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.

As we move into 2026, the global tech industry is facing a new bottleneck—and it’s not silicon or software. It’s power. With data centre power demand expected to surge by 17% this year, energy availability has become the defining constraint on tech growth. This is especially critical as artificial intelligence, cloud computing, and metaverse applications push the limits of traditional grids. For investors, the opportunity lies in the emerging “Powering AI” ecosystem: companies providing on-site, carbon-neutral energy solutions for tech giants. This year’s nuclear renaissance and the rise of small modular reactors (SMRs) could be transformative.

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Power prices are already a political flashpoint, with blackouts and skyrocketing costs making headlines globally. Meanwhile, tech firms are increasingly bypassing strained public grids, opting instead for private energy solutions. From nuclear microreactors to grid-scale battery storage, these innovations are poised to redefine how we power the digital economy. The question is, how can investors position themselves to capitalise on this shift?

What’s Happening

In recent years, the energy landscape has shifted dramatically. While the drive for renewable energy has dominated headlines, the limitations of wind and solar—intermittency, storage challenges, and grid dependency—are becoming more apparent. Energy consumption by data centres alone now accounts for an estimated 3% of global electricity use, a figure that could rise to 5% by 2030 if current trends continue.

Enter the nuclear renaissance. Governments and private investors alike are pouring capital into next-generation nuclear technologies, particularly small modular reactors (SMRs). Unlike traditional nuclear plants, SMRs are compact, safer, and scalable. They can be deployed on-site at data centres, providing a steady and carbon-neutral energy supply. The International Energy Agency (IEA) projects that nuclear power capacity could grow by 15% globally by 2030, driven in part by SMRs.

At the same time, grid-scale energy storage is seeing unprecedented investment. According to BloombergNEF, global battery storage capacity is set to triple by 2027, enabling more efficient integration of renewables and reducing reliance on traditional grids. These developments are not just about cleaner energy—they’re about ensuring energy availability in an increasingly electrified world.

The Data Behind the Story

To understand the scale of this shift, consider the following:

Metric	2026 Projection
Global data centre power demand growth	+17%
Projected increase in nuclear power capacity by 2030	+15%
Global battery storage capacity by 2027	3x current levels

Data centre energy consumption could account for 5% of global electricity use by 2030, up from 3% today.

In Australia, the stakes are particularly high. The nation’s ageing energy infrastructure has struggled to keep pace with demand, and power prices have been volatile. ASX-listed companies like AGL Energy and Origin Energy are under pressure to modernise their operations, while smaller players in the renewable and storage sectors are seeing increased investor interest.

What This Means for Investors

The “Powering AI” ecosystem offers a multi-layered investment opportunity. At its core are infrastructure firms developing SMRs and advanced battery systems. Companies like Nuscale Power and TerraPower are leading the charge in the nuclear space, while Tesla and Fluence dominate grid-scale storage.

Real assets, such as energy-focused infrastructure funds, are another avenue for exposure. These funds often provide stable, inflation-hedged returns—an attractive prospect in today’s unpredictable markets. Additionally, venture capital is flowing into startups tackling energy challenges, from hydrogen storage to AI-driven grid optimisation.

Opportunity: Small modular reactors (SMRs) could address both energy availability and carbon neutrality, key priorities for tech giants.

For Australian investors, the ASX offers indirect exposure through companies like Worley, which provides engineering solutions for energy projects, and Mineral Resources, which is expanding into lithium and battery materials. Additionally, superannuation funds are increasingly allocating to renewable and energy infrastructure projects, aligning with ESG mandates.

Key Risks to Watch

As with any transformative trend, the “Powering AI” ecosystem comes with risks:

Regulatory hurdles: Nuclear energy, despite its advancements, still faces significant regulatory and public perception challenges.
Technological uncertainty: Many SMR and battery storage projects are in early stages, and timelines for commercialisation are uncertain.
Geopolitical tensions: The energy sector is highly sensitive to geopolitical risks, from resource nationalism to trade restrictions.
Market saturation: Rapid investment in renewables and storage could lead to oversupply, pressuring returns.

Warning: Regulatory delays and community opposition could slow the rollout of small modular reactors, impacting near-term returns.

Nomad Investor Takeaways

Energy availability is the new growth constraint for tech, making power infrastructure a critical investment theme.
Small modular reactors (SMRs) and grid-scale storage are leading the charge in the “Powering AI” ecosystem.
Australian investors can gain exposure through ASX-listed companies like Worley and Mineral Resources, or via superannuation funds.
Regulatory hurdles and technological uncertainty are key risks to monitor in nuclear and storage sectors.
Global battery storage capacity is set to triple by 2027, presenting opportunities in lithium and related materials.
Real assets and infrastructure funds offer a way to hedge against inflation while gaining exposure to energy innovation.
Keep an eye on geopolitical tensions and market saturation risks that could impact long-term returns.