Google signs 20-year nuclear deal with Constellation Energy to power AI build-out

Google ( GOOG , GOOGL ) on Tuesday said it has inked a $4.3 billion deal with Constellation Energy ( CEG ) to bring 890 megawatts of nuclear energy online via a 20-year power purchasing agreement.

Constellation Energy stock climbed more than 12% on the news. Google parent Alphabet stock was flat.

The new capacity, the company said, will come from upgrades at six existing nuclear plants in Illinois, New Jersey, and Pennsylvania, and will include improvements such as modernized turbines, steam generators, and digital control systems.

The tech giant said the agreement provides Constellation with the revenue certainty needed to invest in updates to 11 of its reactors while ensuring customers don't incur additional costs stemming from the AI boom.

As part of the deal, Constellation will use Google's Gemini Enterprise software to help with site selection, outage management, and infrastructure protection.

In addition to the 890-megawatt nuclear plan, Google and Constellation, also agreed to a 15-year energy supply deal for another 2.7 gigawatts of power.

Google has invested in a number of other nuclear projects across the US, including in Georgia, Iowa, and Tennessee, the company said.

Big Tech has been leaning into nuclear energy to meet its power capacity needs amid the AI build-out.

Nuclear power provides clean energy compared with traditional carbon-based power options, though it still carries a significant stigma.

In January, Amazon signed a deal with Constellation for nuclear power, and Microsoft entered a 20-year agreement with the company in 2024, under which it will source energy from one of Constellation's previously shuttered reactors at Three Mile Island by 2028.

Meta ( META ) is also in on nuclear power, signing a 20-year deal to purchase power from Vistra's ( VST ) plants.

Firms are also investing in small modular reactors, compact power plants designed to provide megawatts of power, rather than upwards of 1 gigawatt. A gigawatt is enough energy to power nearly 800,000 homes.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X at @DanielHowley .