While 2025 was about the chips, 2026 is about the plug

⚠️ Not Financial Advice
These are the personal views and research of the Nomad Investor. Nothing published here constitutes financial advice. Always consult a licensed financial adviser before making investment decisions.

The global tech race is no longer just about processing power or data storage—it’s about energy. As artificial intelligence (AI) and cloud computing demand soar, the infrastructure supporting these innovations faces an existential bottleneck: electricity. With global data centre power demand projected to rise 17% in 2026, energy availability has become the single greatest constraint on tech growth. This shift has put the spotlight on innovative energy solutions, from small modular reactors (SMRs) to grid-scale storage, as the foundational layer of the new “Powering AI” ecosystem.

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For Australian investors, this matters deeply. Energy costs and reliability already rank high on ASX-listed tech firms’ risk disclosures, and the Reserve Bank of Australia (RBA) has noted energy price volatility as a growing macroeconomic concern. As power prices become a political flashpoint globally, companies that can bypass ageing public grids with on-site, carbon-neutral power solutions stand to gain not just stability but a significant competitive edge. The question is, how do you position your portfolio in this new era of energy-driven tech?

What’s Happening

The tech sector’s insatiable appetite for energy is starting to collide with the limits of ageing grid infrastructure. In the US alone, hyperscale data centres consumed around 90 terawatt-hours of electricity in 2025—more than the entire energy usage of Finland. Globally, energy demand from data centres is forecast to grow at an annual rate of 17%, driven largely by AI workloads, which are significantly more energy-intensive than traditional cloud operations.

Enter the “Nuclear Renaissance.” Small modular reactors (SMRs) have emerged as a frontrunner in addressing this challenge. Unlike traditional nuclear plants, SMRs are smaller, faster to deploy, and present fewer safety concerns. Private investment in SMR development surged 43% in 2025, with companies like Rolls-Royce and NuScale Power leading the charge. Meanwhile, grid-scale battery storage solutions are closing the gap in renewable energy intermittency, ensuring 24/7 availability for energy-intensive operations.

In Australia, energy challenges are particularly acute. The Australian Energy Market Operator (AEMO) has flagged potential power shortages by the late 2020s, exacerbated by coal plant closures and delays in renewable integration. For tech giants and data centre operators, the solution increasingly lies in bypassing the public grid altogether through private energy solutions, including on-site nuclear and hybrid renewable-battery systems.

The Data Behind the Story

The numbers paint a stark picture of why energy availability is becoming the Achilles’ heel of tech growth. Consider these key data points:

Metric	2025	2026 (Projected)
Global Data Centre Energy Demand	680 TWh	796 TWh
Private Investment in SMRs	$5.6 billion	$8.0 billion
Global AI Workload Energy Intensity (per transaction)	2.1 kWh	2.5 kWh

Stat Spotlight: By 2030, SMRs could generate 10% of global electricity, according to the International Atomic Energy Agency (IAEA).

For Australian investors, the numbers underscore an emerging trend: energy-intensive industries, particularly those tied to AI and cloud computing, will increasingly prioritise energy independence.

What This Means for Investors

The “Powering AI” ecosystem offers a multi-layered investment opportunity across both traditional and alternative asset classes. Infrastructure firms specialising in SMRs, grid-scale batteries, and renewable energy integration are likely to see growing demand. For equity investors, this means looking beyond the ASX 200 and into global players like NuScale Power or Fluence Energy, which are at the forefront of energy innovation.

Real asset investors should also take note. Infrastructure funds with exposure to energy transition projects, such as Brookfield Asset Management, are already seeing inflows tied to this trend. Additionally, private equity and venture capital are increasingly targeting early-stage SMR developers and energy storage technologies.

Opportunity Spotlight: Australian super funds, with their long-term investment horizons, are well-positioned to allocate capital to energy transition infrastructure, including SMRs and battery storage.

For retail investors, exchange-traded funds (ETFs) focusing on clean energy or nuclear technology, such as the Global X Uranium ETF, offer a practical entry point.

Key Risks to Watch

While the opportunities are compelling, they are not without risks. Investors should keep a close eye on the following:

Regulatory Hurdles: Nuclear technology, even in its smaller form, faces significant regulatory scrutiny, which could delay projects.
Cost Overruns: SMRs and grid-scale storage solutions are capital-intensive, and cost overruns could impact returns.
Energy Price Volatility: Falling renewable prices could undermine the economic case for nuclear solutions in certain markets.
Geopolitical Risks: Supply chains for critical materials like uranium remain exposed to geopolitical tensions.

Warning: The IEA has warned that delays in regulatory approvals for SMRs could push their commercial viability beyond 2030, affecting early investors.

Nomad Investor Takeaways

Energy availability is now the key constraint on tech growth; the “Powering AI” ecosystem is a high-growth opportunity.
Global data centre energy demand is projected to grow 17% in 2026; AI workloads are driving this surge.
Small modular reactors (SMRs) and grid-scale storage solutions are leading the Nuclear Renaissance.
Australian super funds and infrastructure investors are well-positioned to benefit from energy transition projects.
Watch for ETFs like Global X Uranium for diversified exposure to the nuclear energy theme.
Key risks include regulatory delays, cost overruns, and geopolitical supply chain issues.
Position portfolios early in companies and funds that are enabling on-site, carbon-neutral energy solutions for tech giants.