Powering the Intelligence Revolution: How Small Modular Reactors (SMRs) Can Fuel India’s AI Data Centre Boom

India’s Artificial Intelligence (AI) ecosystem is witnessing explosive growth, driven by the expansion of GPU-based data centres by both global tech giants and domestic players. These large-scale facilities require continuous, high-density, and clean power — a challenge given India’s current energy mix and grid constraints. The government’s renewed focus on Small Modular Reactors (SMRs) presents a potential solution to sustainably power this AI revolution.

What Are Small Modular Reactors (SMRs)?

• SMRs are compact nuclear reactors that can generate between 50–300 MW of electricity, built using modular, factory-based manufacturing.

• They are safer, scalable, and quicker to deploy than traditional nuclear plants.

• SMRs can be installed close to industrial hubs or large energy consumers like data centres, reducing transmission losses.

India’s Push for SMRs

• The Union Budget 2025–26 earmarked funds to accelerate indigenous SMR development and open avenues for private sector participation.

• India aims to deploy commercial SMRs by the early 2030s, aligning with its Net Zero 2070 targets.

• Policy focuses streamlining licensing, siting, and financing for modular nuclear projects.

Why SMRs Fit AI Data Centres

1. 24/7 Reliable Power: AI training clusters require uninterrupted supply — SMRs provide stable baseload energy unlike intermittent renewables.

2. Compact Footprint: Ideal for urban or coastal industrial zones, where land is limited.

3. Scalable Deployment: Modules can be added as data centres expand — matching AI infrastructure growth.

4. Low Carbon Intensity: Helps companies meet ESG and sustainability targets.

5. Long-term Cost Stability: Shields data-centre operators from volatile fossil-fuel prices.

Challenges

• Regulatory Delays: Licensing and safety approvals remain complex and time-consuming.

• Public Perception: Nuclear energy faces concerns over safety and waste disposal.

• High Initial Costs: Requires new financing models, such as Power Purchase Agreements (PPAs) between SMR operators and data-centre companies.

• Grid Integration: Co-location and heat reuse technologies need further R&D and infrastructure investment.

Way Forward

• Government: Establish fast-track SMR licensing, provide financial guarantees for first-mover projects.

• Private Sector: Collaborate with nuclear firms for captive SMR power plants near AI data hubs.

• Industry Pilots: Launch demonstration projects in tech corridors like Hyderabad, Chennai, and Navi Mumbai.

• Research Collaboration: Involve BARC, NPCIL, and startups for AI-integrated energy management systems.

Significance

• SMRs can become the backbone of India’s AI infrastructure, ensuring energy security, sustainability, and scalability.

• This synergy between nuclear innovation and digital transformation could position India as a global hub for low-carbon AI computing.

• Long-term vision: SMR-powered AI cities that combine clean energy, advanced computing, and industrial innovation.

Fact Box

• SMR Output: 50–300 MW per module

• Global Leaders: USA, Canada, Russia, China

• India’s Goal: First operational SMR by early 2030s

• AI Data Centre Growth: Expected 33% annual rise in capacity through 2030

• Potential Model: SMR + AI Hub = Clean, Continuous, Compact Power Ecosystem