Google (Nasdaq: GOOG, GOOGL) announced Tuesday a $4.3 billion agreement with Constellation Energy (Nasdaq: CEG) to bring 890 megawatts of nuclear power online through a 20-year power purchase agreement, the latest step in the technology industry’s race to secure electricity for the AI buildout. Constellation shares were up more than 12% in Tuesday trading, while Google was slightly lower.
The new capacity will not come from new reactors. It will come from upgrades at six existing nuclear plants across Illinois, New Jersey, and Pennsylvania, including modernized turbines, steam generators, and digital control systems. Upgrading existing plants is generally a faster route to new capacity than building reactors from scratch, which can take years to permit and construct. By the usual rule of thumb that a gigawatt powers nearly 800,000 homes, 890 megawatts is enough for roughly 700,000.
The structure matters for both sides. Google says the contract gives Constellation the revenue certainty it needs to invest in updates to 11 of its reactors, and that it is designed so utility customers do not absorb added costs from the AI boom. Constellation will also use Google’s Gemini Enterprise software for site selection, outage management, and infrastructure protection, which makes this a technology partnership as well as a power contract.
Google is not alone in locking up nuclear supply. Microsoft signed a 20-year agreement with Constellation in 2024 to source power from a previously shuttered reactor at Three Mile Island by 2028. Amazon has signed its own nuclear power deal with Constellation, and Meta has agreed to a 20-year purchase of power from Vistra’s plants and also has a 20-year agreement for the output of Constellation’s Clinton plant in Illinois. That gives Constellation long-term agreements with four of the largest technology companies. Google has also invested in nuclear projects in Georgia, Iowa, and Tennessee, and companies across the industry are exploring small modular reactors designed to deliver megawatts rather than a full gigawatt.
The pattern points to where the AI buildout is actually constrained. Chips and data center shells can be ordered, but reliable around-the-clock power cannot be added quickly. That is why the largest buyers are signing two-decade contracts years before the electricity arrives, a dynamic that runs through the US data center construction boom. It also helps explain why a single contract can move a power generator’s stock by double digits, since it converts uncertain future demand into contracted revenue. Nuclear carries a lingering public stigma, but it offers clean, steady output compared with carbon-based options.
For small and microcap investors, the read-through is about the supply chain around power rather than the contracts themselves. Upgrading six plants and eleven reactors means demand for turbine and steam generator components, digital controls, engineering services, and grid equipment, areas where smaller specialized companies operate. The caution is that Constellation’s jump shows how quickly the market prices in announced deals. Whether smaller names benefit depends on whether orders actually reach them and whether the hyperscalers keep spending at the current pace while borrowing costs stay elevated.
