Regulatory Challenges for Amazon and Meta in Nuclear Power Ventures

Amazon, Meta, and Microsoft have heavily invested in nuclear power to meet the growing electricity needs for their data centers, fueled by the increasing demands of AI and cloud computing.

However, Amazon and Meta faced significant setbacks last week as a series of regulatory decisions made it clear that their aspirations for rapid electricity solutions through nuclear energy are not guaranteed. In contrast, Microsoft is still advancing its plans to restart a reactor at the iconic Three Mile Island location.

Surprisingly, the obstacles encountered by these companies are not directly related to the nuclear power technology itself. Instead, they highlight the difficulties of constructing large data centers without securing reliable, new energy sources beforehand.

Meta’s project involves establishing an AI data center adjacent to an existing nuclear power facility. Despite this strategic location, Meta encountered escalating regulatory challenges. CEO Mark Zuckerberg informed employees in a meeting that one notable issue arose due to the discovery of a rare bee species in the area. This situation reflects ongoing concerns about bee populations, which have been adversely affected by modern pesticides and other environmental pressures.

Similarly, Amazon has faced difficulties with its plan to construct a large hyperscale data center near the nuclear plant in Susquehanna, Pennsylvania. The firm intended to utilize a substantial amount of electricity from the facility. However, on November 1, the Federal Energy Regulatory Commission (FERC) voted 2-1 to reject Amazon's request for an expanded power agreement that would enable the company to connect directly to the nuclear plant.

The primary concern in Amazon's situation was that diverting a large quantity of power for its data center could potentially lead to reduced reliability for other customers in the region, risking brownouts or blackouts and incurring higher costs.

This regulatory intervention by FERC is likely not the last, as the commission still has at least eight more substantial co-location requests from other companies to review in the near future.

regulation, nuclear, technology