Will nuclear power fuel AI centers in America?

Washington, DC – Oct 21, 2024 Paolo von Schirach, President, Global Policy Institute; Professor of Political Science and International Relations at Bay Atlantic University, explained that AI revolution is gaining momentum in America. NVIDIA, maker of the coveted chips which constitute AI’s key components (85% of global supply), from nowhere reached a market capitalization of about $ 3.4 trillion, becoming overnight the second most valuable company in the world –higher valuation than Microsoft or Saudi Aramco. Having taken notice of the unfolding revolution, all the major tech companies have jumped into the AI space hoping to reap incredible profits.

That said, the AI revolution has created an unforeseen major problem for tech companies. AI data centers consume massive amounts of electricity. To date, America simply does not produce enough electricity to power the numerous AI data centers the tech companies want to develop as soon as possible. Big tech already consumes 4% of all electricity in the U.S. Soon enough it will be 9%. Where will all this additional electricity come from?

Any realistic projection of increased electricity supply in the U.S. does not come even near to the amounts AI data centers will need to operate at full capacity. Even if we could assume a dramatic increase in solar and wind electricity supply, the enormous power needs of the AI industry will not be met.

That said, the big tech companies are developing their strategies. And they have a basic element in common: nuclear power.

According to a CNBC report, Google indicated that it would focus on small nuclear reactors developed by Kairos Power, to “deliver on the progress of AI.” The first small reactor dedicated to support Google should become operational in 2025.

And Microsoft is also going nuclear. Part of the once defunct Three Mile Island nuclear power plant in Pennsylvania, site of a major accident many in March 1979, will come back online to supply Microsoft, based on a deal with Constellation, the provider.

According to the CNBC report above cited, Michael Terrell, senior director for energy and climate at Google, recently stated that: “The grid needs these kinds of clean, reliable sources of energy that can support the build out of these technologies….We feel like nuclear can play an important role in helping to meet our demand, and helping meet our demand cleanly, in a way that’s more around the clock.”

Amazon will follow a similar path, via a deal with Dominion Energy whereby small nuclear reactors will supply the tech giant that already operates an enormous cloud business.

But here is the problem. In the U.S. building “classic” nuclear reactors has become a horrendously expensive, time-consuming enterprise. There are endless lists of environmental assessments, permits, licenses and insurance requirements. Not to mention almost guaranteed lawsuits brought by environmentalists and other lobbies aimed at blocking construction. Therefore, it is impossible to assume that the construction of new, big reactors will satisfy future AI industry’s needs.

Small nuclear reactors look much more promising. They are safe and more cost-effective. Still, this technology, while it passed many important tests, is still literally in its infancy. It is just not credible to posit that all or most new, electricity hungry, AI center will have all the power they need as soon as they become operational. Unless, of course, some new, disruptive energy production innovation comes to the rescue. Let us hope for innovation!

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Electric airplanes for short flights

By Paolo von Schirach

President, Global Policy Institute; Professor of Political Science and International Relations at Bay Atlantic University, both in Washington, DC

Unlike in Europe, Japan or China, in America passenger railways have been neglected. While this may change in the future, at this time there are no fast trains networks. The only exception is the “Eastern Corridor” (Washington, DC – New York City – Boston) that is served by semi-fast trains. For the rest of the large country, to travel from point A to point B Americans have essentially two choices: drive or fly. However, large commercial carriers do not fly to small cities.

And here is the business opportunity for innovators who are busy producing short haul electric airplanes that would fly short distances relying on a vast network of underutilized small airports. In the U.S. there are several airplane manufacturers in this new space. Among them: Beta Technologies, Joby Aviation, Archer Aviation, Airflow, and Pyka, all of them California based. But big giants like Boeing and Airbus in Europe are also working on their electric planes prototypes.

Large electric airplanes flying long distances are technically and financially impossible. They would make no economic sense for airlines. The main problem is the weight of the batteries. To fly long distances, a large airplane would need many large batteries weighing several tons. With this huge weight handicap, it would be impossible to carry many passengers. Airlines could not make any money.

Whereas for short flights the picture changes entirely. We are talking about 250 miles, or about 400 km, on a small airplane powered by an electric motor that could carry 7 to 9 passengers.

And why would anybody want to start this type of business? Very simple. There must be many people who would rather not drive 3 or 5 hours to get to a destination not served by traditional commercial air carriers. A short flight on an electric airplane could be relatively inexpensive, because the small airlines would have much lower operating costs compared to carriers operating turboprops, and therefore would be profitable, even charging low prices for their tickets.

How could they be profitable? Well, to begin with, because of much lower fuel cost. Charging the batteries of the airplane would cost a few dollars. Refueling a turbo-prop plane for the same trip costs several hundreds of dollars. Besides, electric motors are low maintenance. They do not require the constant overhaul of conventional engines. Therefore, given lower operating costs, this could be a good business, considering that regional airlines flying electric planes could take advantage of about 5,000 underutilized small airport in the U.S.. (Commercial carriers limit their operations to about 30 large U.S. airports).

I a word, the basic infrastructure needed for this new business is already there, ready to be used. New regional carriers flying low cost electric planes will have to identify the most promising routes and then convince people who would normally drive to take their planes instead, for speed and convenience.

And there is more. Some companies are working on vertical takeoff and landing electric planes that would be a combination of helicopter and airplane. They could be used as small cargo planes to deliver medical equipment or other important merchandise on a helipad in an urban area. Companies operating them would have an advantage because their operating costs would be much lower than those associated with helicopter services. Same arguments apply. Much lower fuel costs. Lower maintenance costs.

Is this a small transportation revolution in the making? Time will tell. But the technology for reliable small electric planes is there. Some are only    a few steps away from certification. And the cost analysis suggests that new airlines focused on short haul services using electric aircraft will be profitable.

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