U.S. titans tighten supply chain grip
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Illustration: Aïda Amer/Axios
Two of the biggest industries in the world are taking the supply of key resources into their own hands.
Why it matters: Controlling inputs gives businesses more control over costs and outputs.
Driving the news: Amazon on Wednesday became the third Big Tech giant in recent weeks to announce ambitions to tap nuclear energy to power surging AI demand.
- The company said that it's signed three new agreements to help develop nuclear energy projects: building at least four small modular nuclear reactors (SMR) in Washington state; exploring an SMR project in Virginia; and investing in fuel startup X-energy.
- Separately, auto giant GM said today it's investing $625 million more in cash and credit into Canadian mining company Lithium Americas to help start a new joint venture in Nevada.
Zoom out: GM's not alone in its strategy to secure lithium supplies, a key component in EV batteries, but it's gone further than rivals like Ford Motor, Stellantis and BMW, which have inked more traditional supply agreements with miners.
- Its deal announced Wednesday will give the automaker a 38% asset-level ownership stake in Thacker Pass, a lithium mine in Nevada.
With Amazon, today's news came on the heels of Google's announced deal to buy energy from SMRs that startup Kairos Power plans to bring online by 2030.
- And Microsoft and Constellation Energy last month announced a power purchase deal enabling a restart of a nuclear reactor at Pennsylvania's Three Mile Island.
The bottom line: Both deals in the news today have been expressed as "new" or "next" phases for companies in either industry.
- For Amazon, that means taking direct stakes in next-generation nuclear companies, Tyler Norris of Duke University told Axios' Andrew Freedman.
- For GM, it's a strategy that's gone full circle, back to when Ford secured tire materials 100 years ago by setting up rubber plantations in Brazil, GM's Sham Kunjur told the NYT last year.
