Data centers powering the large language models that drive artificial intelligence consume vast amounts of energy, creating significant challenges for tech giants to secure sufficient power for their operations. In response, Microsoft has embraced nuclear energy to meet its needs.
On Friday, Microsoft entered a landmark agreement with Constellation Energy, a nuclear plant operator, to source electricity for its data centers from the Three Mile Island Unit 1 nuclear facility.
This plant is situated next to the notorious TMI-Unit 2, which experienced a meltdown in 1979. Unit 1 was retired in 2019 as nuclear energy lost ground to cheaper alternatives like natural gas, solar, and wind energy. However, Constellation plans to invest $1.6 billion to restart Unit 1, pending regulatory approval, by 2028.
While the financial details of the deal were not disclosed, Microsoft has committed to purchasing all generated power from the reactor over the next two decades, as confirmed by a Constellation spokesperson. Once operational, the reactor is expected to generate 835 megawatts of capacity.
The facility will be renamed the Crane Clean Energy Center (CCEC) in honor of Constellation’s former CEO, Chris Crane, who passed away in April. Economic reports commissioned by the Pennsylvania Building & Construction Trades Council project that the new plant will create 3,400 direct and indirect jobs, contribute $16 billion to Pennsylvania’s economy, and generate over $3 billion in state and federal taxes.
“Providing power for industries essential to our nation's global economic and technological competitiveness—including data centers—demands a consistent supply of carbon-free and reliable energy. Nuclear plants uniquely fulfill that need,” stated Joe Dominguez, president and CEO of Constellation.
Microsoft has not yet responded to inquiries for further comments.
The trend toward nuclear energy isn't limited to Microsoft; other major tech companies are also exploring this option for their data centers. OpenAI’s CEO, Sam Altman, has advocated for nuclear power as a potential energy breakthrough, while Amazon recently acquired a nuclear-powered data center in Pennsylvania for $650 million.
Tech giants like Microsoft, Amazon, and Alphabet are striving to fuel their data centers entirely with green energy, with Microsoft aiming to achieve this by 2030. However, the company acknowledged in May that its expanding AI initiatives may challenge this goal.
In June, Bloomberg reported that the electricity consumption of forthcoming tech data centers could reach a staggering 508 terawatt-hours per year, surpassing Australia’s total annual electricity production.
The increasing demand for clean energy to support not only data centers but also electric vehicles, factories, and beyond has reignited interest in nuclear power. Investors are showing confidence in nuclear fusion startups, which have collectively raised $7.1 billion, as they represent a cleaner and more potent future for energy generation. Unlike traditional nuclear plants reliant on scarce elements like uranium and plutonium, fusion uses hydrogen as fuel, presenting a transformative solution for energy needs.
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