Microsoft is going nuclear. Nuclear power, that is.
In an unprecedented move that could be a game changer across the energy and technology sectors, Constellation Energy Corp. announced Friday it has signed a 20-year deal to supply Microsoft Corporation with nuclear power, reopening Three Mile Island, the site of the worst accident at a U.S. commercial nuclear power plant in American history.
Shares in Constellation (Nasdaq: CEG) were up over 16% in midday trading.
Microsoft and other tech giants have been struggling to meet the massive energy demands of artificial intelligence to power data centers, and have been increasingly looking at nuclear power as an alternative. The deal will give Microsoft a supply of carbon-free power around the clock for the next two decades.
“Powering industries critical to our nation’s global economic and technological competitiveness, including data centers, requires an abundance of energy that is carbon-free and reliable every hour of every day,” said Joe Dominguez, president and CEO of Constellation, in a statement. “Nuclear plants are the only energy sources that can consistently deliver on that promise.”
Constellation said it will invest $1.6 billion, which will pave the way for the launch of the new Crane Clean Energy Center, with Constellation’s Three Mile Island reactor expected to go online in 2028. That reactor sits next to the Unit 2 reactor, which partially melted down in 1979.
According to Constellation, reopening the Pennsylvania reactor will create 3,400 direct and indirect jobs, add more than 800 megawatts of carbon-free electricity to the grid, add $16 billion to the state’s GDP, and generate more than $3 billion in state and federal taxes. Backed by support from Pennsylvania Governor Josh Shapiro, it requires federal regulatory approval to reopen.