Amazon’s Nuclear Deal Stalled — But Its AI Power Demand Won’t
Big Tech has the cash to pay a premium for energy and address any regulatory concerns.
An Amazon Web Services datacenter in Ashburn, Virginia.
Photographer: Nathan Howard
Nuclear power plants are designed to withstand a plane crash. We are now getting a live experiment in whether the nuclear sector is built of similar stuff, after federal regulators dropped a bomb on Friday night. In a 2-1 vote, the Federal Energy Regulatory Commission rejected an amended interconnection agreement for the deal that sparked a frenzy for nuclear power stocks earlier this year: Amazon.com’s acquisition of a datacenter co-located with a reactor owned by Talen Energy Corp. Few saw it coming, and the sector dived on Monday morning.
Once the smoke clears, though, two realities are likely to re-emerge: Datacenter builders want power supply secured sooner rather than later and they can afford to pay a premium for it. As long as the market’s foundational assumption — that we are in the early innings of an artificial intelligence-inspired datacenter boom — holds, power developers will benefit. The FERC ruling will reshape how that happens, however.