Talen Energy (TLN) Inks 1.9 GW Nuclear Deal With Amazon (AMZN)
Big Tech is kicking off an arms race for nuclear power...
This week, Talen Energy (TLN) signed a deal to sell Amazon (AMZN) up to 1.9 gigawatts ("GW") of nuclear power from its Susquehanna nuclear plant in Pennsylvania.
That's roughly twice the amount of energy it takes to power all of New York City each day...
In return, Talen locks in an estimated $18 billion of revenue.
The contract will run through 2042... and it comes on the heels of Constellation Energy (CEG) striking a partnership to supply 1.1 GW of power to Meta Platforms (META).
Electricity Demand – and Prices – Are Rising in the U.S.
Electricity demand in the United States is rising for the first time in two decades. PJM, the electricity grid that covers the mid‑Atlantic, expects peak demand to grow 3% to 4% a year through 2035, double last year's forecast.
And while 3% to 4% growth sounds small, PJM announced prices at its last capacity auction that were up more than 800% from the previous year, thanks to rising demand and shrinking supply.
Amazon's answer is obvious: Lock in supply before someone else does. Over the past 12 months, the company has:
- Funded feasibility studies for small modular reactors ("SMRs") on federal land at Hanford, Washington. This deal with Talen also entails exploring building SMRs on Talen's Pennsylvania reactor site.
- Anchored a $500 million round in reactor designer X‑energy and struck memoranda with Dominion Energy in Virginia and Energy Northwest in Washington to develop more than 600 megawatts ("MW") of SMR capacity, with a road map to 5 GW from X-energy by 2039.
- Announced that Susquehanna will shift from a behind‑the‑meter arrangement to a "front‑of‑the‑meter" structure, pushing power through PJM so regulators cannot accuse Amazon of a sweetheart deal that sidesteps transmission tariffs.
In other words, Amazon is building a portfolio of nuclear options – conventional fission today, advanced fission next, and something far bigger on the horizon...
Enter the Amazon Helios Project
These deals are why Wall Street legend Whitney Tilson has been pounding the table about the "Amazon Helios Project."
His pitch points to Amazon's long‑term moonshot: fusion.
In his May 15 write‑up, he discussed what he's calling the "Amazon Helios Project," a stealth initiative he believes will ride fusion's 20‑million‑times‑the‑energy‑density physics to ultimately power data centers and artificial intelligence across the nation.
The breadcrumbs around this idea becoming reality are piling up...
- Not long ago, Microsoft (MSFT) inked a first‑of‑its‑kind fusion power purchase agreement with Helion Energy for 50 MW in the next few years, proving that cloud giants are willing to take fusion risk.
- AWS announced a collaboration with a national laboratory this week to apply its AI accelerators to plasma‑physics simulations – precisely the modeling work fusion developers need.
Today, the Susquehanna deal looks like a bridge strategy – a way to lock in energy needed to keep its servers running while Project Helios matures.
Talen's stock has already popped 8% after the announcement... But the bigger takeaway is that we are witnessing the birth of a new asset class: fully contracted, utility‑scale nuclear energy dedicated to hyperscale computing.
For all its size, the Talen agreement covers only a fraction of Amazon's current and future power needs. And it simply can't hit its net-zero pledge – or keep its servers humming – without a transformational energy source.
Fusion may be the only technology that scales fast enough and clean enough to satisfy the next generation of artificial intelligence.
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