Amazon Secures 1,920 MW Nuclear Power Deal With Talen Energy For AI Data Centers

Amazon has recently secured a significant deal with Talen Energy to power its AI data centers and Amazon Web Services infrastructure. The agreement involves the procurement of 1,920 megawatts of nuclear energy from Talen Energy's Susquehanna nuclear facility, with the contract extending until 2042 and an option for further extension. This long-term power purchase agreement (PPA) is designed to meet the escalating power demands of AI-based data centers, which require substantially more energy than traditional data facilities.

The PPA amends an existing 300-MW delivery agreement, transitioning to a "front of the meter" (FTM) model. This approach allows AWS to purchase energy from the larger power grid rather than a single source, thereby avoiding regulatory hurdles that had previously slowed down the agreement. The FTM model is advantageous as it does not require approval from the Federal Energy Regulatory Commission, streamlining the process. Talen Energy is expected to earn $18 billion in revenue over the initial 17-year period of the contract.

The partnership between AWS and Talen Energy extends beyond this agreement, as they plan to explore options for building small modular reactors to provide additional nuclear power sources. Furthermore, they will work on increasing the output of Talen’s current Susquehanna plant through engineering, software, and hardware upgrades, a process known as uprating. The nuclear energy from the existing Talen plant will gradually reach full capacity, with AWS contracted to receive between 840 to 1,200 MW by 2029 and 1,680 to 1,920 MW by 2032.

Amazon's investment in Pennsylvania is substantial, with plans to spend $20 billion on constructing data facilities in the region. This investment is expected to bring 1,250 high-skilled jobs and significant economic benefits to the state. Kevin Miller, AWS Vice President of Global Data Centers, emphasized Amazon's commitment to advancing AI innovation in Pennsylvania, stating that this agreement will help power their infrastructure with carbon-free energy.

This deal is part of a broader trend among leading cloud and AI companies, which are increasingly turning to nuclear energy to meet the high power demands of their data centers. The voracious energy consumption of AI computing necessitates more sustainable and reliable power sources. Other notable deals include Meta's 20-year contract with Constellation Energy to receive 1,100 MW of electricity from a nuclear plant in Clinton, Illinois, and Microsoft's 20-year contract with Constellation to receive the complete energy output of the Three Mile Island nuclear plant, which is set to reopen in 2024. These agreements underscore the growing reliance on nuclear energy to support the expanding needs of AI and cloud computing infrastructure.

The move reflects the growing need for high-energy output infrastructure to power artificial intelligence and high-performance computing data centers as AI development becomes a key priority for global leaders. The shift toward nuclear energy generation has received support from several US lawmakers and political leaders, who urge innovation on the AI front to avoid falling behind international competitors. The energy will be supplied through the grid rather than directly from the nuclear plant as initially planned. This arrangement will help support the energy grid's maintenance through service fees paid by Amazon.