On Tuesday (October 6), Google and Constellation Energy, the largest U.S. nuclear operator, announced two long-term power agreements. Google will fund upgrades to 11 of Constellation's nuclear units in Illinois, Pennsylvania and New Jersey, adding 890 megawatts of capacity — roughly equivalent to building a large new reactor. A separate 15-year supply deal adds another 2,700 MW from Constellation's existing fleet. Together, the two agreements total about 3.6 gigawatts.
The centerpiece is a 20-year power purchase agreement. Constellation will "uprate" the reactors — extracting more output from already-running plants by upgrading turbines, steam generators and digital control systems — sidestepping the years of construction and grid-interconnection queues that a new plant would require. The Wall Street Journal called it the largest uprate project ever undertaken between a nuclear supplier and a technology company.
Constellation plans to invest more than $4.3 billion in the upgrades. The first new capacity is expected to reach the PJM grid in 2028 — PJM serves 13 states plus Washington, D.C., about 67 million people — with remaining unit upgrades running through 2032 and 2033. The work will sustain roughly 4,400 existing nuclear jobs and create about 7,200 construction jobs.
Constellation (CEG) surged on the news, gaining more than 14% intraday before closing up about 12%, pushing its market value back above $100 billion. The whole power and nuclear complex caught fire: Talen Energy rose about 12%, Vistra about 11%, NRG about 7%, small-modular-reactor names Oklo and NuScale about 7% and 4% respectively, and the VanEck uranium and nuclear ETF added 5.5%. Notably, CEG shares had fallen about 24% this year before the announcement.
The driver is straightforward: AI data centers need enormous amounts of electricity. Google is reportedly planning to spend up to $205 billion on data centers and computing in 2026. Constellation CEO Joe Dominguez said Google's willingness to step up with funding made the equivalent of a new reactor possible. Google's global energy head Amanda Peterson Corio said the deal would strengthen the PJM grid serving 67 million people while protecting energy affordability and supporting local union jobs.
The agreements also carry a five-year technology alliance: Constellation will adopt Google Cloud and Gemini Enterprise to build an "AI for energy" grid-operations offering. The tech giants' race for power is accelerating — Constellation signed a supply deal with Amazon for a Maryland plant last week, Microsoft has contracted to restart the Three Mile Island Unit 1 reactor (expected online in 2027), and on Monday Vistra secured a $4.2 billion low-interest loan from the U.S. Department of Energy for reactor upgrades. Bernstein analyst Sunaina Ocalan said the deal underscores the strategic value tech companies place on firm, clean, reliable power.
(Compiled from reporting by The Wall Street Journal, Barron's, MarketWatch, Morningstar, TechDefused and citybiz)