Tech Giants Rush to Secure Nuclear Power for Data Center Operations

Google signed a major 20-year power purchase agreement with Constellation Energy for approximately 3.6 gigawatts of nuclear capacity, following Amazon's comparable deal announced the previous week. The dual commitments signal a significant shift toward long-term nuclear contracts as artificial intelligence-driven data centers demand massive amounts of reliable, constant electricity that existing grid infrastructure cannot reliably provide. Constellation's stock surged 13% on the news, suggesting investors view the company's transition into a long-term contract business model as undervalued relative to its growing strategic importance to Big Tech.

Google's agreement encompasses both newly enhanced reactor capacity and access to existing power plants across multiple states. The nuclear upgrades—involving equipment modifications at facilities in Illinois, Pennsylvania, and New Jersey—represent a phased implementation beginning in 2028. This follows a comparable arrangement Amazon announced with Constellation days earlier, demonstrating sustained demand from hyperscale technology companies for dedicated power supplies to support data center expansion.

Constellation's business model is undergoing fundamental transformation through these long-term contracts, shifting from spot-market power sales toward predictable revenue streams resembling utility operations. The agreements enable the company to justify substantial capital investment in nuclear capacity upgrades. Grid operators like PJM have proposed requiring major data center developers to secure independent power sources, creating structural incentives for such arrangements and potentially justifying premium pricing despite long contract durations.