Amazon Invests in Nuclear Power to Feed Growing Data Centers

Amazon has taken a major step toward securing its energy future by signing an agreement to fund a new nuclear power plant in Indiana. The company is working with X-energy and American Electric Power (AEP) to build the facility at the site of the former Breed Generating Station in Sullivan County. According to The Verge, the project aims to provide up to 960 megawatts of carbon-free energy. This power will be shared between the regional electricity grid and Amazon’s own data centers, which require massive amounts of energy to run artificial intelligence services.

The proposed plant plans to use 12 Xe-100 small modular reactors, or SMRs. These are a type of advanced reactor that is still undergoing testing and licensing. A key feature of this technology is its cooling system, which can use air, water, or a mix of both. Amazon noted that this flexibility should allow the reactors to operate in areas where water is limited without putting extra pressure on local water supplies. While the company says the project could create 1,000 construction jobs and 100 permanent positions, no specific timeline for construction or operation has been announced yet.

This Indiana project is not Amazon’s first move into nuclear energy. It is the second collaboration between Amazon and X-energy, following the announcement of the Cascade Advanced Energy Facility in Washington last year. Together, the companies have a goal of deploying more than 5 gigawatts of new nuclear capacity in the United States by 2039. Amazon is part of a larger group of tech giants, including Meta, Microsoft, and Google, that are all exploring nuclear options to meet the high energy demands of their data centers. The company recently shared a blog post outlining its plans to invest in energy infrastructure, hoping to address growing public concerns about the environmental impact of these large-scale data centers.

However, the path to building nuclear plants in the region has not always been smooth. Indiana is also home to the Marble Hill Nuclear Power Plant, a project that was abandoned in 1983 after billions of dollars were spent on it. While the new agreement in Fairbanks is a different project, it highlights the long-term challenges of large energy infrastructure. Furthermore, it will be many years before Amazon and the regional grid can actually receive power from these new facilities.

This development comes at a time when the broader U.S. energy landscape is changing rapidly. A recent report by the Environmental Defense Fund and Atlas Public Policy, cited by The Verge, indicates that electricity demand is growing faster than it has in over a decade. This is due to the expansion of data centers, new factories, and the rise of electric vehicles. While renewable energy sources like wind and solar have grown significantly, the report notes that the current U.S. administration is pushing for more fossil fuel infrastructure. Plans for new gas-fired power plants have increased significantly, rising from 5 percent of all new capacity in 2024 to 30 percent by the second quarter of 2026.

The report warns that if current trends continue, fossil fuels could make up a much larger portion of the development pipeline by the end of the decade. This shift is happening even though renewable energy projects often have lower costs. According to the report, utility-scale solar and wind farms still cost less per megawatt-hour than new natural gas plants. Despite this, some renewable projects are being canceled at a higher rate than fossil fuel projects. The authors of the report suggest that the U.S. power sector is at a critical turning point, where decisions made today will affect energy costs, reliability, and pollution levels for many years to come.

For now, the focus remains on how these different energy sources will compete to meet the nation's rising needs. While tech companies like Amazon are betting on advanced nuclear technology to provide a clean and steady supply of power, the overall market is still heavily influenced by the availability and cost of traditional fossil fuels. Whether these nuclear projects can be completed on time and within budget remains an open question, but they represent a significant shift in how big technology firms are planning their long-term energy strategies.