AI optimism: Joe Dominguez, Constellation’s chief executive officer, was quoted as saying, “We had another strong quarter as support grows for nuclear energy as a reliable, clean source to meet growing demand from electric vehicles, heavy industry, and emerging technologies, such as AI and related digital infrastructure.”
AI and data centers play crucial roles in Constellation’s market forecast, which consists of the following five main points:
- AI and data center growth will drive power demand.
- Major tech companies are expected to invest $1 trillion in data centers over the next five years.
- In the next five years, consumers and businesses will generate twice as much data as all the data created over the past 10 years.
- AI data center racks could require seven times more power than traditional data center racks.
- Between now and 2030, domestic data center electricity consumption is expected to grow anywhere from 6.5 percent to 7.5 percent (335 terawatt-hours to 390 terawatt-hours).
Waiting for contracts: Despite Constellation’s optimism and stock success, the Investor’s Business Daily article suggests that industry analysts still have a wait-and-see attitude as to whether Constellation will be able to finalize the long-term contracts for adding AI data centers to its nuclear energy business. According to Morgan Stanley analyst David Arcaro, Constellation’s negotiations on such contracts are progressing, and the company may be able to sign contracts by the third quarter of this year.
Meeting data center demand: Constellation, which owns one-quarter of U.S. nuclear power reactors, is not the only energy company looking to profit from AI and data centers. Vistra is another nuclear energy provider that has AI data centers in its growth plans. Furthermore, the expressed interest of Chevron in AI data centers shows that plans to meet these technological demands are not restricted to the nuclear power industry. Chevron expects a surge in demand for natural gas stemming from the electricity needs of these data centers.
Wells Fargo expects that “AI data centers alone could add about 323 terawatt-hours of electricity demand by the beginning of the next decade,” According to the article. Goldman Sachs believes that “data centers will take up about 8 [percent] of total U.S. electricity consumption by 2030.”
