Microsoft Builds Dedicated Nuclear Team to Power AI Data Centers

What Happened

Microsoft has formed a dedicated internal team focused on nuclear energy procurement and development, targeting the power demands of its artificial intelligence data center portfolio. The team is tasked with sourcing nuclear power through a combination of existing plant agreements, small modular reactor contracts, and longer-term infrastructure partnerships.

Background

Microsoft has committed to powering its operations with carbon-free energy as part of broader sustainability pledges, while simultaneously undertaking one of the largest AI infrastructure build-outs in the technology sector. The company has pledged to invest $80 billion in data centers in fiscal year 2025 alone, with a significant portion of that spending directed toward facilities in the United States.

Nuclear energy has attracted renewed interest from major technology companies because it provides continuous, high-density, carbon-free electricity, a combination that intermittent renewable sources such as wind and solar cannot consistently deliver at the scale AI workloads require. A single large-scale AI training cluster can draw hundreds of megawatts continuously, placing acute pressure on power procurement strategies.

Microsoft previously signed a landmark agreement in September 2023 to restart Unit 1 of the Three Mile Island nuclear facility in Pennsylvania, operated by Constellation Energy. That 20-year power purchase agreement, covering approximately 835 megawatts of capacity, was described at the time as one of the largest corporate nuclear energy deals on record. The plant, renamed Crane Clean Energy Center, is scheduled to return to service in 2028.

What the Nuclear Team Will Do

The newly formed group sits within Microsoft's energy division and is responsible for evaluating, negotiating, and managing nuclear energy agreements across multiple technology pathways. Those pathways include power purchase agreements with existing nuclear operators, investments in small modular reactor developers, and participation in advanced nuclear projects at earlier stages of development.

Small modular reactors, which are factory-built units designed to produce between 50 and 300 megawatts, are expected to reach commercial deployment in the early 2030s in several markets. Multiple developers, including TerraPower, X-energy, and NuScale, are in various stages of licensing and construction in the United States.

Microsoft has previously disclosed a partnership with Helion Energy, a fusion energy startup, under which Helion would supply Microsoft with electricity by 2028, subject to Helion achieving commercial fusion operation. That agreement remains contingent on technical milestones that have not yet been publicly confirmed as met.

Industry Context

Microsoft is not the only technology company pursuing nuclear options. Google signed an agreement in October 2024 with Kairos Power to purchase electricity from a fleet of small modular reactors, with the first unit targeted for operation before 2030. Amazon Web Services has also entered power purchase agreements tied to nuclear facilities, including the purchase of a nuclear-powered data center campus in Pennsylvania from Talen Energy.

The U.S. Department of Energy has set a national target of tripling nuclear capacity by 2050, and the federal government has introduced licensing streamlining measures intended to accelerate new plant approvals through the Nuclear Regulatory Commission.

Data center electricity consumption in the United States is projected by the Department of Energy to reach between 6.7 and 12 percent of total national electricity use by 2028, up from approximately 4 percent in 2023, according to figures published in a 2024 DOE report.

What Happens Next

Microsoft is expected to disclose further details of its nuclear procurement strategy in its annual sustainability report, scheduled for release later in 2025.