A cooling tower at the Dampierre-en-Bully nuclear power plant operated by Electricity France (EDF) in Dampierre-en-Bully, France, Tuesday, May 3, 2022. France is traditionally a net exporter of electricity, so the combination of EDF’s decline in nuclear power generation and Russia’s invasion of Ukraine is exacerbating Europe’s energy crisis.
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Softbank”Plans to invest 75 billion euros in building AI infrastructure in France have underlined the country’s status as a leading hub, but analysts say Big Tech’s huge energy demands will put the continent’s entire power grid to the test.
Japan’s SoftBank on Saturday announced plans to build a 3.1 million kW AI data center in the northern Hauts-de-France region, including new sites in Dunkirk, Bosquell and Bouchamps, by 2031.
France, which meets more than 60% of its electricity needs from nuclear power, is particularly well placed to manage such energy-intensive projects at a time when Europe suffers from the highest industrial electricity prices of any major economy.
Experts previously told CNBC that this is an important advantage because power-hungry data centers are particularly energy cost-sensitive investments, leading companies to head to European regions where power costs are lower.
Last year, energy-intensive industries in Europe were on average about twice as expensive as in the United States and 50% more expensive than in China or India, according to the International Energy Agency.
Analysts told CNBC in May that they see a strong argument for increasing the importance of nuclear power as a key element of European countries’ energy strategies to help manage data center demand.
According to Eurostat data, nuclear power will account for just 11.8% of Europe’s total energy mix in 2025, while oil and gas will still account for more than a third.
Data center operators are looking to the next decade of power
Small modular nuclear reactors (SMRs) are attracting the attention of big tech companies in the United States. In 2024, Amazon announced an agreement with Virginia power company Dominion Energy to explore SMR development. In 2025, Google followed suit, signing a deal with Kairos Power and TVA to build a new nuclear power plant.
The nuclear power plants produced at these factories are much smaller than conventional nuclear reactors, typically with a capacity of 300 megawatts or less.
SMRs are typically designed to be mass-produced and shipped to the field, making them faster and cheaper to install than traditional reactors that can take a decade or more to become operational. It also does not require a grid connection to function, providing another important advantage for data center providers.
But the energy team at law firm Baker McKenzie says it will be difficult to deploy SMRs in large numbers.
Tania Arora, a partner in Baker McKenzie’s energy group, said in an interview with CNBC that data center operators are “looking at their power requirements for the next 10 years because ultimately their power requirements will be the driving force behind whether or not they can operate.”
“Many of them are considering nuclear SMR, but that’s a challenge. In my opinion, no data center operator is taking a first-time risk with SMR, and no data center operator is operating outside of China and Russia at this point.”
It’s not just energy availability that is driving Big Tech companies to invest in Europe. London’s talent pool is another.
Several US AI companies have recently announced major growth plans in London. This includes NVIDIA-backed Runway, which told CNBC on Monday that it plans to make London its new European headquarters.
Anthropic, OpenAI, and Google also announced plans to open new office space in London.
