Power for AI Data Centers: New Race Between Fuel Cells and Mini Nuclear Reactors
Münster (Germany) – According to forecasts, global electricity demand will increasingly be driven by artificial intelligence, cloud services, and the digitalization of industrial processes. So far, many data center operators and investors have focused primarily on small modular reactors (SMRs) – baseload-capable mini nuclear power plants considered a key technology for stable energy supply.
Fuel Cells: Immediately Available, Baseload-Capable, and Highly Flexible – Tailor-Made for AI Data Centers
Oracle and Bloom Energy have announced a strategic partnership that could fundamentally change how AI data centers are powered. Bloom Energy will implement its fuel cell technology at selected Oracle Cloud Infrastructure (OCI) data centers in the USA.
What makes the solution particularly attractive for companies like Oracle is the combination of technical maturity and rapid deployment: The compact systems can be installed within 90 days – directly on-site at the data center, without the need for additional power lines or grid connections. Thanks to their modular design, performance can be scaled flexibly: The higher the energy demand, the more cells can be added.
Flexibility, scalability, baseload capability, and independence are key advantages in a time when AI clouds require highly available energy in real-time. The fuel cell systems are powered by hydrogen – currently still often using gray hydrogen from natural gas, but in the future potentially operable with green hydrogen: climate-neutral and locally produced.
Financial markets responded positively: Bloom Energy’s stock rose by nearly 23%, reaching its highest level in three years. Analysts from UBS and JPMorgan significantly raised their price targets – to $51 and $33 respectively – underscoring confidence in the potential of sustainable energy solutions for AI infrastructure.
Small Modular Reactors: Long Construction Times, High Investment, Limited Scalability
For a long time, small modular reactors (SMRs) were considered a serious alternative to fossil power plants for powering high-performance data centers. Recently, U.S.-based NuScale Power reached an important milestone: In May 2025, the U.S. Nuclear Regulatory Commission (NRC) granted Standard Design Approval (SDA) for the 77-megawatt model of the NuScale Power Module™.
However, this approval is only an initial step. Several critical phases are still required to build a prototype, including site selection, permitting, financing, and actual construction. The next decisive step is applying for and obtaining the “Combined License” (COL) for a specific location. Only with this license the construction of the first SMR prototype can begin.
Although SMRs are considered climate-friendly and baseload-capable, their implementation is complex, costly, and not immediately available. Even the most advanced projects in the USA – such as those from NuScale or X-Energy – are not expected to go online before 2029. Lengthy approval processes, extensive safety requirements, and high capital investment make SMRs long-term but also high-risk mega projects.
In addition, there are uncertainties regarding actual construction costs, timelines, and regulatory hurdles – which often face political resistance. For technology-driven companies that need to scale now and build new data centers quickly to remain competitive, SMRs are simply too late – even if they could contribute to decarbonization in the long run.
Source: IWR Online, 01 Aug 2025
