AI giants producing their own electricity

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.wsj.com/business/energy-oil/as-tech-giants-get-more-hands-on-with-energy-their-risks-rise-aa5bb8e9

As Tech Giants Get More Hands-On With Energy, Their Risks Rise

Hyperscalers are getting involved in earlier stages of power development

By Jinjoo Lee and
Dan Gallagher, The Wall Street Journal, Jan. 16, 2026

Tech giants are sick of waiting around for electricity. But locking in future power means taking on more upfront risk. … companies better known for driving advertising clicks and social network likes are now diving into the power business. …

[Alphabet/ Google, Amazon…]

Meta and Amazon haven’t disclosed how much of the development cost they are shouldering for SMR projects, but these can be high-risk, substantial outlays. Early development capital, or funding that is needed to know if an SMR [Small Modular Reactor] project is even viable, can run from $500 million to $600 million [permits, design & prep, not including actually building one]…

If the AI business stalls, tech companies could be left with more than just data centers as stranded assets. …

https://www.wsj.com/business/energy-oil/trump-to-propose-plan-for-tech-companies-to-fund-new-power-plants-79768f79?mod=hp_lead_pos5

Trump to Push Plan for Tech Companies to Fund New Power Plants

The White House proposal, set to be announced Friday, would involve an emergency auction within the country’s biggest power market

By Amrith Ramkumar, Scott Patterson and Jennifer Hiller, The Wall Street Journal

The Trump administration is planning to propose that the nation’s largest power grid operator hold an emergency auction in which tech companies would bid to have new power plants built…

The directive, expected Friday, would be an unprecedented attempt by the federal government to check rising electricity prices within PJM Interconnection, a 13-state power market spanning from New Jersey to Kentucky. The build-out of data centers there in response to the artificial-intelligence boom is straining the grid’s capacity and has resulted in substantially higher costs in several of the grid operator’s recent power auctions.

The emergency auction would allow tech companies to bid on 15-year contracts for new power plants in deals that would be worth billions of dollars…

The idea that new data centers will need to adopt a “bring your own power” mantra has taken hold across much of the country already…[end quote]

AI giants such as Google, Amazon, Meta and OpenAI as well as Microsoft are mentioned. New regulations that shift approval from states to federal are being discussed.

The projected increase in power use has been recent and explosive. Electricity drain by data centers is causing electricity costs to ordinary consumers to rise. This is a political issue that is bipartisan. Governors from both parties as well as the federal government are getting involved.

Stay tuned because there will probably be dramatic changes in technology, business and regulations.

Wendy

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I read an article the other day saying these companies want a law/regulation repealed that forces any power plant to be connected to the grid at large, IIRC. They essentially want be “off grid” with their individual power supply. IF they are buying it and building it, why not?

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It’s been pointed out that AI failure could have major impact on costs if power production capacity gets built but loses it major data center customers. Then consumers likely get stuck w paying for the added capacity.

But I think that is unlikely. We generate so much new digital data every day it’s hard to imagine not needing more capacity regardless of what happens w AI.

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This article is hyperventilating that power generation can be expedited while Trump is doing all he can to kill renewables which are needed. AI giants financing their own power needs is OK, but that does not get them built any faster. AI giants need to realize that they can build data centers much faster (1 to 2 years) than new power generation (~5 years for natural gas plants, 1-2 years for solar/wind/batteries, restart nuclear >3 years, restart coal >3 years, new nuclear >10 years, new coal >10 years). AI giants want clean energy so they will not fund coal.

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22GW of renewables thwarted or in limbo under Trump ​‘blockade’

An Interior Department memo is hampering wind and solar on public lands. It’s one of many federal actions slowing the build-out of cheap, clean energy.

As the Trump administration wages a high-profile attack on the nation’s offshore wind farms, it has also been quietly fighting a brutal battle with renewable energy projects on land.

Since President Donald Trump took office nearly a year ago, his administration has announced at least two dozen policy and regulatory actions aimed at hindering the build-out of wind and solar projects, including rescinding federal tax credits, withdrawing grants and loans, and freezing permitting approvals. Yet one measure in particular has had an outsize chilling effect — and is facing a new legal challenge from clean energy groups.

Last summer, the U.S. Interior Department announced that all decisions related to wind and solar projects would require an ​“elevated review” by Secretary Doug Burgum, saying this would end the Biden administration’s ​“preferential treatment” for renewables. In a July memo, the agency listed nearly 70 types of permits and other actions that now need Burgum’s personal sign-off, adding cost and time and creating significant anxiety for developers, experts say.

Over 22 gigawatts of utility-scale wind and solar projects on public lands have been canceled or are held up as a result of the order, according to Wood Mackenzie data and the Interior’s Bureau of Land Management website. That’s enough capacity to power roughly 16.5 million U.S. homes — a significant amount at any point, but especially when the country is clamoring for more low-cost electricity as energy demand and utility bills soar.

“We’re seeing electricity costs go up all around the country, and the cheapest electrons that we can put into the supply side of that equation are all stuck on Secretary Burgum’s desk,” Sen. Martin Heinrich (D-N.M.) told Canary Media.

Solar represents the bulk of that figure, with 18 GW of facilities scrapped or considered inactive as of December, by Wood Mackenzie’s count. Nearly 90% of those projects also included energy storage, given that many were slated for desert regions in the Southwest, said Kaitlin Fung, a research analyst for the consultancy.

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Here are a few articles on some of these tech companies and data center developers investing in new nuclear power.

Amazon is working with the local utility to install high temperature gas-cooled reactors in Washington state. These reactors will be located near the existing Columbia plant on the Hanford reservation in eastern Washington.

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Google is developing new power plants in Tennessee.

In a flurry of press releases, blog articles, and LinkedIn posts all released August 18, Kairos Power, Google, and the Tennessee Valley Authority announced a new power purchase agreement (PPA) between Kairos and TVA to supply up to 50 MW to the TVA grid, which powers two data centers owned by Google.

This agreement marks a significant milestone: It’s the first time a U.S. utility has entered into a PPA to buy power from a Gen IV reactor.

More details: The Google data centers set to be served by this PPA are in Montgomery County, Tenn., and Jackson County, Ala. The reactor that will be providing the power is Kairos’s Hermes 2, which is slated to enter commercial operation in 2030.

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Meta signed a 20-year power purchase agreement with Constellation Energy for power from the existing Clinton plant in Illinois.

_ Pete

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All these new nuclear power plants will only be ready to generate gigawatts of electricity in about 10 years (2035). IMO, the AI giants are going to invest in renewables and nat gas in the short term when they realize the schedule of getting significant electricity from new nuclear power. Trump will be gone by end of 2028.

The Clinton plant is an old nuclear power plant.

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And they continue to install multiple diesel generators for backup power. This is driving Caterpillar and Cummins shares to new heights.

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If we can get a new grid out of it, well we need it. Count me in. We could save about 25% plus of our electric energy with a new grid. Speaking loosely about the entire grid.

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I think that is where DC power makes sense!

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Explain the basis for your statement.