US DOE Offers $5 Billion Loan to Constellation to Expand Nuclear Power for AI Data Centers
The US Department of Energy has offered a $5 billion conditional loan to Constellation Energy to uprate eight existing nuclear plants. Most of the new capacity is already committed to Google, Amazon, and Meta to support AI infrastructure.
The Trump administration's Department of Energy (DOE) has provided a conditional loan commitment of up to $5 billion to energy company Constellation Energy to support the "uprating" of eight existing nuclear power plants, aiming to add 1.1 gigawatts (GW) of generating capacity. This move directly addresses the power bottlenecks faced by tech giants building AI data centers.
According to TechCrunch, Constellation plans to use the financing to upgrade 11 existing reactors, typically involving more highly enriched uranium and equipment upgrades to handle increased power levels. Rather than building new plants, this strategy maximizes the output of current assets. Most or all of the additional power from seven of these facilities has already been purchased by Google, Meta, or Amazon. For instance, Google is the confirmed buyer of extra power from a Pennsylvania plant and four Illinois plants; Amazon is buying electricity from the Maryland Calvert Cliffs plant; and Meta is effectively buying the entire Clinton power plant in Illinois.
Constellation stated that it had already committed to spending more than $7 billion to add 1,080 megawatts (MW) of nuclear capacity specifically to deliver power to Google, Amazon, and Meta. While the loan has yet to be finalized, Constellation noted it "could lower financing costs" for the projects. By reducing the cost of capital, the DOE's loans could boost Constellation's bottom line, benefit the hyperscaler buyers, or both.
Although the Department of Energy touted the loan on Tuesday as supporting "affordable, reliable power to American homes and businesses," there is no evidence that the new nuclear capacity will lower prices for residential ratepayers. Constellation’s announcement does not specify whether the projects will maintain or lower electricity rates, and the company declined to confirm the government’s claim to TechCrunch. For investors, this event highlights the tightening financial links between utility companies and tech firms in the AI infrastructure race, with the government playing a key lever role.