Tech giant Alphabet-owned Google (GOOGL) is gazing into the sun to find the future power needed to keep the AI revolution shining.
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Google said it had struck the first direct corporate power purchase agreement for fusion technology with Commonwealth Fusion Systems (CFS) – a spin-off from the Massachusetts Institute of Technology.
Atomic Crash
As any cab driver will tell you, fusion occurs when two atoms crash together to form a heavier atom. This is the same process that powers the sun and creates huge amounts of energy.
The deal is for 200 megawatts of power, about enough to power a small city, from CFS’s ARC project that is being developed in Virginia, home to the world’s biggest hub of energy-hungry data centers. Financial details of the deal were not disclosed.
One downside is that fusion technology is not yet commercial on Earth.
Achieving so-called “engineering break-even,” in which more energy comes out of a reaction than the overall energy that goes into a fusion plant to get a reaction going, has been elusive for scientists to date. And for a plant to generate power from fusion, the reactions must be constant, not rare.
Science Hurdles
CFS aims to generate power from the 400 MW project known as ARC in the early 2030s if it can clear those scientific hurdles.
“Yes, there are some serious physics and engineering challenges that we still have to work through to make it commercially viable and scalable,” Michael Terrell, Google’s head of advanced energy, told reporters in a call. “But that’s something that we want to be investing in now to realize that future.”
The huge amount of data processing behind AI requires a rapid increase in power supplies that are straining utilities and grids in many states.
Power demand from AI data centers could grow more than thirty-fold by 2035, according to a new report by consultancy Deloitte.
As such, tech firms are increasingly looking for new ways, including nuclear power, to keep their AI operations moving forward.
Is GOOGL a Good Stock to Buy Now?
On TipRanks, GOOGL has a Strong Buy consensus based on 30 Buy and 9 Hold ratings. Its highest price target is $250. GOOGL stock’s consensus price target is $200.06 implying a 12.70% upside.
