Alibaba has held preliminary discussions with a Chinese state-owned nuclear power enterprise about building a small modular reactor (SMR) to help power its data centers, according to an industry source cited by China Business Journal. The talks center on Alibaba's Renhe Data Center in Hangzhou, Zhejiang Province — the company's flagship cloud computing facility — which is experiencing rapidly growing electricity demand driven by AI workloads.
The Hangzhou Renhe facility is no ordinary data center. It serves as computing infrastructure for AI companies including BrainCo Technology and Lingban Technology, and when it opened in September 2020 it was the world's largest fully immersive liquid-cooled data center — and China's first to achieve a 5A green certification rating.
Despite the exploratory talks, the negotiations face a fundamental structural challenge: China's power grid architecture and centralized pricing mechanisms make it difficult to directly connect an SMR to a single private facility, a hurdle that has not yet been resolved. The nuclear enterprise involved nonetheless views data centers as one of the most promising future customer segments for SMR technology, alongside coastal industrial parks and other high-energy-consumption operations.
Alibaba's interest in nuclear energy runs deeper than a single conversation. In January 2026, China National Nuclear (Xiangshan) Nuclear Energy Co. was registered with a capital base of 250 million yuan, with Shanghai Yiqi Network Technology — a wholly-owned subsidiary of Alibaba Cloud — listed as a shareholder, signaling a formal strategic stake in the nuclear sector. Separately, in April, Alibaba increased its investment in Nova Fusion, a startup focused on small modular field-reversed configuration (FRC-SMR) fusion technology, as part of the company's 700 million yuan Series Angel round. Nova Fusion aims to achieve its first plasma discharge by end of 2026 and deliver a commercial demonstration plant in the 2030s.
The broader context is global. Companies including Meta and Microsoft have already signed agreements with nuclear power providers to secure continuous, low-carbon electricity for data centers. Within China, government policy has leaned more heavily toward large-scale solar and wind deployment to meet AI computing demand, making Alibaba's nuclear-linked moves a potential supplement rather than a departure from the country's prevailing energy strategy.
China's domestic SMR program is advancing quickly: the Linglong One (ACP100), the world's first commercial land-based small modular reactor, began commercial operation on Hainan Island in early 2026 — a milestone that positions China's nuclear industry well ahead of Western peers in commercial SMR deployment.
#Alibaba #SMR #NuclearEnergy #DataCenter #AIInfrastructure #ChinaTech #SmallModularReactor #CloudComputing #EnergyTransition #AlibabaCloud #AIDataCenter #ChinaAI #CleanEnergy