Microsoft’s search for carbon-free energy is now tied to one of the most recognizable names in American nuclear power. A new agreement with Constellation Energy could bring Pennsylvania’s shuttered Three Mile Island Unit 1 back online, with Microsoft set to claim the plant’s entire output for at least 20 years.
The arrangement is not only about one facility. It shows how the growth of AI data centers, cloud computing, and streaming services is pushing major technology companies toward large, steady sources of electricity.
What The Deal Covers
Microsoft and Constellation Energy have announced an agreement that would reopen Three Mile Island’s Unit 1, which was shuttered in 2019 “due to poor economics,” according to Constellation. The plant would be renamed Crane Clean Energy Center.
Under the deal, Microsoft would purchase all of the plant’s roughly 835 megawatts of generation. The source article describes that amount as enough to power approximately 800,000 homes. The agreement would run for 20 years starting in 2028, if regulators approve the restart.
The electricity would not be sent directly to Microsoft facilities. Instead, power from the plant would flow into local interconnections. In practical terms, the agreement gives Microsoft a claim on the plant’s generation while the physical electricity moves through the grid.
Constellation said it plans to spend $1.6 billion revitalizing the facility. That work would include inspections and replacements for the reactor’s turbines and cooling systems. Tax credits and other federal subsidies from the Inflation Reduction Act would also help support the reopening.
Why Three Mile Island Matters
Three Mile Island carries a complicated history. The plant became infamous in 1979, when a partial meltdown in Unit 2 helped trigger national concern over nuclear safety. The Microsoft agreement concerns the adjacent Unit 1, not Unit 2.
If the plan reaches its targeted 2028 reopening, Unit 1 would be among the first wave of shuttered nuclear plants brought back into service. That makes the project important beyond Pennsylvania. It is a test of whether closed nuclear capacity can be returned to the grid when demand for electricity is rising.
The nuclear debate remains difficult. The source article notes that nuclear energy as a whole is responsible for many fewer deaths than most other forms of power generation, especially when air pollution is considered. At the same time, nuclear accidents can create massive cleanup costs, and the industry still faces the unresolved challenge of safely sequestering nuclear waste for thousands of years.
Those tradeoffs are why this agreement is likely to draw attention from several directions at once: technology companies looking for reliable power, energy companies looking for long-term buyers, regulators reviewing safety and economics, and communities with memories of past nuclear incidents.
AI Is Changing The Power Conversation
The deal comes as data centers demand more electricity across the technology industry. These facilities support generative AI models, cloud computing, and streaming services, all of which depend on large-scale computing infrastructure.
Industry-wide, data centers demanded upward of 350 TWh of power in 2024, according to a Bloomberg analysis cited in the source article. That was up substantially from about 100 TWh in 2012. An IEA report cited in the source expects demand to keep rising, reaching the 620 to 1,050 TWh range by 2026.
Generative AI is still described as a small but quickly growing part of total data center energy use. One study cited in the source projected total AI energy use between 85 and 134 TWh by 2027, a range described as roughly in line with the power needs of the PC gaming industry.
That context explains why a 20-year power agreement for a nuclear plant is attractive to a company like Microsoft. Data centers need capacity that can support continuous operation, and Microsoft has framed the agreement as part of its broader decarbonization effort.
“This agreement is a major milestone in Microsoft’s efforts to help decarbonize the grid in support of our commitment to become carbon negative,” Microsoft VP of Energy Bobby Hollis said in a statement. “Microsoft continues to collaborate with energy providers to develop carbon-free energy sources to help meet the grids’ capacity and reliability needs.”
Big Tech’s Nuclear Interest Is Growing
Microsoft is not the only technology company connecting data center growth with nuclear power. The source article notes that Amazon purchased a $650 million data center powered by the nearby Susquehanna nuclear plant in Pennsylvania months before the Three Mile Island deal was reported.
Constellation’s chief executive Joseph Dominguez linked the issue directly to AI competition in comments to The Washington Post. “The energy industry cannot be the reason China or Russia beats us in AI,” he said. “This plant never should have been allowed to shut down… It will produce as much clean energy as all of the renewables [wind and solar] built in Pennsylvania over the last 30 years.”
The agreement still depends on regulatory approval, and the plant would not reopen until 2028 under the current plan. But the signal is already clear: as AI and cloud infrastructure expand, technology companies are looking for power sources that can match their scale.
For Microsoft, the Three Mile Island agreement would secure a long-term supply of carbon-free generation. For Constellation, it could justify a major restart investment. For the wider energy market, it raises a larger question: whether shuttered nuclear plants can become part of the answer to data center power demand.