Stargate's Renewable Power Strategy for AI Development

The ambitious $100 billion venture known as Stargate is set to incorporate solar energy and battery storage as significant elements of its power strategy.

According to reports, renewable energy systems will be established by SB Energy, a company backed by SoftBank. However, solar and battery power may not be the only energy sources for the project. Stargate is a collaboration involving OpenAI, Oracle, and SoftBank Group, which plans to develop numerous new data centers to support artificial intelligence initiatives.

The surge in cloud computing and AI technologies has prompted developers and technology firms to seek reliable energy supplies urgently. The U.S. Department of Energy projects that by 2028, data centers could account for as much as 12% of total energy consumption in the United States, a significant increase from 4.4% in 2023. This impending energy challenge could result in approximately 50% of new data centers lacking adequate power by 2027.

Nuclear energy has gained traction as a favored option among data center developers and tech companies. For instance, Google has partnered with the nuclear startup Kairos for a deal involving 500 megawatts of power, while Microsoft has plans to revive one of the old reactors at Three Mile Island. Similarly, the data center operator Switch entered into an agreement in December with Oklo, which focuses on small modular reactors, for a total capacity of 12 gigawatts.

Despite enthusiasm for nuclear power, recent developments in the sector are marred by budget overruns and project delays. Many new nuclear startups emerged to tackle these challenges by modularizing and mass-producing components for reactors. If successful, this approach could streamline the approval process and expedite the construction of new nuclear energy facilities.

However, none of these startups have yet completed any reactors, and the first commercial plants are not expected to begin operations until 2030, which does not address the imminent energy shortage. Moreover, natural gas power plants, another alternative for supplying data centers, require several years for construction as well.

In contrast, solar and wind energy projects can be deployed much more rapidly. Studies have shown that, on average, these renewable energy facilities can be completed in about half the time it takes to build nuclear or natural gas plants. Recent estimates indicate that a solar power plant can typically be operational within 18 months. Their modular design allows for energy production to start even before the entire project is finalized.

The most time-consuming aspect of solar energy projects usually involves permitting and connecting to the electrical grid. For data centers, direct power supply from the source bypasses this requirement. Given the urgency behind the Stargate initiative, it is plausible that the permitting process could be expedited, making solar energy a likely candidate to power the first data centers.

solar, AI, energy