Amazon to invest $20 billion in Pennsylvania data centers, taps nuclear power

What Happened

Amazon announced a $20 billion investment in two major data center complexes in Pennsylvania, one adjacent to a nuclear power plant and another in Fairless Hills. This marks the largest capital investment in the state’s history, according to Governor Josh Shapiro, as the tech giant accelerates infrastructure spending to support cloud computing and AI.

Tell Me More

– Amazon Web Services will build a data center complex next to the Susquehanna nuclear power plant in northeastern Pennsylvania and another complex in Fairless Hills, at the Keystone Trade Center, a former U.S. Steel site.

– The Susquehanna site involves a “behind-the-meter” deal, giving Amazon direct access to 960 megawatts of nuclear energy — 40% of the plant’s output.

– The deal was blocked on procedural grounds by FERC (Federal Energy Regulatory Commission) and remains under review, raising broader questions about power access fairness.

– Amazon bought the nuclear-adjacent data center from Talen Energy in 2023 for $650 million.

– Since early 2024, Amazon has committed $10 billion each to data centers in Mississippi, Indiana, Ohio, and North Carolina.

– The rise in AI and cloud computing is driving demand for faster, high-powered infrastructure like these centers.

– “Behind-the-meter” access allows faster deployment by bypassing the congested U.S. power grid.

– Regulatory outcomes could affect future energy deals between Big Tech and energy producers.

– Microsoft has also entered a deal to potentially restart the Three Mile Island nuclear plant to supply its data centers.

– A former coal plant site in Pennsylvania is being converted into a $10 billion natural gas-powered data center campus.

The Voices

– In a statement, Gov. Josh Shapiro called it the largest capital investment in Pennsylvania’s history.

– Kevin Miller, vice president of global data centers at Amazon’s cloud computing subsidiary, Amazon Web Services, told The Associated Press that the company will build another data center complex just north of Philadelphia.

The Context

The rapid growth of cloud computing and artificial intelligence has fuelled demand for data centers that need power to run servers, storage systems, networking equipment and cooling systems.

For Big Tech, plugging energy-hungry data centers directly into a power plant can take years off their development timelines and is a much faster route to procuring power than having to connect to the congested electricity grid.

However, these direct power deals are beginning to face regulatory scrutiny over their fairness and impact on the broader grid.