Microsoft taps Constellation Energy to restart Three Mile Island for data centre energy

In a sensational move that marks the latest intersection of technology and energy, Constellation Energy has struck a deal with Microsoft to restart Pennsylvania’s dormant Three Mile Island nuclear plant. The deal aims to meet the skyrocketing energy needs of artificial intelligence (AI) systems powering Microsoft’s data centres. This $1.6 billion project will revive Unit 1 of the Three Mile Island facility, which was closed in 2019, aiming to bring it back online by 2028.

The agreement ensures Microsoft secures a 20-year supply of 835 megawatts of carbon-free energy. In light of growing AI infrastructure, tech giants are scrambling for reliable, sustainable power sources to fuel their data centres. The deal between Constellation Energy and Microsoft reflects this trend, as nuclear energy offers a steady, carbon-free alternative.

A bold energy pivot for Microsoft

The decision by Microsoft to partner with Constellation Energy highlights its commitment to decarbonising its operations. Microsoft’s data centres, increasingly essential for processing AI workloads, are a major driver of energy consumption. By securing a long-term, clean energy source from the revived nuclear plant, Microsoft aims to reduce pressure on the regional power grid and meet its target of becoming carbon-negative by 2030.

Paul Adams, spokesperson for Constellation Energy, noted that the decision to restart the plant was driven entirely by the supply agreement with Microsoft. He clarified that although the plant will receive federal tax credits under the Inflation Reduction Act, no state or federal funding was utilised in this project.

For Microsoft, this move is part of a broader trend within the tech industry. Tech companies are actively seeking long-term energy contracts to power their AI and data infrastructures, many of which are located in energy-intensive regions. The deal positions Microsoft as a leader in the sustainable AI race, securing a carbon-neutral solution in an industry demanding more electricity every day.

Nuclear energy’s resurgence in the AI era

The agreement between Microsoft and Constellation Energy also represents a shift in the perception of nuclear energy, once marred by the 1979 incident at the same plant. The partial meltdown at Three Mile Island’s Unit 2 reactor had long cast a shadow over nuclear energy in the U.S., leading to stricter safety regulations and increasing the cost of new plant construction.

However, as AI and data infrastructure expand rapidly, companies are looking beyond traditional energy sources. Nuclear power, capable of providing a large and stable supply of carbon-free electricity, is increasingly viewed as a vital component in meeting this rising demand. The restart of Unit 1 at Three Mile Island could signal the beginning of a broader nuclear revival, as tech companies seek energy sources that can sustain their growth.

Expert insight: Tech and nuclear—an inevitable marriage?

Energy analysts suggest that the Microsoft-Constellation deal could pave the way for similar collaborations between tech firms and energy providers. With AI predicted to dominate future technological advancements, reliable power sources like nuclear energy are no longer just an option—they are becoming a necessity. Experts believe that the revival of nuclear power plants like Three Mile Island represents a significant opportunity for tech companies to reduce their carbon footprint while meeting growing energy needs.

As these companies shift their focus to sustainability, nuclear energy, once sidelined, could experience a renaissance. However, it remains to be seen how other energy providers and regulators will respond to these developments, especially as the demand for AI-powered data centres shows no signs of slowing down.

Is the AI revolution fuelling nuclear energy’s comeback?

While the rise of AI continues to drive energy consumption, traditional sources of power such as coal and natural gas face increasing scrutiny for their environmental impact. With Microsoft’s significant AI investments, this deal signals a potential turning point for the future of nuclear energy in the tech world. Tech firms like Amazon and Google are also exploring ways to power their operations sustainably, creating a ripple effect that could push nuclear energy back into the spotlight.

The convergence of AI and nuclear energy reflects a broader shift in the global energy market, where sustainability and reliability are becoming the most valuable commodities. This deal could serve as a model for future partnerships in the tech and energy sectors, proving that nuclear power is far from obsolete in an era of artificial intelligence and data-driven technologies.