Constellation Energy said that it is restarting Three Mile Island (TMI) Unit 1 and will sell about 835 megawatts of power to Microsoft for AI workloads.
In a release, Constellation Energy said that the deal with Microsoft is its largest power purchase agreement. TMI Unit 1 is adjacent to TMI Unit 2, which shutdown in 1979 and is being decommissioned. TMI Unit 1 is an independent facility and hasn't been impacted by Unit 2. Constellation Energy bought TMI Unit 1 in 1999.
Nuclear power has seen a resurgence in interest as the electricity grid strains under data center workloads due to generative AI. In addition, technology giants are trying to find a way to power AI workloads and hit carbon neutral goals. Simply put, hyperscale cloud nuclear deals may become more commonplace. In January, Amazon Web Services acquired a data center attached to Talen Energy's nuclear plant. Talen Energy will sell power to AWS.
Generative AI driving interest in nuclear power for data centers
In recent weeks, the drumbeat behind nuclear power as a solution for AI data center needs has picked up. Oracle CTO Larry Ellison talked up nuclear-powered data centers on the company's earnings conference call. Meanwhile, OpenAI CEO Sam Altman is chairman of Oklo, which is touting mini-nuclear reactors that can scale with data centers.
Constellation Energy has advocated for co-locating data centers at nuclear power plants as a way to build out infrastructure for AI quickly.
For Constellation Energy, the Microsoft deal is big. Five years ago, the power company shut down Three Mile Island Unit 1 due to poor economics. In a statement, Joe Dominguez, CEO of Constellation Energy, said "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, and nuclear plants are the only energy sources that can consistently deliver on that promise."
Earlier this week, Microsoft announced a partnership with BlackRock, Global Infrastructure Partners and MGX to invest in data centers and energy infrastructure to power AI.
Speaking on Constellation Energy's second quarter earnings call last month, Dominguez said:
"We're continuing to do well in our discussions and negotiations with data center companies. The simple fact is that data centers are coming and they're essential to America's national security and economic competitiveness. And it's absolutely critical that the U.S. not fall behind it. Time is of the essence. We simply cannot wait years for the data centers that are going to bring transformations."
Dominguez added that sustainability is also playing a role in nuclear and renewable energy demand:
"We're seeing more evidence of our customers, not just data center customers, but customers as a whole, evolving in their sustainability journeys from buying annual clean energy products to starting to match their hourly consumption with clean energy."
Bottom line: Nuclear power is likely to play a big role in the AI factory buildout.
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