Google (GOOG, GOOGL) announced Tuesday that it has signed a $4.3 billion deal with Constellation Energy (CEG) to bring 890 megawatts of nuclear power online through a 20-year power purchase agreement.
Constellation Energy stock rose more than 12% following the news. Shares of Alphabet, Google’s parent company, were stable.
The new capacity, the company said, will come from upgrades to six existing nuclear power plants in Illinois, New Jersey and Pennsylvania, and will include improvements such as upgraded turbines, steam generators and digital control systems.
The tech giant said the deal gave Constellation the revenue certainty needed to invest in upgrading 11 of its reactors while ensuring customers would not incur additional costs linked to the AI boom.
As part of the agreement, Constellation will use Google’s Gemini Enterprise software to assist with site selection, outage management and infrastructure protection.
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At 2:57:36 p.m. EDT. Open market.
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In addition to the 890-megawatt nuclear project, Google and Constellation also entered into a 15-year power supply agreement for an additional 2.7 gigawatts of power.
Google has invested in a number of other nuclear projects in the United States, including in Georgia, Iowa and Tennessee, the company said.
Big tech has turned to nuclear power to meet its power capacity needs amid AI development.
Nuclear power provides clean energy compared to traditional carbon-based energy options, although it remains heavily stigmatized.
In January, Amazon signed a deal with Constellation for nuclear power, and Microsoft entered into a 20-year agreement with the company in 2024, under which it will source energy from one of Constellation’s previously closed reactors at Three Mile Island by 2028.
Meta (META) is also moving into nuclear power, signing a 20-year deal to buy electricity from Vistra (VST) plants.
Companies are also investing in small modular reactors, compact power plants designed to deliver megawatts of power, rather than more than 1 gigawatt. One gigawatt is enough energy to power nearly 800,000 homes.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on @DanielHowley.
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