Microsoft Goes Nuclear. Here Are the Biggest Beneficiaries of Its Massive Power Grab.

Microsoft (NASDAQ: MSFT) is investing heavily in building out data centers to support the growth of its cloud computing and artificial intelligence (AI) operations. Those facilities require tremendous power, especially when used for AI. For example, AI applications like ChatGPT require 10 times the electricity to process a search query compared to a typical Google search.

That's leading Microsoft to secure power to support its growth ambitions. It recently signed a deal to buy nuclear energy produced by Constellation Energy (NASDAQ: CEG). It also signed a massive renewable energy deal with Brookfield Renewable (NYSE: BEPC)(NYSE: BEP). These agreements will help ensure Microsoft has the power it needs to thrive in the future.

Going nuclear

Microsoft recently signed a 20-year power purchase agreement (PPA) with leading nuclear energy producer Constellation Energy. The deal will help launch the Crane Clean Energy Center by restarting Three Mile Island Unit 1. The company had shut down that unit five years ago for operational and economic reasons. It will now bring it back online to supply Microsoft's data centers with carbon-free energy for decades to come.

Constellation Energy expects the restarted nuclear-generating unit, renamed after its former CEO, to begin producing power by 2028. It will mark the country's first-ever restart of a previously retired nuclear power plant. The company plans to invest about $1.6 billion to bring the plant back online.

It would have the capacity to generate 835 megawatts (MW) of carbon-free electricity and could operate through at least 2054. The 20-year agreement for capacity at the revamped Crane Clean Energy Center is the largest-ever PPA signed by Constellation Energy. It will supply the power company with steady income for the next two decades.

Three Mile Island Unit 1 is next to the notorious Unit 2, which shut down in 1979 after a partial meltdown. That accident, the most famous one in the country, didn't impact Unit 1. Constellation Energy won't restart that second unit.

Tapping into Microsoft's need for power

Constellation Energy isn't the only company benefiting from Microsoft's need for power. The tech titan signed a massive collaboration agreement with Brookfield Renewable in May. The deal will see the leading global renewable energy producer deliver over 10.5 gigawatts (GW) of new renewable power capacity by 2030.

That agreement is the largest corporate PPA ever signed, nearly eight times bigger than the prior record. It provides a pathway for Brookfield to build and deliver 10.5 GW of new renewable energy capacity in the U.S. and Europe to support Microsoft's cloud and AI expansions while helping it achieve its goal of having 100% of its power come from zero-carbon energy by 2030. It builds on their existing agreements where Brookfield is supplying Microsoft with nearly 1 GW of power capacity.