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Behind The Meter: Nuclear’s Role in Powering the AI Era

By Marshall Williams | Published February 7, 2025

“Nuclear is an opportunity hiding in plain sight–we’ll insure it.” — Evan Greenberg, CEO of Chubb

January set 2025 off to a dynamic start for AI and energy as OpenAI, in partnership with SoftBank, Oracle, and MGX, unveiled its groundbreaking Stargate project—a $500 billion investment into AI infrastructure, primarily data centers and their behind-the-meter (BTM) power sources. BTM refers to energy systems on the customer’s side of the utility meter, enabling private power generation and reducing reliance on the traditional grid. Unlike traditional utilities, BTM is dedicated to one customer, not the entire grid. Big tech heavily invests in privatized power production to reduce compute costs while securing dedicated, high-reliability energy sources.

The Energy Expansion is Already Underway

The U.S. energy market is expanding rapidly to meet the soaring energy demand driven by AI and economic expansion. The current administration is lowering regulatory barriers, particularly in nuclear power, through the Federal Energy Regulatory Commission (FERC). This will power not only AI but also process manufacturing and other energy-intensive industries.

The partnership between tech giants and plant operators has been in motion for years, but now has the directorate support it needs to come to fruition. For example, AWS is finalizing a $650 million deal to secure nuclear power from the Susquehanna plant in Pennsylvania. This will increase a nearby data center’s power draw from 300 MW to 480 MW, boosting compute capacity by 60,000 additional cycles per second—or 30 million more average ChatGPT daily queries. And that’s just from one plant. Next-generation nuclear (GEN IV) reactors will provide even greater efficiency and scalability.

The Technical Advantage: Why Nuclear BTM Works

Locating energy-intensive facilities, such as a data center, a steel mill, or an oil refinery, next to nuclear plants eliminates transmission losses, enhances efficiency, and lowers energy costs. With a capacity factor of more than 90%, nuclear power ensures consistent, uninterrupted power—a crucial advantage over renewables, which fluctuate based on weather conditions.

By directly integrating with nuclear plants, BTM setups:

• Eliminate grid losses, improving economic performance.
• Increase reliability, bypassing grid instabilities.
• Enable real-time demand balancing, optimizing power usage.

Financing the Next Generation of Nuclear

Despite its advantages, nuclear historically struggled with financing due to high upfront costs and long regulatory timelines. However, private capital is reshaping the investment landscape, as will be explored at the Nuclear Financing Summit later this month:

• Private Equity & Institutional Investment: Firms like Segra Capital, BlackRock, Brookfield Renewable Partners, and Apollo Global Management are backing nuclear energy as part of their energy transition portfolios. Small Modular Reactors (SMRs) and GEN IV reactors lower capital costs and de-risk projects, making them more attractive to investors.
• Power Purchase Agreements (PPAs): AI clusters, semiconductor fabs, and data centers are securing multi-decade nuclear PPAs, which ensure stable pricing and bankability for new projects. By 2030, data centers are expected to consume over 10% of global electricity, making nuclear-backed PPAs a crucial part of the solution.
• Federal Support & Tax Incentives: The DOE Loan Programs Office (LPO) provides low-interest financing to accelerate commercialization. Investment & Production Tax Credits (ITC/PTC) now extend to nuclear, lowering developers' effective CapEx. However, further regulatory streamlining and risk mitigation strategies are needed to unlock full-scale investment.

Managing the Risks of BTM Nuclear

At Newfront, we specialize in nuclear risk management and are already working with leading players to insure emerging energy projects.

• Cyber Risk – Direct BTM connections between nuclear plants and tech infrastructure introduce critical cyber risks. We offer tailored coverage to mitigate downtime, disruptions, and safeguard sensitive data.
• Casualty & Liability – Proximity to high-risk energy sites increases liability exposure. We provide coverage for potential accidents, radiation risks, and catastrophic failures impacting employees and communities.
• Construction Risks – Developing BTM substations, microgrids, and nuclear integration projects requires specialized insurance for project delays, equipment failures, and workforce protection.

The Capital Acceleration Nuclear Needs

To fully realize nuclear’s potential in the AI-driven energy revolution, three conditions must be met:

1. Regulatory acceleration: Faster approvals to match market demand.
2. Expanded financial incentives: Strengthened tax credits and loan guarantees.
3. Stronger risk management: Tailored insurance solutions to de-risk investment.

The U.S. has a once-in-a-generation opportunity to position nuclear as the cornerstone of 21st-century infrastructure. At Newfront, we’re committed to helping our partners navigate the complexities of financing, insuring, and deploying next-generation nuclear solutions.

The Author

Marshall Williams

Associate Vice President

Marshall Williams specializes in AI, cybersecurity, and energy technology implementations. With experience helping businesses integrate AI-driven strategies, he focuses on improving operational efficiency, strengthening data security, and adapting to evolving regulations.