In a significant move for the tech industry, Amazon announced on Monday its plans to invest a staggering $20 billion into two major data center complexes in Pennsylvania. This investment includes a facility being constructed adjacent to the Susquehanna nuclear power plant, which is currently under federal scrutiny due to its unique energy sourcing arrangement.
Kevin Miller, the vice president of global data centers at Amazon Web Services (AWS), revealed that one of the new data centers will be located just north of Philadelphia. The second facility will be situated in Fairless Hills at the Keystone Trade Center, a logistics campus that stands on the site of a former U.S. Steel mill. This strategic location aims to bolster Amazon's infrastructure and meet the growing demand for cloud computing and artificial intelligence services.
Governor Josh Shapiro hailed this announcement as the largest capital investment in Pennsylvania's history. This influx of funds adds to the substantial investments already flowing into the state from major tech companies, reinforcing Pennsylvania's status as a hub for data center development.
Since the beginning of 2024, Amazon has committed approximately $10 billion each to data center projects in Mississippi, Indiana, Ohio, and North Carolina. This aggressive investment strategy highlights Amazon's intent to solidify its position in the competitive landscape of cloud computing and AI technologies.
The Susquehanna nuclear power plant, majority-owned by Talen Energy, has entered into a deal with Amazon, selling its data center for $650 million. This agreement aims to provide a remarkable 960 megawatts of power—enough to supply energy to over half a million homes. However, the arrangement has raised concerns, as it involves a “behind the meter” connection that is currently under review by the Federal Energy Regulatory Commission (FERC).
This FERC review is the first of its kind and has sparked debate regarding the fairness of diverting power to higher-paying customers. Questions arise about whether this strategy will compromise power availability for other users and the implications of exempting large-scale power consumers from grid fees. Traditionally, direct energy sourcing from power plants can significantly expedite development timelines for data centers, providing a more efficient solution than navigating congested electricity grids.
As the landscape of energy and technology evolves, other tech giants are also making strides in Pennsylvania. Notably, Microsoft has reached an agreement with the owners of the decommissioned Three Mile Island nuclear power plant to restart operations under a 20-year contract, ensuring energy supply for its data centers across four states. Additionally, the owners of Pennsylvania's largest former coal-fired power plant are planning to transform the site into a $10 billion natural gas-powered data center campus.
As these developments unfold, Pennsylvania is poised to become a leading player in the data center industry, driven by substantial investments from major technology companies like Amazon and Microsoft.
