledges.
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 20 years’ supply of electricity from the mothballed US nuclear power plant Three Mile Island if Constellation Energy restarted 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 its Xe-100 SMRs generates 80MWe and they can be scaled into “four pack” 320MWe power plants, which is similar to the output from a typical gas power plant.
The first Xe-100 SMR is being developed at a Dow manufacturing site 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 built in factories and assembled on site, in order to cut costs and speed up the construction of plants. However, private capital has until recently been difficult to raise because of the novel nature of SMR technology and concerns over high costs.
But surging power demand in the US because of the rollout of artificial intelligence data centres is causing the technology sector to underwrite some nuclear projects, boosting the industry.
Amazon’s vice-president of global data centres Kevin Miller said X-energy’s technology would help the company achieve its climate pledge commitment to be net zero by 2040.
X-energy’s chief executive Clay Sell said there was a need to bring clean, safe, and reliable power on to the grid to “fully realise the opportunities available through artificial intelligence”.
James West, analyst at investment bank Evercore ISI, said Amazon’s investment in X-energy could inspire other tech groups to pursue stakes in SMR companies to secure access to power.
“This is another major step forward in a nuclear renaissance that is unfolding . . . The major tech companies, like [Amazon Web Services], are leading the charge and enabling these investments with their capital resources.”
