Google parent Alphabet has contracted for 3,590 megawatts of power from Constellation Energy (CEG) inside PJM, the largest US grid, the companies said on Tuesday, according to Reuters, confirming an overnight report from Bloomberg. Roughly a quarter of it, 890 MW, is new nuclear capacity squeezed out of 11 existing reactors under a 20-year PPA backed by more than $4.3 billion of Constellation investment, expected to start delivering in 2028. The rest is a long-term supply agreement for another 2,700 MW. And in case anyone missed why this is happening now, the companies said it outright: the deal is a response to PJM's "bring your own power" proposal.

Constellation shares jumped as much as 14% premarket (they were up 6.3% when Bloomberg first broke the story last night), trading above $300 for the first time in a month. 

Zerohedge readers know this story didn't start this morning. We have been tracking the AI-nuclear trade since Microsoft agreed to restart Three Mile Island in September 2024, when nuclear names surged across the board on what was then a shocking headline. (Five years earlier, we were writing about "America's Chernobyl" finally closing its doors. Funny how the AI capex cycle changes things.) Two years later, Constellation has become Big Tech's nuclear landlord.

Below we break down the deal, why PJM forced Google's hand, what Goldman's power desk and utilities team are saying, and why the cheapest nuclear megawatt is the one already built.

The Deal: 890 Nuclear Megawatts... Plus 2,700 More

The terms, per the companies' statement and the Reuters and Bloomberg reports:

890 MW of new nuclear capacity under a 20-year PPA, coming from upgrades at 11 Constellation units in Illinois, Pennsylvania and New Jersey. The first upgraded plant is expected to start delivering in 2028.

$4.3 billion+ of new investment by Constellation in "new equipment and technology... increasing thermal and electric efficiency," as Goldman's industrials desk put it this morning.

A separate long-term supply agreement for 2,700 MW in PJM that is "not tied to a specific generation source and serves as long-term revenue certainty for Constellation's operating plants," per Google.

Translation: the 890 MW is the headline-friendly "new clean firm power" part. The 2,700 MW is essentially Google locking in a long-dated price for a big chunk of Constellation's existing output. Who needs a hedging desk when you have a hyperscaler?