Google, Oracle Back US Nuclear Upgrades for Data Centers

Google and Oracle (NYSE:ORCL) are underwriting massive upgrades to legacy US nuclear plants to secure electricity for their expanding data centers, funneling billions of dollars into separate deals.

Google, a holding company of Alphabet (NASDAQ:GOOGL), announced it had finalized a 20-year power purchase agreement with Constellation Energy (NASDAQ:CEG) Energy to fund physical and digital overhauls at 11 operating nuclear units across Illinois, Pennsylvania, and New Jersey.

The modernization program is backed by a US$4.3 billion capital investment from Constellation and is slated to add 890 megawatts to the PJM Interconnection grid by 2032.The first tranche of new capacity goes live in 2028.

The 890-megawatt uprate equates to the output of a large conventional reactor. Upgrading turbines, steam generators, and digital control systems at existing sites bypasses the multi-year permitting and interconnection bottlenecks that stall greenfield construction.

Google and Constellation also executed a concurrent 15-year supply agreement for an additional 2,700 megawatts from Constellation's broader PJM fleet. The contract locks in long-term revenue to keep the generation assets economically viable.

Under a separate five-year term, Constellation will integrate Google Cloud’s Gemini Enterprise artificial intelligence platform across its operations to accelerate uprate planning and optimize plant output. Constellation estimates the nuclear upgrades will sustain 4,400 existing jobs and require 7,200 construction workers.

In a parallel transaction, Oracle (NYSE:ORCL) committed to subscribing to a portion of the output from NextEra Energy's (NYSE:NEE) Point Beach nuclear plant in Wisconsin.

Subject to state regulatory approval, Oracle will absorb approximately US$300 million in rising energy costs associated with the twin-unit facility.

"Oracle is stepping up with a commitment that will directly benefit more than one million Wisconsin utility customers," Oracle Cloud Infrastructure executive vice president Mahesh Thiagarajan said. "By absorbing approximately USD300 million in rising energy costs, we are helping protect Wisconsin ratepayers while supporting the reliable, carbon-free power the state depends on."

The energy subscription supports Oracle’s Project Lighthouse, an US$11 billion data center development in Port Washington, Wisconsin. Oracle plans to fully fund the facility's power costs to prevent infrastructure inflation from hitting local residential utility bills.

Elsewhere, hyperscalers are aggressively locking down continuous, carbon-free generation to power artificial intelligence hardware.

Constellation recently secured a 20-year contract with Amazon (NASDAQ:AMZN) to add 190 megawatts and extend the operating life of the Calvert Cliffs nuclear plant in Maryland.

Google also previously finalized agreements to upgrade Georgia Power's Vogtle and Hatch plants and restart NextEra's Duane Arnold facility in Iowa.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.