Nuclear Weapons of a New Age

Depending on where you are from, perspectives on nuclear power as a source of energy production can vary wildly. While France maintains a strong relationship with nuclear power as a ticket to energy independence in response to the oil crisis, those from the United States may feel an aversion to nuclear energy as a result of the Three Mile Island accident. How a nation’s population sees nuclear power depends on its history with it and other forms of clean energy production.

However, as climate concerns have grown in recent years, even nations with a historic distaste for nuclear power have been reassessing this energy source. The U.S. public now consistently polls in favor of nuclear energy production and support for nuclear energy has increased across the European Union in the past decade. The International Atomic Energy Agency (IAEA) forecasted in 2023, at the low end, a 40% rise in nuclear power capacity for 2024. Due to its high output efficiency, it was likely inevitable that nuclear energy would become a key energy source to power the green transition. However, the push for nuclear energy is about more than switching to cleaner energy sources – it’s part of the response to a global surge in energy demands.

This surge in demand is in large part due to the massive expansion of artificial intelligence usage. Powering AI requires data centers, large facilities which house racks of servers to host all the data that AI both uses and generates. These data centers have very high energy and water demands, to the point where they form a separate statistical category, accounting for 2% of global energy demand alone in 2024. To generate the energy necessary to power data centers, companies face a dilemma: mass purchases of fossil fuels would solve the issue, but they would also make achieving climate goals impossible. On the other hand, purchasing energy from cleaner sources is incredibly expensive for the scale required. To meet climate goals without burning money on expensive energy sources, companies are turning to nuclear energy. Microsoft has purchased the dormant reactor on Three Mile Island, and plans to reactivate it to generate power for its AI endeavors. Google has opted to buy the rights to future generated power from new reactor projects—specifically small modular reactors, which are a new form of nuclear power generation which is more efficient, and doesn’t require the massive cooling towers used in traditional nuclear energy production.

Nuclear energy is seen as a way for emerging economies to find “green growth,” or economic growth without significant reliance on carbon emissions. This has reinforced the aforementioned trend in the nuclear sector: demand for clean energy at scale overriding concerns about safety or memory of historical events. The World Bank, which often provides financing for projects in developing economies, has refused to finance nuclear reactor construction since 1959, citing safety concerns. However, Rafael Grossi, the bank’s Director General, has urged a change to the rules, and support for nuclear power expansion. World Bank support could make reactor construction more feasible for developing economies, encouraging investment in clean energy to power their growth.

However, it so happens that in the present absence of World Bank support, Russia has been ready and willing to help construct nuclear reactors for countries that want them. This has resulted in a form of “nuclear diplomacy,” which Russia has been using as a sanction-evading form of global influence. Rosatom, the country’s state-owned nuclear company, has been awarded contracts to construct the first nuclear reactors for Bangladesh and Turkey, and, as a whole, accounts for a third of all new nuclear reactor construction projects worldwide. This exposes the new weaponization of nuclear energy in politics — not as a weapon of war, but a weapon of energy influence. Nevertheless, this new “weapon” is the object of many safety concerns. Beyond nuclear diplomacy, the argument that nuclear reactors are a safety concern is laid bare by the Russian invasion of Ukraine. The Zaporizhzhia Nuclear Power Plant has been at the frontline of the war since its beginning, and experts have consistently highlighted this case as an example of the major safety concerns posed by nuclear power plants in conflict zones. While we now focus on nuclear power as an energy source, its potency as a geopolitical weapon has not reduced over time. In fact, it may be higher than it ever has been.

Russia’s role in nuclear energy is dominant throughout the supply chain. It accounts for an estimated 40% of uranium enrichment worldwide, which was exported globally before the war. Presently, Russia remains a major exporter despite the war in Ukraine. However, the sanction regime imposed by Western nations on Russia did include enriched uranium, causing demand for alternative sources of the material. This demand shock, combined with the spike in energy demand from AI and developing economies looking to power their economic growth, has led to inflated prices for uranium. Producers that are still on good terms with Western nations benefit from the demanding market which has excluded its largest supplier.

One of these nations is Kazakhstan, which is the world’s leading raw uranium producer. In response to soaring demand, the Kazakh government has announced increases of up to 18% on extraction tax for uranium ore starting next year. Another major uranium producer is Niger, which is seeking to leverage its uranium deposits on the global market after shaking off French economic dominance with a coup in 2023. Although historically uranium extraction in Niger was run by French corporations, the major nuclear energy firm Orano ceased operations in the country this year. Niger has pivoted to state-owned exploitation, leaving France—a nation which produces 70% of its energy with nuclear power—to seek alternative sources along with the rest of the Western world.

This scramble for nuclear power as the premier source of large-scale clean energy could not come at a more definitive moment in the energy market as it seeks to find an answer to its biggest problem: everyone needs energy.

With all the focus on sustaining AI and powering strong economic growth, the fact remains that higher costs for energy are passed onto the individual. We all need to pay for energy to power our homes. With AI increasing the power demands of data centers by 160% by 2030, a larger and larger portion of the energy we produce will go to powering it. Without an increase in supply, the cost of energy used to power homes will rise with demand. Training AI models, and allowing their daily use by the general population, can take significant levels of energy. This can result in shortages amongst nations with high energy demands, especially those which have specialized to store data. Ireland is one such country, where data center energy consumption now exceeds that of residential homes. If energy prices continue to rise as AI-driven energy scarcity ensues, the use of fossil fuels as a cheap source of energy at scale will only become more tantalizing.
The problem of the energy market today is then: can AI and the green transition co-exist? The increased demand for energy caused by digitalization and the rise of AI use threatens our capability to continue the switch to cleaner sources of energy. Nuclear power has eased this tension, but with inflating uranium costs and the rise of nuclear diplomacy, what should be a global effort to reduce emissions threatens to devolve into a geopolitical game. The world urgently needs to stabilize the demand for energy; we should use nuclear power as part of a wider portfolio of energy sources to increase supply of clean power, but an urgent audit of our energy use is necessary to avoid a new energy crisis and the derailment of the green transition.