What Is a Small Modular Reactor?
A small modular reactor (SMR) is a smaller-scale nuclear reactor designed to be factory-built and modular, with the goal of easier deployment, scalable capacity, and potentially more flexible power generation than traditional large reactors.
Small modular reactors have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors. To put that in perspective, the generating capacity of a large-scale nuclear design typically ranges between 550 megawatts (MW) and 1,500 MW per unit.
The word "modular" is key to understanding what makes SMRs different. It refers to the scalability of the design and the ability to fabricate major components in a factory environment and then transport them to the site. Prefabricated units of SMRs can be manufactured, shipped, and installed on site, making them potentially more affordable to build than large power reactors, which are often custom designed for a particular location. SMRs can also be deployed incrementally to match increasing energy demand.
How Does a Small Modular Reactor Work?
Like all nuclear reactors, SMRs generate electricity through nuclear fission — the process of splitting atoms to release heat — which is then used to produce steam and drive a turbine. What distinguishes SMRs from traditional large-scale plants is primarily their size, construction approach, and deployment flexibility.
Across the range of SMRs in development, new technical features coupled with smaller scale offer potential benefits, particularly in certain deployment scenarios. Some SMRs are also designed to be deployed in modules, allowing capacity to be scaled over time to match demand.
Why Are Small Modular Reactors Relevant to Data Centers and AI Factories?
The Energy Challenge Facing Data Centers
AI is reshaping how data centers are designed and operated, driving demand for cooling strategies that can adapt to higher densities, dynamic workloads, and continued growth. That growth is placing significant pressure on energy infrastructure.
The global electricity demand of data centers — the critical infrastructure for training and running AI models — grew by 17% in 2025. Data center electricity consumption is set to more than double to around 945 TWh by 2030, which is slightly more than Japan's total electricity consumption today. AI is the most important driver of this growth, alongside growing demand for other digital services.
Why SMRs Are Being Considered as Part of the Solution
Because of their size and design, small modular reactors offer several advantages over both traditional energy sources and large-scale nuclear plants. Compared with natural gas, SMRs do not depend on volatile fuel markets, and unlike wind and solar, they can produce around-the-clock, carbon-free power that is not affected by weather or time of day.
SMRs can provide 24/7 electricity and potentially be co-located with heavy energy users like data centers or industrial facilities.
Major tech companies are actively looking to advanced nuclear technologies such as small modular reactors to provide clean, reliable, and flexible power, as the electricity consumption of data centers, AI, and cryptocurrencies is set to grow in the coming years.
One potential drawback to the use of SMRs is their dependency on an abundance of water for the fission process, steam, and cooling. Some newer designs are engineered to be less water dependent, but in dryer climates especially, water availability could be a limitation.
Scalability and Flexibility
One of the characteristics that makes SMRs particularly relevant to data center operators is their modular, scalable design. Rather than sizing a single reactor to match expected demand, an operator can add modules incrementally, aligning with how modern data centers and AI factories are built in phases.
Unlike traditional large-scale plants, SMRs are designed to be manufactured in a factory setting and transported to the site for installation. This modularity aims to reduce capital risk, shorten deployment timelines, and lower the barrier to entry for smaller or private enterprises.
Important Considerations
SMRs represent an emerging technology, and their role in the energy mix is still developing. The critical challenge is now execution. Cost discipline, supply chain development, regulatory efficiency without compromising safety standards, fuel availability, and waste management frameworks must all be addressed concurrently. Data center operators and energy planners evaluating SMRs should account for these factors alongside the potential benefits.
What Does This Mean for Thermal Management?
Whether a data center or AI factory is powered by the grid, renewables, or emerging sources like SMRs, the thermal management challenge remains the same: an AI cooling system must maintain server and chip temperatures within their operating range, ensure the entire facility has sufficient pressurization, humidity control, and cooling, and address the unprecedented thermal demands created by high-density computing equipment, particularly GPUs and AI accelerators that generate significantly more heat than traditional IT equipment. If those temperatures are not maintained, the risks escalate quickly — from throttled performance and reduced compute output to unplanned downtime, equipment stress, shortened asset life, and potential failure of critical systems, all of which can disrupt operations, increase costs, and jeopardize service reliability.
If those temperatures are not maintained, the risks escalate quickly — from throttled performance and reduced compute output to unplanned downtime, equipment stress, shortened asset life, and potential failure of critical systems, all of which can disrupt operations, increase costs, and jeopardize service reliability.
Trane delivers end-to-end thermal management for hyperscale and colocation data centers, solving the toughest challenges in AI workload cooling and energy optimization. AI workloads are raising density, changing load profiles, and pushing cooling systems to do more. Stronger performance starts before equipment is selected, when the full thermal management strategy is designed around the way the site needs to operate. That's why Trane starts with collaboration, working alongside your team to understand your goals, your site's thermal requirements, your sustainability targets, and where you need room to grow.
Trane's thermal management system reference design delivers mission-critical temperature control, enabling data center operators to simultaneously manage power, water, and land resources, allowing for continuously optimized performance, energy efficiency, and sustainability.
Trane's enhanced reference design frees up 22 megawatts of cooling capacity that can be redirected to IT power, helping boost compute output without increasing total energy consumption.
