Amazon is funding the development of a proposed 960-megawatt nuclear power plant in Indiana and will be its first customer, the company and its partners announced Monday. Utility American Electric Power (AEP) will operate the plant, while X-energy, a designer of small modular reactors (SMRs) that went public in April, will supply the reactors. The project will consist of 12 Xe-100 SMRs built on the site of a demolished coal plant just south of Terre Haute.

A Second, Larger Deal Between Amazon and X-energy

The Indiana plant is the second commercial agreement between Amazon and X-energy, and it is three times larger than the first, which was announced two years ago. Amazon has invested heavily in X-energy, leading a $700 million Series C-1 round in October 2024. The two companies have said they ultimately plan to build 5 gigawatts of new nuclear generating capacity in the U.S. by 2039.

Unlike many newly announced power plants, these reactors would be connected to the public electric grid, though Amazon says the power would also serve its data centers. That dual role—supplying grid electricity while directly powering Amazon's facilities—reflects the company's growing need for reliable, carbon-free power as its data center footprint expands.

The Xe-100 Reactor and the Seadrift Precedent

The Xe-100 is a small modular reactor designed by X-energy. The company's aggressive timeline for the Indiana project still depends on successfully delivering its first power plant at a Dow Chemical plant southeast of Houston, Texas. That site, called Seadrift, will host four Xe-100 reactors to provide the chemical plant with heat and electricity. X-energy has yet to break ground at Seadrift, and the company said its construction permit is in the final phases of the U.S. Nuclear Regulatory Commission's review process. The site has recently been at the center of a lawsuit filed by the state of Texas, which accuses the plant of "habitual non-compliance" with water and solid-waste regulations and permits.

Big Tech's Nuclear Pivot

Startups and large cloud computing companies are betting that SMRs will help pull the nuclear industry out of a slump. The most recent nuclear power plants built in the U.S. suffered from egregious budget overruns and slipped timelines. By shrinking the reactor, companies like X-energy hope that mass manufacturing will bring costs and schedules in line. Even then, it could be a tall order. Experts say mass manufacturing often doesn't start producing benefits for about a decade.

Amazon's investment in X-energy is part of a broader trend among technology giants seeking nuclear power to satisfy the energy demands of artificial intelligence and cloud computing. The deal also highlights a growing interest in reusing former coal plant sites, which often have existing transmission infrastructure and community ties to energy production.

Market Reaction and What's Next

X-energy debuted on the Nasdaq in April in an IPO priced at $23 per share. Investor excitement drove the price up 27% in the first day of trading, but shares of the newly public company have dropped by nearly two-thirds since then. News of the Amazon deal sent X-energy's shares up about 10% in pre-market trading, though they were down by less than 2% at the time of publication.

The Indiana project's success will depend on X-energy's ability to execute on its Seadrift plant, obtain regulatory approvals, and demonstrate that SMRs can be built on time and on budget. For Amazon, the deal represents a long-term bet on nuclear power as a cornerstone of its energy strategy, with the first reactors expected to come online in the coming decade if all goes according to plan.