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TerraPower Bets On Energy Storage To Power AI Data Centers

Nuclear startups are increasingly looking to data centers as demand for reliable electricity surges with the growth of AI. TerraPower, founded by Bill Gates, is among the companies pursuing that opportunity and is expected to announce its first data center project this year.

The company has not disclosed the customer. In January, however, TerraPower announced that Meta had agreed to buy eight of its Natrium power plants. Its first reactor is already under construction in Wyoming, while the planned data center project is expected to break ground in 2027.

Why Energy Storage Matters

TerraPower’s main advantage could be its approach to energy storage.

Nuclear reactors are designed to operate most efficiently at full capacity. U.S. nuclear plants generate at maximum power around 92.5% of the time, but conventional reactors can adjust their output relatively slowly. Even newer small modular reactors can face economic challenges when operating below capacity because nuclear plants are expensive to build.

That creates a problem for AI data centers, where electricity demand can change rapidly as GPUs handle training workloads and user requests. Batteries can help smooth those fluctuations, but add another layer of cost.

Storing Heat Instead Of Cutting Reactor Output

TerraPower’s 345-megawatt Natrium reactor takes a different approach. Rather than quickly increasing or reducing the reactor’s output, it continues producing heat and stores excess energy in molten sodium.

When electricity demand rises, that stored heat can be used to generate additional steam and increase turbine output. This allows the reactor to keep operating efficiently while still responding to changes in demand.

The technology was originally designed to work alongside intermittent renewable sources such as wind and solar. For data centers, however, the same flexibility could help manage rapidly changing power demand.

By combining nuclear power’s high capacity factor with thermal energy storage, TerraPower aims to provide a more flexible source of electricity for large-scale AI infrastructure.

AI Is Everywhere, But Consumers Are Growing More Skeptical

AI is advancing rapidly, but public enthusiasm is moving in the opposite direction. Recent surveys show that more Americans are becoming concerned about the technology, while growing opposition to data centers is turning AI’s social acceptance into a business and political challenge.

A Pew Research study found that 52% of Americans are now “more concerned than excited” about the growing use of AI in daily life, up from 37% in 2021. A May Economist/YouGov poll also found that more than 70% believe AI is developing too quickly.

The political backlash is becoming harder to ignore. Axios reported that the National Republican Senatorial Committee warned major AI companies that data center projects could hurt Republican candidates in a key Ohio election.

AI’s Growing Reputation Problem

Public concern is also showing up among younger Americans. A CNBC poll found that most respondents aged 18 to 34 did not trust nine leading AI executives to act responsibly on AI.

For many consumers, AI is increasingly associated with chatbots, AI-powered search and features appearing inside everyday products, rather than with major improvements to their lives. Google has transformed Search with AI, while companies are adding AI to products ranging from email to televisions.

At the same time, people are hearing about AI being used by students to cheat, while companies face disputes over copyrighted material used to train models and generate art, music, video and writing.

That combination is creating a difficult perception: consumers are being asked to accept the disruption caused by AI without necessarily seeing enough personal benefit in return.

Data Centers Add To The Backlash

The problem extends beyond software. Tech companies are spending enormous sums building AI data centers, but communities are increasingly pushing back over issues including electricity demand, water use and infrastructure.

According to The Wall Street Journal, companies are responding with additional incentives such as employment commitments and investments in local infrastructure. One Louisiana project even included $50,000 bonuses for teachers.

Meanwhile, some consumers are gravitating toward technology that feels deliberately less connected. Young people are showing renewed interest in dumbphones, point-and-shoot cameras, cassette players and CD players. AI-free classic iPods are also attracting attention, while offline hobbies and in-person activities are gaining popularity.

The Industry Is Starting To Take Notice

Some technology executives believe the backlash is partly a communication problem. Others are increasingly acknowledging that consumers may understand AI perfectly well but simply don’t consider its current benefits worth the trade-offs.

Airbnb CEO Brian Chesky recently said on a podcast that the industry needs to build products that ordinary people genuinely value, rather than focusing primarily on AI itself.

Anthropic CEO Dario Amodei similarly described negative perceptions of AI as a “big problem” and a “crisis of trust” in a post on X. In his view, the strongest response would be for AI companies to actually deliver on their biggest promises, including breakthroughs that could significantly improve people’s lives.

For an industry that has attracted hundreds of billions of dollars on the expectation that AI will transform everyday life, technological progress alone may no longer be enough. The bigger challenge could be convincing people that they are actually better off because of it.

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