U.S. Data Centers Spur Calls for Nuclear Power Comeback

Proposed ARC Act aims to help reduce costs and risks of new nuclear plant construction.

Published on Mar. 9, 2026

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As data centers like xAI's Colossus in Memphis draw increasing amounts of electricity from the grid, experts warn that the U.S. power supply may struggle to keep up with accelerating demand, particularly from the growing data center industry. To meet this challenge, some are calling for a revival of nuclear power, which they see as the only proven clean energy source capable of providing firm power at scale in the coming decades. However, the high costs and financial risks of new nuclear plant construction have hindered progress. The proposed ARC Act aims to help share these first-of-a-kind costs and risks, potentially paving the way for a new wave of nuclear development.

Why it matters

The rapid growth of data centers like Colossus, which can draw as much power as a small city, is straining the U.S. electricity grid and highlighting the need for more reliable and scalable clean energy sources. Nuclear power is seen as a potential solution, but its high costs and financial risks have been a major barrier. The ARC Act proposes a targeted federal risk-sharing mechanism to help kickstart new nuclear plant construction and reduce the burden on ratepayers.

The details

Data center demand in the U.S. is projected to reach 106 gigawatts by 2035, far outpacing the growth of intermittent renewable energy sources like solar and wind. This gap between supply and demand could lead to higher electricity prices and reliability issues. While advanced geothermal and mitigated natural gas offer promise, nuclear power is the only proven clean energy source that can deliver firm power at scale in the 2030s and 2040s. However, the high costs and financial risks of new nuclear plant construction have hindered progress. The proposed ARC Act aims to share these first-of-a-kind costs and risks, potentially making new nuclear projects more viable.

  • xAI's Colossus data center opened near Memphis, Tennessee in July 2024.
  • BloombergNEF estimates U.S. data center demand could reach 106 gigawatts by 2035.

The players

xAI

A company that operates the Colossus data center near Memphis, Tennessee, which draws roughly 150 megawatts of electricity continuously from the grid.

Jim Risch

A Republican senator from Idaho who recently introduced the ARC Act, a targeted mechanism to share first-of-a-kind cost risk for new nuclear plant construction.

Ruben Gallego

A Democratic senator from Arizona who recently introduced the ARC Act alongside Senator Risch.

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What’s next

The Department of Energy's Office of Energy Dominance Financing is already working with utilities to underwrite perhaps a dozen new nuclear reactors with targeted go-live dates from 2031 to 2035.

The takeaway

The rapid growth of data centers is straining the U.S. power grid, highlighting the need for more reliable and scalable clean energy sources like nuclear power. The proposed ARC Act aims to help reduce the financial risks and costs associated with new nuclear plant construction, potentially paving the way for a nuclear power comeback to support America's AI-driven future.