The United Kingdom and the United States have launched a formal collaboration to accelerate the development of next-generation nuclear energy, aiming to meet the immense and rapidly growing power demands of artificial intelligence. The new partnership seeks to establish a resilient and secure energy supply for the large-scale data centers essential for training and deploying advanced AI models, addressing concerns that the technology’s energy consumption could strain existing electrical grids and undermine climate goals.
This strategic move is a component of the broader “Atlantic Declaration for a Twenty-First Century US-UK Economic Partnership,” a framework designed to strengthen economic ties and tackle shared challenges. As AI systems become more powerful and widespread, their energy footprint is projected to surge, creating a critical need for clean, reliable, and continuous power sources. The agreement positions advanced nuclear technologies, particularly Small Modular Reactors (SMRs), as a key solution to power the future of computing without relying on fossil fuels.
The Surging Energy Demands of AI
The rapid expansion of artificial intelligence is creating an unprecedented demand for electricity. Training a single large AI model can consume gigawatt-hours of energy, equivalent to the annual electricity consumption of thousands of homes. As these models are integrated into everyday applications from search engines to enterprise software, the energy required for their ongoing operation, known as inference, is set to eclipse even the intensive training phase.
According to the International Energy Agency, data centers, which house the servers for AI and other digital services, consumed an estimated 460 terawatt-hours globally in 2022. The agency projects this demand could more than double by 2026, reaching over 1,000 terawatt-hours in a high-growth scenario. This potential surge in consumption poses a significant challenge for national power grids and complicates efforts to transition to a low-carbon economy. Without a corresponding increase in clean energy generation, the growth of AI could lead to greater reliance on natural gas and other fossil fuels, increasing greenhouse gas emissions.
This energy challenge has prompted major technology companies to explore alternative power solutions. Leaders in the AI field have openly acknowledged that future progress is directly linked to securing new, sustainable energy sources. The predictable, 24/7 power generation of nuclear energy presents a compelling alternative to intermittent renewables like solar and wind, which require energy storage solutions to provide uninterrupted power to data centers.
A New Transatlantic Energy Partnership
To address this emerging energy bottleneck, UK Secretary of State for Energy Security Claire Coutinho and US Secretary of Energy Jennifer Granholm signed a strategic agreement to bolster cooperation on next-generation nuclear power. The pact formalizes the intent of both nations to pool expertise, coordinate research efforts, and streamline regulatory frameworks for advanced nuclear technologies.
The collaboration aims to create a more favorable environment for private and public investment in the nuclear sector. By aligning their approaches, the UK and US hope to reduce development costs, shorten deployment timelines, and establish robust, international supply chains for nuclear fuel and components that are not dependent on adversarial nations. This is a crucial element of the partnership, enhancing energy security for both countries while promoting economic prosperity.
In a statement regarding the agreement, Secretary Coutinho emphasized the strategic importance of the collaboration. “We are joining forces to drive the development of the next generation of nuclear technology,” she noted. The partnership focuses on moving promising designs from concept to reality, with the ultimate goal of having new reactors online in time to meet the mid-century surge in electricity demand driven by AI and the broader electrification of the economy.
Focusing on Advanced Nuclear Technologies
At the heart of the joint initiative is a focus on innovative nuclear designs that differ significantly from the large, conventional reactors of the past. The primary technology of interest is the Small Modular Reactor (SMR), along with other advanced designs that promise enhanced safety, greater flexibility, and lower upfront costs.
Small Modular Reactors
SMRs are nuclear reactors that typically produce up to 300 megawatts of electric power, roughly one-third of the capacity of a traditional large-scale reactor. Their key advantage lies in their modular design. Major components can be manufactured in a factory setting and then transported to a site for assembly. This standardization is expected to reduce construction times, improve quality control, and lower costs through economies of scale. Their smaller footprint and enhanced safety features, which often rely on passive systems that do not require external power or human intervention, make them suitable for a wider range of locations, including powering industrial complexes or dedicated data center campuses directly.
Advanced Fuel and Materials
The agreement also covers research into advanced nuclear fuels and materials. This includes developing fuels that are more efficient and produce less long-lived waste. Both countries are exploring High-Assay Low-Enriched Uranium (HALEU), a type of fuel required by many advanced reactor designs. Establishing a secure supply chain for HALEU is a critical priority, as it is essential for deploying the next generation of nuclear technology and breaking reliance on foreign suppliers.
Industry and Government Collaboration
The success of this initiative depends on a strong partnership between government agencies and private industry. Tech giants, which are among the largest potential customers for this new energy source, are actively involved in the conversation. Companies like Microsoft have already signaled their interest in using SMRs to power their sprawling data centers and have been hiring nuclear energy experts to guide their strategy. They see dedicated nuclear power as a way to achieve their ambitious carbon-neutrality goals while ensuring the stable energy supply needed for future AI development.
On the government side, the UK and US are committing to creating a policy environment that fosters innovation. This includes funding for research and development, streamlining the licensing process for new reactor designs, and providing financial incentives to de-risk private investment. Agencies in both countries are working to harmonize regulatory standards, which would allow reactor designs approved in one country to gain faster acceptance in the other, creating a larger market for nuclear technology developers.
Challenges and Future Outlook
Despite the strong commitment from both governments, the path to powering AI with advanced nuclear energy faces several hurdles. Public perception of nuclear power remains a significant factor, and developers will need to demonstrate the safety and security of new designs to gain community acceptance. The economic viability of SMRs is also not yet fully proven. While they promise lower costs through factory production, the first-of-a-kind projects are likely to be expensive, and achieving cost-competitiveness with other energy sources like natural gas and renewables will be a critical test.
Furthermore, the timelines for deployment are a concern. Even with accelerated regulatory processes, designing, licensing, and building new nuclear reactors is a multi-year endeavor. The first SMRs are not expected to come online until the early 2030s, meaning they will not be a solution for the immediate energy needs of the AI industry. However, the UK-US partnership represents a long-term strategic bet that nuclear power is an indispensable component of a future clean energy system capable of supporting a world increasingly reliant on artificial intelligence.