Nuclear-Powered Data Centers — The Construction Projects Nobody Expected

When Data Centers Need Their Own Power Plants

The convergence of data center power demand and nuclear energy represents one of the most unexpected developments in both the construction and energy industries. Three of the world's largest technology companies — Microsoft, Google, and Amazon — have independently concluded that the only way to secure the carbon-free, baseload power their data centers require at scale is to invest in nuclear energy, including both existing nuclear plants and entirely new reactor technologies.

For the construction industry, this convergence opens up a category of work that sits at the intersection of two of the most complex and heavily regulated building types in existence. Nuclear construction and data center construction are each, individually, among the most demanding specialties in the field. Combining them creates projects of extraordinary complexity, extended timelines, and significant capital requirements — but also extraordinary value for the firms capable of executing them.

This article examines the three major technology company nuclear initiatives, the small modular reactor (SMR) technology that could transform the landscape, and the construction implications of a world where data centers come with their own dedicated power plants.

Microsoft and Three Mile Island — Restarting the Past

The most headline-grabbing nuclear data center project is Microsoft's agreement to purchase power from the restarted Three Mile Island (TMI) Unit 1 nuclear plant in Pennsylvania. TMI Unit 1 — not to be confused with the infamous Unit 2, which suffered a partial meltdown in 1979 — operated safely from 1974 until its economic shutdown in 2019. Constellation Energy, the plant's owner, has agreed to restart the unit and sell its output to Microsoft under a long-term power purchase agreement (PPA).

The Restart Challenge

Restarting a nuclear power plant that has been shut down for over five years is not a simple matter of flipping a switch. TMI Unit 1 requires extensive inspection, maintenance, and refurbishment before it can return to service. The Nuclear Regulatory Commission (NRC) must approve the restart, which involves a comprehensive safety review covering everything from reactor vessel integrity to emergency response systems.

The construction scope for the TMI restart includes:

Reactor system refurbishment: Inspection and replacement of key components including steam generators, reactor coolant pumps, and control rod drive mechanisms. This work requires specialized nuclear construction workers with NRC clearances and nuclear quality assurance (NQA-1) certifications.

Turbine and generator overhaul: The plant's turbine-generator set must be inspected, refurbished, and tested before restart. This is a major mechanical construction effort involving heavy lifts, precision alignment, and extensive commissioning.

Control system upgrades: TMI's original analog control systems will likely be upgraded to modern digital controls, which involves significant electrical, instrumentation, and controls work.

Cooling system inspection and repair: The plant's cooling water intake structures, condensers, and cooling towers must be inspected and repaired as needed. Given the plant's age, some of this infrastructure may require substantial rehabilitation.

Security upgrades: Nuclear plant security requirements have changed significantly since TMI was last operational, and the facility will need to be brought into compliance with current NRC security regulations.

The estimated cost of the restart is approximately $1.6 billion, with a timeline of approximately 3 to 4 years from the start of refurbishment to full-power operation. The construction workforce at peak is estimated at 1,500 to 2,000 workers.

What Microsoft Gets

For Microsoft, the TMI restart provides approximately 835 megawatts of firm, carbon-free power — enough to support roughly 600 to 700 megawatts of data center IT load (accounting for cooling and other overhead). This is a massive amount of dedicated power, roughly equivalent to the total data center capacity of a mid-size market like Columbus or San Antonio.

The PPA structure means Microsoft does not own the power plant but has a guaranteed supply of electricity at a predictable price for the life of the agreement (reportedly 20 years). This arrangement eliminates the power availability uncertainty that plagues data center construction in markets like Virginia.

Google and Kairos Power — Building the Future

Google has taken a different approach, signing a power purchase agreement with Kairos Power for electricity generated by a new type of nuclear reactor — a fluoride-salt-cooled, high-temperature reactor (FHR) known as the Hermes reactor. This is not a restart of an existing plant but the construction of an entirely new reactor technology that has never been deployed commercially.

The Kairos Hermes Reactor

The Hermes reactor is a small modular reactor (SMR) that uses fluoride salt as a coolant instead of the pressurized water used in conventional nuclear plants. The fluoride salt operates at atmospheric pressure, which eliminates the risk of the high-pressure accidents that have dominated nuclear safety concerns, and at high temperatures, which enables greater thermal efficiency.

Kairos received NRC construction permits for the Hermes demonstration reactor in 2023, and construction is underway at a site in Oak Ridge, Tennessee. The demonstration unit is a 35-megawatt thermal reactor designed to prove the technology before full-scale commercial deployment.

Construction of the Hermes Reactor

The construction of the Hermes reactor represents a new type of nuclear construction that differs significantly from conventional large nuclear plants. Key characteristics include:

Smaller footprint: The Hermes reactor occupies a fraction of the land area of a conventional nuclear plant, which simplifies site preparation and civil construction.

Factory fabrication: Major reactor components are fabricated in factory settings and shipped to the construction site for assembly, which reduces on-site construction time and improves quality control. This modular approach is philosophically aligned with the prefabrication strategies already being used in data center construction.

Simplified safety systems: The FHR design's atmospheric-pressure operation eliminates the need for the massive containment structures required for pressurized water reactors, reducing structural construction scope.

Novel materials: The fluoride salt coolant and high-temperature operation require specialized materials — including alloys and ceramics that are uncommon in conventional construction — and workers with experience in handling and installing these materials.

The construction workforce for the Hermes demonstration is relatively small (approximately 300 to 500 workers at peak) but highly specialized, requiring nuclear construction certifications and experience with novel reactor technologies.

The Commercial Path

If the Hermes demonstration succeeds, Google's PPA with Kairos envisions the deployment of multiple commercial-scale reactors (each approximately 75 to 100 megawatts electric) to provide dedicated power for Google data centers. The timeline for commercial deployment is approximately 2030 to 2035, depending on the demonstration's outcome and regulatory approvals.

For the construction industry, a successful Hermes demonstration could open up a significant new market segment: the construction of dedicated SMR power plants at or near data center campuses. Each commercial Hermes reactor would represent a construction project valued at $500 million to $1 billion, with specialized construction workforce requirements that sit at the intersection of nuclear and industrial construction.

Amazon and Talen Energy — The Direct Investment

Amazon has pursued nuclear power for its data centers through a different mechanism: direct investment in nuclear power companies and strategic power purchase agreements. The company's relationship with Talen Energy, which operates the Susquehanna nuclear power plant in Pennsylvania, provides AWS with access to nuclear-generated electricity through a complex arrangement involving a co-located data center campus.

The Susquehanna Model

Amazon's approach at Susquehanna involves building a data center campus directly adjacent to (essentially, co-located with) Talen Energy's nuclear plant. This arrangement provides the data center with direct access to nuclear-generated electricity, minimizing transmission losses and grid dependency.

The construction of the co-located data center campus is a significant project in its own right — multiple buildings totaling hundreds of megawatts of IT capacity, with all of the electrical, mechanical, and civil infrastructure required for a hyperscale data center. But the co-location with the nuclear plant adds unique construction considerations, including NRC security requirements for the data center campus, radiation monitoring systems, and emergency response planning.

Amazon's Broader Nuclear Strategy

Amazon has also made strategic investments in other nuclear power companies and technologies, signaling an interest in SMR technology similar to Google's approach. While the specifics of these investments are less public than Microsoft's or Google's nuclear initiatives, Amazon's scale and strategic interest suggest that the company will be a significant player in the nuclear-powered data center space.

Small Modular Reactors — The Scalable Solution

Beyond the specific initiatives of Microsoft, Google, and Amazon, the broader SMR industry is advancing rapidly, and its intersection with data center construction could be transformative.

What Are SMRs?

Small modular reactors are nuclear reactors with output capacities typically ranging from 50 to 300 megawatts electric — significantly smaller than conventional large nuclear plants (1,000+ megawatts). The "modular" descriptor refers to the fact that major reactor components can be manufactured in factories and transported to construction sites for assembly, rather than being built entirely on-site as conventional nuclear plants are.

Several SMR designs are in advanced development in the United States, including:

NuScale Power: The most advanced U.S. SMR design, with NRC design certification received in 2023. NuScale's reactor produces 77 megawatts electric per module, with plants designed to accommodate up to 12 modules for a total output of 924 megawatts.
X-energy Xe-100: A high-temperature gas reactor producing approximately 80 megawatts electric per module. X-energy has received significant Department of Energy funding and has power purchase interest from several data center operators.
TerraPower Natrium: Backed by Bill Gates, the Natrium reactor is a sodium-cooled fast reactor producing 345 megawatts electric. A demonstration plant is under construction in Kemmerer, Wyoming.
Kairos Power Hermes: The fluoride salt reactor described above in the context of Google's initiative.

Construction Implications of SMRs

If SMRs achieve commercial viability and are deployed at data center sites, the construction implications would be significant.

New construction specialty. Building SMRs requires nuclear construction capabilities — NQA-1 quality programs, NRC security clearances, specialized welding and fabrication skills — that are distinct from data center construction capabilities. Firms that can bridge both domains would be exceptionally well-positioned.

Extended project timelines. Even with modular fabrication, nuclear construction timelines are measured in years, not months. Data center operators accustomed to 18 to 24 month construction cycles will need to plan much further ahead for nuclear-powered facilities.

Regulatory complexity. Nuclear construction operates under a regulatory framework (10 CFR 50/52) that is far more demanding than anything in the data center world. Environmental reviews, safety analyses, emergency planning, and NRC inspections add time, cost, and complexity to every aspect of construction.

Workforce requirements. The nuclear construction workforce is aging and constrained. Building SMRs at scale would require retraining thousands of construction workers in nuclear-specific skills, including nuclear quality assurance, radiation protection, and specialized welding certifications.

Co-location challenges. Building a nuclear reactor adjacent to a data center creates unique construction coordination challenges, including managing two different regulatory frameworks (NRC for the reactor, local building codes for the data center) on a single site.

The Construction Industry Response

The nuclear-powered data center trend is still in its early stages, and the construction industry's response has been cautious but attentive. Several dynamics are worth noting.

Nuclear Construction Firms

The established nuclear construction firms — Bechtel, AECOM, Fluor, and Black & Veatch — are actively positioning themselves for the SMR construction market. These firms have the nuclear credentials, quality programs, and workforce to execute nuclear construction projects, but they lack the data center-specific expertise that would be valuable for co-located facilities.

Data Center Constructors

Conversely, the leading data center construction firms — DPR, Holder, Hensel Phelps — have deep data center expertise but limited or no nuclear construction experience. For these firms, the nuclear-powered data center trend represents both an opportunity (new work in an adjacent market) and a challenge (the nuclear construction learning curve is steep and expensive).

The Sweet Spot

The firms that will be best positioned for nuclear-powered data center construction are those that can either develop dual capabilities (nuclear and data center) internally or form strategic partnerships that combine the two. Given the time required to build nuclear construction capabilities, firms interested in this market should begin investing in training, certifications, and partnerships now.

For a broader perspective on how energy infrastructure is creating new construction opportunities, see our analysis of EV charging infrastructure construction, which explores another intersection of energy and building that is generating significant contractor demand.

Timeline and Market Sizing

The nuclear-powered data center construction market is in its infancy. Microsoft's TMI restart is the most near-term project, with a target completion in the 2028 to 2029 timeframe. Google's Kairos partnership and Amazon's nuclear investments have longer timelines, with commercial-scale deployment unlikely before 2030 to 2035.

If SMRs achieve commercial viability and are deployed at even a fraction of the pace that data center operators are currently building conventional facilities, the construction market could be substantial. An estimated 20 to 30 commercial-scale SMR deployments at data center sites over the 2030 to 2040 period could represent $10 billion to $30 billion in combined nuclear and data center construction spending.

The Bottom Line

Nuclear-powered data centers are the construction projects nobody expected, but they are increasingly the construction projects that the industry needs to prepare for. The convergence of insatiable data center power demand, grid constraints, and advancing nuclear technology is creating a new category of construction work that will require capabilities from both the nuclear and data center construction domains.

The timeline is long — measured in years, not months — but the scale of the opportunity is enormous. Construction firms that begin positioning themselves now, through training investments, partnership development, and strategic hiring, will be ready when the first wave of commercial nuclear-powered data center projects reaches the construction phase. The firms that wait may find themselves on the outside of one of the most significant construction market developments of the next two decades.