Stock New
By Emily Bary Constellation's stock is rising sharply following a deal that equates to as much power as would be supplied by a new nuclear reactor Google and other AI companies are using nuclear energy as they try to meet the steep power requirements of their data centers. Google on Tuesday struck a new long-term deal with Constellation Energy, underscoring that obtaining enough power remains a critical issue for major artificial-intelligence players. The collaboration amounts to 890 megawatts of new nuclear capacity through existing Constellation sites in Illinois, according to a joint blog post.
The companies said the supply covered by this agreement is equivalent to what would be produced by a new nuclear reactor. Beyond this nuclear-generation deal, the companies also inked a 15-year agreement covering an additional 2,700 megawatts. "This financial structure ensures that Constellation's (CEG) operating generation assets continue to deliver energy and capacity to the PJM market," the blog post noted, referring to the major energy region in the eastern United States.
Constellation shares are up more than 11% in moning action on Tuesday. Shares of Alphabet (GOOG) (GOOGL), Google's parent company, are down fractionally. The two parties portrayed the deal as showing the value of nuclear "uprates," or the idea of generating more energy from a nuclear power plant.
"By modernizing and upgrading turbines, steam generators, and digital control systems at operating plants, uprates deliver substantial capacity gains without the multi-year timelines or interconnection bottlenecks associated with greenfield construction," the blog post noted. Constellation CEO Joe Dominguez said in a statement that the partnership is "a model for how technology companies and the energy industry can work together to responsibly develop the digital economy and invest in our nation's energy infrastructure in a way that delivers grid-wide benefits for all, funded by private entities." Bernstein analyst Sunaina Ocalan said the Google deal "reinforces the strategic value of firm, clean, reliable power" and Constellation's role in supplying it through its nuclear footprint. She noted that the announcement didn't mention the pricing or earnings contributions.
The deal comes as AI data centers gobble up power, leaving companies worried about their ability to secure sufficient energy for future endeavors. All the while, the energy crunch has rippled through local communities, sparking community resistance and political pushback. Morgan Stanley analyst Stephen Byrd wrote Monday that Nvidia recently validated his belief that "there is not enough power to meet demand, and there are more semiconductors being built than there are places to put them." "The AI buildout is colliding with a grid that cannot deliver power fast enough," Morgan Stanley's Andrew Percoco wrote in a separate report on Tuesday.
Don't miss: Building U.S. data centers is getting so expensive that AI companies are moving overseas -Emily Bary This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 10-06-26 0940ET Copyright (c) 2026 Dow Jones & Company, Inc. The articles, information, and content displayed on this webpage may include materials prepared and provided by third parties.
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