The United States is engaged in an existential competition with China for superiority in Artificial Intelligence, AI. This technology promises to revolutionize economic activity and to determine the future of America’s national security. If China were to sprint ahead of the U.S. in AI, then America’s security and economic primacy would be diminished. The Chinese Communist Party would become the dominant global power. 

At the moment, the U.S. is ahead of China in the broad field of AI. The U.S. has superior designs for AI semiconductors. The U.S. has the advantage of having its AI chips fabricated by Taiwan Semiconductor Company, the world leader in semiconductor manufacturing. But the U.S. does not have an advantage in the production of the energy necessary to implement AI fully across its economy. China, by contrast, because it is a totalitarian state ruled by one person, Xi Jinping, can rapidly increase its energy infrastructure. China is not burdened by judicial review or the rule of law. That matters because energy is the critical roadblock to the rapid expansion of AI across the economy.

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Voters, frustrated by rising household energy bills, are threatening the deployment of AI. Bloomberg News says that electricity now costs 267% more than it did just a few years ago for a single month in data center hubs. AI consumes vast amounts of energy. Goldman Sachs Research forecasts power demand from data centers will increase 50% by 2027 and by as much as 165% by the end of the decade compared to 2023 power demand. A lack of sufficient energy has constrained the buildout of data centers for AI. The U.S. must invest about $720 billion in energy infrastructure to meet AI needs.

Increases in all forms of energy supply are necessary. The U.S. needs more natural gas power, more green power, more coal power and it needs an immediate increase in nuclear power. The U.S. needs this power today. One area of power supply that offers significant opportunities is small modular nuclear reactors, SMRs. These modular reactors can be designed, permitted, and constructed in four years, and maybe less. SMRs provide baseload power while generating no carbon emissions. It is a 24-hour, 7-day-a-week base load fuel.

SMRs are small nuclear power plants. They can be prefabricated and assembled in a factory, then transported to their final location. They are faster to build and to deploy. They are less complex than a full-size reactor and they cost significantly less to build and maintain. SMRs can adjust their electricity production to meet demand. An SMR operates similarly to traditional nuclear reactors but on a smaller scale. The core contains nuclear fuel, which releases heat through nuclear fission. This heat converts water into steam, which drives a turbine connected to a generator, thus producing electricity. The technology is essentially the same as that of a conventional nuclear power plant.

U.S. policy should promote the rapid build-out of SMRs. Importantly, the largest U.S. technology companies that are deploying AI would pay for the development and construction of SMRs. Households would not be burdened by rapidly rising energy bills. Fortunately, there are several companies that can deploy SMRs in the U.S.

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Oklo is an advanced nuclear technology company founded in 2013 by two Massachusetts Institute of Technology scientists. Sam Altman, the genius behind OpenAI, was prominent in the founding of Oklo.  TerraPower is another emerging SMR company. It was founded by Bill Gates of Microsoft fame. It is a recognized leader in SMR technology. Rolls Royce of the United Kingdom is also an important SMR company. Rolls Royce, which has significant U.S. operations, has been selected by the U.K. government to take the lead in deploying SMR facilities.

Time is of the essence in increasing the supply of energy to power AI data centers. Trump should make the deployment of SMRs a priority.

James Rogan is a former U.S. foreign service officer who has worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society. He can be followed on X and reached at [email protected].