13 Nov 2026
How Can AI Be Powered? Natural Gas, Nuclear and Small Modular Reactors
AI data centers need large amounts of electricity around the clock, and three sources of steady power have drawn particular attention: natural gas turbines, existing nuclear plants and new small modular reactors (SMRs). Gas can be built fastest but faces turbine backlogs that stretch toward 2030; existing nuclear plants offer carbon-free output but are limited in number; SMRs promise factory-built reactors but remain early in licensing and construction. Most forecasts expect data centers to draw on a mix of these sources alongside wind, solar, batteries and the existing grid.
How much power do data centers need?
The International Energy Agency estimated that data centers used about 415 terawatt-hours of electricity worldwide in 2024, roughly 1.5% of global consumption, and projected about 945 terawatt-hours by 2030.1 In the United States, Lawrence Berkeley National Laboratory estimated data centers used 4.4% of electricity in 2023 and could reach 6.7% to 12% by 2028.2
What makes AI loads distinctive is not only their size but their shape. Large training and inference campuses run near full output for most hours of the year, so operators look for power that is available at night, in winter and during calm weather. Our article on AI power and electrification covers the broader demand picture.
Why natural gas?
Gas-fired plants can be sited near demand, run continuously and ramp up and down to follow load. A combined-cycle plant pairs a gas turbine with a steam turbine that uses waste heat, raising efficiency. Some data center developers are building gas generation on site, either as primary power or as a bridge until grid connections arrive.
The constraint is equipment. A major U.S. turbine manufacturer said in December 2025 that it had sold out its gas turbines through 2028, and in July 2026 it said it expected to end the year with at least 125 gigawatts under contract, leaving it mostly sold out through 2030.3 A European competitor said in April 2026 that it was filling turbine orders for 2030 and 2031.4 Long lead times have pushed some developers toward smaller aeroderivative turbines, reciprocating engines, refurbished secondhand units and fuel cells.
Gas also carries risks: fuel price swings, pipeline capacity, permitting, and the emissions goals of utilities and data center owners.
What role do existing nuclear plants play?
Existing nuclear plants produce steady, carbon-free power and run at high capacity factors. Several technology companies have signed long-term agreements to buy output from operating plants, to support upgrades that raise output, or to restart retired reactors. These deals can add supply faster than new construction, but the pool of available plants is limited, and some arrangements that place data centers next to plants have raised questions from regulators and grid operators about costs for other customers.
What are small modular reactors?
SMRs are nuclear reactors designed to be smaller than conventional plants, typically up to about 300 megawatts per unit, and built largely from factory-made modules. Proponents argue that standardized designs and factory production could lower costs and shorten construction times, and that smaller units can be sited closer to industrial loads or data centers.
Licensing has advanced. In May 2025, the U.S. Nuclear Regulatory Commission approved an uprated 77-megawatt-electric SMR design, the second SMR design it has approved.5 The same month, a federal utility submitted a construction permit application for a 300-megawatt boiling water SMR.6 Design approval does not authorize construction; each project still needs site-specific permits and licenses.
The main uncertainties are cost and timing. First-of-a-kind nuclear projects have historically run over budget and behind schedule, and the supply chains for fuel, including high-assay low-enriched uranium for some advanced designs, are still developing. Most SMR developers point to the end of this decade or the early 2030s for initial commercial operation.
How do these sources compare?
Speed to power. Gas is generally fastest to build once turbines are available. Existing nuclear can be contracted quickly but adds new supply only through upgrades and restarts. SMRs have the longest path.
Output profile. All three can run around the clock, unlike wind and solar without storage.
Emissions. Nuclear produces no direct carbon emissions. Gas emits carbon dioxide, which some projects plan to address with carbon capture.
Cost certainty. Gas plants have well-understood construction costs but variable fuel costs. Nuclear has high upfront costs and low fuel costs, with construction cost risk for new designs.
What does this mean for investors?
Power for AI connects thematic investing to utilities, independent power producers, turbine and engine manufacturers, nuclear fuel suppliers, reactor developers and the engineering firms that build plants. Each carries different risks: regulated utilities face rate decisions, merchant generators face power price swings, and reactor developers face technology and licensing risk. Our articles on grid transformers and how data centers work look at related parts of the buildout.
Frequently asked questions
Why can’t data centers rely only on solar and wind?
Many data centers do buy large amounts of wind and solar power. But AI campuses typically run around the clock, and solar and wind output varies with weather and time of day. Covering every hour requires storage, grid backup or firm generation. Batteries help with hours of shifting, but multiday shortfalls remain costly to cover with storage alone today.
What is a small modular reactor?
A small modular reactor is a nuclear fission reactor designed with a smaller output than traditional plants, typically up to about 300 megawatts of electricity per unit, and built largely from standardized, factory-made modules. Several designs are in development in the United States and abroad, using light-water cooling or advanced coolants such as molten salt, sodium or high-temperature gas.
Has any SMR been built in the United States?
As of November 2026, no commercial SMR was operating in the United States. The Nuclear Regulatory Commission has approved two SMR designs from one developer, and utilities and developers have filed construction permit applications for several projects. Developers generally target commercial operation around the end of the decade or the early 2030s, subject to licensing, financing and construction.
Why are gas turbines sold out?
Demand for gas turbines has risen from data centers, utilities replacing older coal plants, industrial electrification and growing power needs abroad. Turbine manufacturers had reduced capacity during years of weak demand and are expanding cautiously. Large-frame turbines require specialized parts, such as high-temperature blades, that take years to scale up. The result is backlogs stretching toward 2030.
Do AI companies own power plants?
Some do, and many more sign long-term power purchase agreements with utilities or generators. Arrangements include buying output from existing nuclear plants, financing new gas or nuclear projects, building on-site generation, and investing in early-stage reactor and fusion companies. Each structure carries different costs, risks and regulatory treatment, which can affect both the buyer and other utility customers.
How do thematic ETFs cover AI power?
Some AI infrastructure, electrification, utilities or nuclear-themed ETFs hold companies that generate power, build equipment or supply fuel. Exposure to AI-related demand varies widely, since many of these companies also serve broad industrial and residential markets. Reviewing holdings, revenue sources and the fund’s methodology helps investors see how much AI-linked power exposure a fund actually provides.
- International Energy Agency, “Energy and AI,” April 2025.
- Lawrence Berkeley National Laboratory, “2024 United States Data Center Energy Usage Report,” December 2024.
- GE Vernova, investor conference remarks, December 2025, as reported by Gas Processing News; GE Vernova second-quarter 2026 earnings call, July 22, 2026, as reported by Benzinga.
- Siemens Energy remarks at the Southeast LDC Gas Forum, April 9, 2026, as reported by Argus.
- U.S. Department of Energy, Office of Nuclear Energy, “NRC Approves NuScale Power’s Uprated Small Modular Reactor Design,” May 30, 2025.
- American Nuclear Society, Nuclear News, industry update, May 30, 2025, reporting the Tennessee Valley Authority’s construction permit application for a BWRX-300 at the Clinch River site.
Cite this page: Adam Patti, "How Can AI Be Powered? Natural Gas, Nuclear and Small Modular Reactors," VistaShares, updated November 13, 2026, https://www.vistashares.com/power-for-ai-gas-nuclear-smr/. Plain-text version.
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