CyrusOne’s Nuclear Pivot: Analyzing the 2025 SMR Strategy for AI Data Centers
Industry Adoption: CyrusOne’s Calculated Shift from SMR Observer to Pioneer
Between 2021 and 2024, CyrusOne’s approach to Small Modular Reactors (SMRs) was primarily one of strategic observation and market education. The company publicly acknowledged the potential of nuclear energy to solve the data center industry’s looming power crisis, publishing thought leadership pieces to dispel myths around safety and waste. Its key move was a 2023 joint venture with Kansai Electric Power Company (KEPCO), a major Japanese nuclear operator. This partnership was less about immediate deployment and more about gaining invaluable operational expertise, positioning CyrusOne as a knowledgeable, albeit cautious, “fast follower.” During this period, the company’s public statements expressed skepticism about the near-term viability of on-site SMRs, indicating it was laying the groundwork rather than breaking ground on nuclear projects.
The year 2025 marked a significant inflection point, shifting the company’s posture from exploratory to preparatory. While CyrusOne has still not announced a direct SMR partnership, its commercial activities have created the ideal physical and financial conditions for one. The company’s joint venture with power producer Calpine to develop a massive data center campus in Bosque County, Texas—backed by a 400 MW power agreement—is the clearest signal. This strategy of co-locating immense power demand directly with generation assets creates a perfect testbed for a future SMR. Similar deals, like the partnership with E.ON in Germany for on-site power and the off-grid AI data center project with Ameresco and the U.S. Navy, reinforce this pattern. The variety of these deals, spanning traditional power producers, European utilities, and government entities, shows CyrusOne is building a flexible, global ecosystem to support next-generation, baseload power, with SMRs being the ultimate prize. The threat is no longer theoretical; the exponential power demand from AI has made it existential, forcing a move from education to execution.
Table: CyrusOne’s Key Investments Driving its SMR-Ready Strategy
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Consideration of Debt Sale | Dec 9, 2025 | Mulling a €600 million ($697 million) debt sale to fund European data center expansion, indicating continued capital-raising to support power-hungry projects in markets like Frankfurt. | Bloomberg |
| Joint Venture with ECP and KKR | Jul 30, 2025 | A multi-phase hyperscale data center campus in Bosque County, Texas, with a potential investment approaching $4 billion. This massive, power-intensive site is a prime candidate for future SMR integration. | Energy Capital Partners (ECP) |
| New London Data Center Campus | Jun 13, 2025 | Planned investment of over £1.2 billion ($1.6 billion) for a new sustainable campus in Buckinghamshire, UK, highlighting large-scale capital deployment for next-gen data centers. | CyrusOne |
| Debt Capital Secured | Jan 30, 2025 | Secured $9.7 billion in new debt capital specifically to fund global data center growth, providing a massive capital pool for energy and AI infrastructure projects. | CyrusOne |
| Joint Venture Investment Target with KEPCO | Jan 29, 2025 | Announced a target to invest ¥1 trillion (approx. $6.8 billion) over 10 years in the Japanese data center market through its joint venture with the nuclear operator KEPCO. | CyrusOne |
| New Aurora Data Center Campus | Apr 23, 2025 / Oct 2, 2024 | Broke ground on a $350 million data center in Aurora, Illinois, part of a broader state investment expected to exceed $1 billion, showcasing continued expansion of power-intensive facilities. | Aurora Buzz |
| Frankfurt FRA7 Data Center | Jul 19, 2024 | Broke ground on a new Frankfurt campus representing an ultimate investment of over €1 billion. The project focuses on sustainability, a key driver for exploring carbon-free SMRs. | CyrusOne |
| ABS Issuance | May 15, 2024 | Closed a $1.175 billion asset-backed securities issuance, part of a larger $2.6 billion program, demonstrating sophisticated financing to fund capital-intensive growth. | CyrusOne |
| Acquisition by KKR and GIP | Mar 25, 2022 | Acquired for $15 billion by KKR and Global Infrastructure Partners, providing the immense financial backing necessary to pursue long-term, high-CAPEX energy solutions like SMRs. | Global Infrastructure Partners |
Table: CyrusOne’s Strategic Partnerships Paving the Way for SMRs
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Calpine Corporation (Phase 2) | Nov 4, 2025 | Completed a 400 MW power supply deal for its Texas campus by adding 210 MW. This co-locates a massive data center with a power generation site, an ideal model for future SMR deployment. | PR Newswire |
| Ameresco and U.S. Navy | Sep 9, 2025 | Partnered to build a 100 MW off-grid, AI-optimized data center. This project emphasizes energy resilience and grid independence, which are core attributes of SMRs. | Ameresco |
| Calpine, KKR, Energy Capital Partners | Jul 30, 2025 | Announced the initial JV and 190 MW power agreement in Bosque County, Texas. This establishes the foundational real estate and energy ecosystem for a potential SMR. | CyrusOne |
| E.ON | Jun 2, 2025 | Formed a “Preferred Partnership” to develop on-site power solutions in Europe, starting with a 61 MW system in Frankfurt. This signals a strategic move away from sole grid reliance. | CyrusOne |
| Kansai Electric Power Company (KEPCO) | May 22, 2023 | Formed a joint venture to build a 900 MW portfolio in Japan. This partnership provides CyrusOne direct access to KEPCO’s deep expertise as a major nuclear power operator. | CyrusOne |
Geography: CyrusOne’s SMR Focus Sharpens on the U.S.
Between 2021 and 2024, CyrusOne’s SMR-related interests were geographically dispersed. The strategic joint venture with KEPCO established a foothold in Japan, an energy-constrained market where nuclear expertise is paramount. Simultaneously, the hiring of a public policy director for Europe signaled an intent to engage with the regulatory landscape there. While the U.S. remained its core market for data center expansion, specific sites for next-generation power solutions were not yet identified publicly.
In 2025, the geographic focus has dramatically sharpened on the United States, and specifically Texas. The partnership with Calpine to develop a massive, 400 MW campus in Bosque County is the single most important geographical development. This move positions a specific, large-scale site with direct access to power generation in a state with a favorable regulatory environment for energy projects. It is the most logical candidate in CyrusOne’s portfolio for a first SMR deployment. While other strategic projects in California (with Ameresco) and Germany (with E.ON) show the company is applying its on-site power strategy globally, the scale and nature of the Texas project make it the clear epicenter of CyrusOne’s SMR ambitions. The risk is now concentrated; success or failure in pioneering this model in Texas will likely dictate its global rollout.
Technology Maturity: CyrusOne Builds the Business Case for SMRs
From 2021 to 2024, CyrusOne viewed SMRs as a promising but pre-commercial technology. The company’s focus was on enabling technologies that created the *need* for SMR-level power. The 2023 launch of its Intelliscale™ platform, designed for AI workloads with power densities up to 300kW per rack, was a crucial step. By commercializing data center designs that existing grid infrastructure cannot easily support, CyrusOne was effectively building the demand side of the equation for SMRs. The technology itself remained in the hands of developers, and CyrusOne’s role was to prepare the market and its own infrastructure for its eventual arrival.
The period from 2025 to today reflects a market where SMR technology is maturing, with NuScale Power’s design receiving U.S. regulatory approval and other developers like GE Hitachi making significant progress. CyrusOne’s strategy has matured in lockstep. It has moved from building the *demand* for SMRs to building the *physical platform* for their deployment. The 400 MW Calpine deal in Texas is not a pilot; it is a commercial, large-scale project that creates a “plug-and-play” environment for a future SMR. The technology being validated here is not the reactor itself, but the business model of co-locating hyperscale data centers with dedicated, baseload power generation. By launching its standardized Intelliscale™ solution in January 2025, CyrusOne confirmed it is now selling the high-density capacity that makes this new power model a commercial necessity, not just a future concept.
Table: CyrusOne’s Evolving SMR Strategy – SWOT Analysis
| SWOT Category | 2021 – 2024 | 2025 – Today | What Changed / Resolved / Validated |
|---|---|---|---|
| Strengths | Strong financial backing from KKR and GIP post-$15B acquisition. Strategic JV with nuclear operator KEPCO provides access to operational knowledge. | Massive demonstrated financial firepower with ~$12B raised in 2025. Acquisition of tangible, large-scale land and power assets via the Calpine partnership (400 MW in Texas). | The company’s strength evolved from potential (financial backing, knowledge partner) to kinetic (deployed capital, physical SMR-ready sites). |
| Weaknesses | “Fast follower” strategy with no direct SMR partnerships announced, risking being outpaced by competitors like Standard Power who partnered with NuScale. Limited in-house nuclear deployment experience. | Continued absence of a direct SMR developer partnership. The strategy relies on traditional energy partners (Calpine, E.ON) as a bridge, which could delay a full commitment to nuclear. | The weakness shifted from a lack of action to the inherent risk of its chosen path. The bridge strategy is safer but slower, while competitors pursue direct SMR deals. |
| Opportunities | Leverage the KEPCO partnership for deep nuclear expertise. Engage in policy advocacy (via Emma Fryer) to shape favorable regulations for SMRs in key markets like Europe. | Secure a first-mover advantage by deploying an SMR at the $4B Bosque County campus. Set the definitive industry standard for a fully integrated, nuclear-powered data center. | The opportunity has become site-specific and tangible, moving from theoretical (policy influence) to practical (deploying a reactor at the Thad Hill site). |
| Threats | General industry challenges: slow regulatory processes for nuclear, negative public perception, and high, uncertain costs of first-of-a-kind SMR projects. | Threats have become existential: AI is creating an insatiable power demand straining grids to the breaking point. Competitors like Amazon and Google are signing their own nuclear offtake agreements. | The primary threat transformed from long-term industry hurdles to an immediate, existential business risk (power scarcity) and intense competitive pressure. |
Forward-Looking Insights and Summary
CyrusOne’s actions in 2025 signal a definitive pivot from a “watch and learn” to a “prepare and pounce” strategy regarding SMRs. The company has methodically assembled the three key ingredients for a nuclear-powered data center: extreme power demand (driven by its Intelliscale™ AI platform), immense financial capacity (nearly $12 billion raised), and a suitable physical location (the 400 MW Bosque County campus). The strategy of partnering with traditional energy producers like Calpine is a de-risked, pragmatic bridge to the nuclear future, allowing CyrusOne to build the necessary infrastructure while the SMR market fully matures.
For energy executives and investors, the year ahead is critical. The most significant signal to watch for is the announcement of a formal Memorandum of Understanding (MoU) or joint development agreement between CyrusOne and a leading SMR developer such as NuScale Power, GE Hitachi, or Rolls-Royce SMR. The Bosque County site is the logical venue for such a project. Other key indicators will be found in financial disclosures; any specific capital allocation toward “next-generation energy infrastructure” will be a clear sign that the company is moving from preparation to direct investment. Finally, look for the announcement of an explicitly “SMR-ready” data center design, which would formalize the technical and security requirements for hosting a reactor. CyrusOne has laid all the groundwork; the next move will likely be the one that takes the industry from talking about nuclear-powered data centers to actually building one.
Frequently Asked Questions
Why is CyrusOne considering nuclear power for its data centers?
CyrusOne is pursuing nuclear power, specifically Small Modular Reactors (SMRs), to solve the data center industry’s “looming power crisis.” The exponential and insatiable power demand driven by AI has made finding a reliable, carbon-free, baseload power source an existential issue, forcing the company to move from theory to execution.
Has CyrusOne actually started building a nuclear-powered data center?
No. While the company’s 2025 strategy is to prepare for SMRs, it has not yet announced a direct partnership with an SMR developer or started building a nuclear facility. Instead, it is creating the “ideal physical and financial conditions” for one, such as co-locating large data centers with power generation partners.
What is the most significant project indicating CyrusOne’s move towards an SMR strategy?
The clearest signal of CyrusOne’s strategy is its joint venture with Calpine to develop a massive data center campus in Bosque County, Texas. With a 400 MW power agreement, this project co-locates immense power demand directly with a generation site, creating a “perfect testbed” and the most logical candidate for a future SMR deployment.
How did CyrusOne’s approach to SMRs change in 2025?
In 2025, CyrusOne’s posture shifted from being a cautious “fast follower” to actively preparing for SMR deployment. Between 2021 and 2024, the company focused on market education and gaining knowledge. In 2025, it began executing a strategy to build the physical platforms, like the Texas campus, and secure the massive capital needed to make a nuclear-powered data center a commercial reality.
Who are CyrusOne’s key partners in its energy strategy?
CyrusOne has several key energy partners. Its 2023 joint venture with Kansai Electric Power Company (KEPCO), a major nuclear operator, provides access to deep operational expertise. Its 2025 partnership with power producer Calpine is crucial for developing the SMR-ready site in Texas. Other partners include E.ON in Europe and Ameresco for an off-grid U.S. Navy project.
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