When World Bank president Ajay Banga signalled his willingness to drop the institution's ban on funding nuclear energy projects, it marked a moment when the institution aligned closer with President Donald Trump's administration, which is seeking to usher in a so-called nuclear renaissance in its quest to be the world's dominant player in artificial intelligence.
The World Bank has not supported nuclear energy since 1959 but the potential for a clean alternative to fossil fuels and the advancements promised by the advent of AI are leading to a resurgence in demand.
“Small nuclear reactors could be transformative,” Mr Banga said during a recent event hosted by the Economic Club of Washington. He hopes to introduce it to the board next year.
Mr Banga framed his reasoning behind the growing demand for electricity needed to lift developing areas out of poverty. “You're not going to do that by thinking like yesterday. You have to change that paradigm,” he said.
But that shift at the World Bank would ostensibly align it with Republicans in Congress who are pushing for a bill that would support financing nuclear energy through development banks. The bill, initially introduced in 2023 before being rekindled, would also advocate the establishment of a nuclear energy assistance trust fund.
Rachel Ziemba, founder of Ziemba Insights and senior adjunct fellow at the Centre for a New American Security, said the World Bank supportingnuclear energy could stave off some disappointment from the Trump administration over the funding of renewable projects.
“I'm sure that the World Bank's president is still coming from that point [of view],” she said.
This comes as the US renews its push to invest in nuclear energy. Energy Secretary Chris Wright has called it “the long-awaited American nuclear renaissance”.
Data centres housing AI projects require immense amounts of energy, explained Cullen Hendrix, a senior fellow at the non-partisan Peterson Institute for International Economics think tank in Washington.
According to a study by the Lawrence Berkeley National Laboratory in California last year, data centres will consume between 6.7 per cent to 12 per cent of US electricity by 2028, up from 4.4 per cent in 2023. Total electricity usage from these data centres will rise from 176 Terawatt-hours (TWh) in 2023 to between 325 and 580 TWh by 2028.
“To put that in perspective, 580 TWh is about as much energy as the entire country of Brazil, home to 210 million people, consumed in 2023,” Mr Hendrix told The National via email.
Former president Joe Biden's administration created plans in the his final months in office to at least triple US nuclear energy capacity by 2050. He also hailed bipartisan legislation passed last summer that the administration said would help secure a clean-energy future.
In the early months of his second term, Mr Trump has made a series of moves to step up America's AI dominance, including declaring a national energy emergency.
The White House served as the backdrop of an announced investment up to $500 billion from Oracle, OpenAI and SoftBank to develop AI infrastructure in the US and the electricity needed to develop it. UAE-based technology fund MGX joined the project as an initial equity financier.
Mr Trump has touted this project and other developments in AI infrastructure since before his inauguration. Several of those pledges have come from the UAE – itself an important player in advanced technology. The US and UAE also collaborate on peaceful nuclear co-operation through the "123 Agreement" signed in 2009.
“This is a key part of the story,” said Ms Ziemba.
The White House last week announced the UAE had committed to a 10-year, $1.4 trillion investment framework to step up the Emirates' existing investments in the US involving AI infrastructure, semiconductors, energy and manufacturing.
“Co-operating and investing in nuclear facilities is definitely something that the US and UAE will be talking about, along with their ongoing conversations about AI more generally,” Ms Ziemba said.
Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, called for more nuclear and other energy sources to meet rising electricity demand. The UAE sees the US as a major business partner in technology and energy.
Mr Al Jaber's remarks at an annual energy conference in Houston echoed Mr Wright's own speech at the same event, arguing the US must have access to reliable and affordable energy if the country is to win the AI race.
“It takes massive amounts of electricity to generate intelligence. The more energy invested, the more intelligence produced," Mr Wright said. "Since the demand for energy is unlimited, since the demand for intelligence is unlimited, so will be the demand for energy."
