What's happening
Microsoft signed a 20-year power purchase agreement with Constellation Energy in September 2024 to purchase all output from the restarted Three Mile Island Unit 1 nuclear reactor. The deal supports Constellation Energy's $1.6 billion investment to bring the 835 MW reactor back online by 2027, exclusively powering Microsoft's AI data centers. The U.S. Department of Energy provided a $1 billion loan to Constellation Energy on November 18, 2025, to finance the restart of the reactor, which has been offline since the 1979 Three Mile Island accident affected the adjacent Unit 2. Once operational, the plant will generate enough electricity to power approximately 800,000 homes, with all output dedicated to Microsoft's artificial intelligence infrastructure needs.
Why it matters for markets
The agreement represents a significant premium energy investment for Microsoft, with Jefferies analysts estimating the company will pay $110-$115 per megawatt-hour under the power purchase agreement, above current market rates. This dedicated nuclear capacity addresses the massive electricity demands of AI data centers, which require consistent baseload power that renewable sources cannot reliably provide. Microsoft's $3.08 trillion market capitalization and $318.27 billion in annual revenue position the company to absorb these premium energy costs as it competes in the artificial intelligence infrastructure race. The 20-year commitment demonstrates Microsoft's long-term strategy to secure reliable power for AI operations, potentially providing competitive advantages in data center capacity and reliability over rivals facing grid constraints.
Sectors and assets to watch
Nuclear energy companies stand to benefit from the precedent of restarting dormant reactors for dedicated corporate power needs, particularly operators with idle capacity that could attract similar long-term agreements from technology companies. Utility companies with nuclear assets may see increased valuation as AI-driven power demand creates new revenue opportunities through premium corporate contracts. Energy infrastructure and nuclear services companies involved in reactor restarts and maintenance could experience increased demand as more technology companies seek dedicated nuclear power sources for data centers.
What to watch next
Monitor whether other major technology companies follow Microsoft's model by securing dedicated nuclear power agreements for AI infrastructure, and track Constellation Energy's progress toward the 2027 restart timeline. Watch for additional Department of Energy loan approvals for nuclear restart projects and regulatory developments that could accelerate or hinder similar reactor revival initiatives across the United States.