Amazon Goes Nuclear, Acquires $650 Million Nuclear Data Center
Talen Energy Corporation has finalized the sale of its 960MW Cumulus data center campus located in Pennsylvania to a major cloud service provider, revealed to be Amazon (NASDAQ: AMZN), according to an investor presentation released this week. The deal marks a significant move in the digital infrastructure space, with Amazon yet to officially comment on the acquisition.
The transaction, valued at $650 million, includes the site and assets of Cumulus Data, with $350 million paid upfront and $300 million escrowed, to be released upon the completion of development milestones expected in 2024.
Talen’s President and CEO, Mac McFarland, expressed satisfaction with the deal, stating, “We are pleased today to have sold our Cumulus data center campus, unlocking significant value for Talen.”
The Cumulus data center campus, spanning 1,200 acres, draws its power from Talen Energy’s neighboring 2.5GW nuclear power station, the Susquehanna Steam Electric Station (SSES), located in Luzerne County. Talen commenced construction on the campus in 2021, completing its first 48MW hyperscale facility and a separate cryptomine facility last year.
Amazon Web Services (AWS) plans to develop a 960MW data center campus at the site, with minimum contractual power commitments set to increase incrementally over several years, potentially reaching up to 480MW. Talen will additionally supply AWS with energy through a 10-year Power Purchase Agreement (PPA) from the Susquehanna site.
The Susquehanna Steam Electric Station, commissioned in 1983, is one of the largest nuclear power plants in the US and has been under Talen Energy’s ownership since 2015.
Talen Energy’s venture into digital infrastructure began in 2020 with the formation of Cumulus Growth, focusing on investments at the intersection of digital infrastructure and power. This included Cumulus Data, specializing in hyperscale data centers, and Cumulus Coin, focusing on digital currency mining.
Nuclear shift
This acquisition marks a significant shift in the tech industry’s approach to nuclear power. Until recently, Jeff Bezos, Amazon’s former CEO, had been a prominent supporter of environmental organization NRDC, which has historically advocated for the closure of American nuclear power plants. NRDC’s successful campaign against Indian Point resulted in New York City’s reliance on natural gas and diesel for energy, and they nearly achieved a similar outcome at Diablo Canyon in California.
While Bezos’ funding to NRDC may have been unaware of the organization’s stance on nuclear energy, Amazon’s purchase of a data center directly linked to a nuclear plant signifies a departure from this anti-nuclear sentiment. Unlike Microsoft, which has openly embraced nuclear energy, Amazon has remained relatively silent on the issue until now.
The significance of Amazon’s move extends beyond the tech industry. It underscores a broader narrative surrounding nuclear energy’s role in environmental, social, and governance (ESG) considerations. Previously, major tech companies championed renewable energy, often misleadingly claiming to be powered entirely by renewables.
This development poses a challenge for financial institutions and ESG ratings agencies, which must now acknowledge that tech giants like Amazon are openly incorporating zero-emission nuclear energy into their operations. As data center demand continues to surge, and with major players like Microsoft and Amazon leading the charge in purchasing nuclear power, we stand at the dawn of a new era for nuclear energy.
Information for this briefing was found via Data Center Dynamics and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
