Atomic impact: Nuclear-powered AI infrastructure could be India’s geopolitical moat

When the newly erected massive turbine at the heart of the quiet beach town on Bay of Bengal starts spinning, it will fuel not just India’s pursuit of energy independence but also its ambitions to be a global data centre powerhouse in the AI-altered world.

On April 6, the 500 MWe Prototype Fast Breeder Reactor (PFBR) at Kalpakkam attained criticality. It reached the point where a controlled, self-sustaining nuclear chain reaction begins. In a matter of months, the new turbine will start generating power.

The commissioning of Kalpakkam PFBR, the landmark event in India’s nuclear journey, was followed by a critical policy move. Last week, the centre set in motion the process to invite bids for 220 MWe small modular reactors. Meaningful private participation is beginning to take shape as India plans a 3x rise in nuclear power capacity to 22.38 GW in the next six years.

This is exciting news for India’s red-hot data centre industry, which is chasing global AI compute hub status. An industry executive calls prospective nuclear energy-powered AI infrastructure India’s “geopolitical moat”. Reliable, clean, round-the-clock power could determine where global compute infrastructure is deployed in the coming decades.

“Across the world this is becoming a bottleneck —the availability of compact footprint-clean and reliable 24/7 stable energy,” said Anil V Parab, whole-time director and senior executive vice president, heavy engineering & manufacturing at Larsen & Toubro (L&T). “If we scale up the nuclear programme and with independence on fuel availability, obviously, it will be an advantage,” Parab said. With Kalpakkam PFBR, India has become only the second country to achieve commercial-scale fast breeder capability, strengthening its prospects amid rising clean power demand for data centres. There’s a long way to go. India is still several years away from Stage 3 of its nuclear programme, which is based on abundantly available thorium, which could unlock energy self-reliance for nearly two centuries. At the same time, the SHANTI (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) Act has opened up the sector to private participation in nuclear power generation with conglomerates like JSW, Adani and L&T already laying their long-term strategy.

Experts say this advantage extends beyond energy security into digital sovereignty. “If India aligns its nuclear roadmap with data centre policy, land and fibre infrastructure, it can position itself as a global hub for sustainable AI compute,” said Vinish Bawa, partner and leader, telecom, at PwC.

At a time when the US is exploring frontier ideas such as space-based data centres, experts believe India’s opportunity lies in building cost-efficient, local infrastructure powered by nuclear energy. “India has a structural advantage… uranium reserves, the world’s largest thorium deposits, an advanced indigenous nuclear programme, and now, a regulatory reform in motion,” said Piyush Somani, MD at data centre company ESDS Software Solutions, adding that nuclear-powered AI infrastructure could become a “geopolitical moat” for the country.


The Nuclear Moat

“Data centres and GPU clusters don’t just need electricity—they need guaranteed, uninterrupted, carbon-neutral electricity at scale…That is a very specific ask, and nuclear is perhaps the only baseload source that checks all three boxes simultaneously,” Somani explained. Unlike renewable energy sources such as solar and wind, which are inherently intermittent, nuclear power offers stable baseload supply.

However, industry leaders caution that nuclear power will not be an immediate solution. PwC’s Bawa noted that nuclear power’s contribution to data centre energy demand will likely become meaningful only after 2032, with large-scale impact closer to 2040. In the interim, India is expected to adopt a hybrid approach, combining renewables for cost efficiency with nuclear for grid stability and reliability.

Somani estimated that the first wave of nuclear-linked data centre parks could begin taking shape between 2030 and 2035, as advanced reactor technologies such as thorium-based systems move closer to commercial deployment and policy frameworks evolve to support private participation.


The critical five years

“The next five years are the policy and partnership window, the actual compute infrastructure buildout will ride the wave that follows,” he said, urging policymakers to begin drafting nuclear-data centre co-location frameworks immediately. “If you see the GST tax, the nuclear sector, it is 18%. Renewable, it is 5%. So that is the inherent disadvantage,” he said. He also called for nuclear to be classified as green energy to lower financing costs. “When you declare it as a green energy, the cost of capital gets a 2% advantage,” he said.

For emerging technologies such as small modular reactors, Parab said, government support would be essential in the early stages. “They will have to give at least viability gap funding till the critical scales are available,” he said, drawing parallels with the early policy support that helped scale solar power and LED adoption in India. Despite its long-term potential, nuclear power remains expensive relative to other sources. Parab said India’s indigenous reactors cost about `20-21 crore per MW, while imported technologies are 3-4 times higher. Given these economics, the viability of nuclear projects, especially for private players or captive use by data centres, will depend on clear demand visibility.

Nuclear Energy Global Landscape

Rising energy demand from data centres, driven by generative artificial intelligence, is pushing nuclear power back into focus as a viable source of large-scale, reliable energy. Over the past few years, startups and large technology companies have stepped up investments in nuclear energy as they look to meet the growing power needs of AI infrastructure. A 2025 Goldman Sachs report estimates that data centre power demand will rise 160% by 2030. Nuclear energy is expected to play a key role in the mix of new infrastructure required to support this surge, according to the report. Swathi Moorthy looks at the emerging nuclear energy landscape and companies powering them.