Microsoft's nuclear deal signals that AI's real bottleneck may be electricity, not chips—and one U.S. utility could be the biggest winner

In late 2024, Microsoft signed a long-term agreement to restart a nuclear reactor at Three Mile Island to supply electricity for its data centers, marking a shift in how major tech companies address AI's massive power demands.

AI systems require enormous amounts of around-the-clock electricity to operate. Building new power plants often takes years of permitting and regulatory approvals, creating a potential constraint that could outpace advances in chip and data center construction.

Constellation Energy, the largest producer of nuclear power plants in the U.S., may benefit from growing data-center electricity demand. The company already owns one of the largest fleets of operating nuclear plants and can potentially sell electricity directly to data-center operators via long-term agreements, similar to its arrangement with Microsoft.

Constellation Energy's stock has risen close to 600% in the last five years as investor expectations for future growth have increased.