Constellation Energy's stock price rose by about 14% on Tuesday, following Google's signing of one of the largest corporate power supply agreements in the history of the US electric grid, highlighting that the AI craze is turning electricity into one of the most valuable resources in the tech industry.

This agreement covers approximately 3.59 gigawatts of electricity, including an additional 890 megawatts of nuclear power capacity added through the upgrade of the existing Constellation reactors. Another 2.7 gigawatts will be supplied under a separate long-term agreement through the PJM power market.

The rising stock price has also added another beneficiary to the expanding AI infrastructure transactions. In this type of transaction, utility companies and power generators are increasingly benefiting alongside NVIDIA and other semiconductor companies.

Google locks in 3.6 gigawatts of electricity

Google's nuclear power agreement is for a period of 20 years and will support the upgrading of six Constellation nuclear power plants in Illinois, Pennsylvania, and New Jersey.

Constellation plans to invest over $4.3 billion to increase the power generation of existing reactors. The company expects that by the end of 2032, these projects will add 890 megawatts of reliable capacity to the PJM power grid. Google states that the additional nuclear power output is roughly equivalent to building another large reactor, but it can be done much more quickly.

Another 15-year agreement covers an additional 2,700 megawatts of electricity from the PJM system.

This scale reflects an increasingly prominent issue faced by the AI craze: the speed of expansion in computing power is faster than the speed of infrastructure development in electricity supply required to support its operation.

AI is transforming utility companies into technology infrastructure

This transaction illustrates why investors are increasingly viewing power suppliers as part of the AI supply chain.

By 2030, data centers in the United States are expected to consume about 10% of the country's electricity, which will require tens of billions of dollars in new investments in power generation and electric grids. This also creates opportunities for nuclear power, natural gas, renewable energy, and energy storage companies.

Constellation has already begun to build a portfolio of contracts with ultra-large-scale cloud service providers. Just last week, the company signed a 20-year nuclear power agreement with Amazon to support the addition of 190 megawatts of capacity to the Calvert Cliffs nuclear power plant in Maryland.

Similar demands have also driven broader AI power trading, and financing the required data centers, power grids, and power generation facilities has become an infrastructure challenge worth trillions of dollars.