Amazon announced on Monday that it will provide funding for the development of a proposed 960-megawatt nuclear power plant in Indiana and will become the first customer to purchase its electricity. The utility company American Electric Power ( AEP ) will be responsible for operating the plant. X-energy, which designs small modular nuclear reactors and went public in April this year, will provide the reactors.
This new power station will consist of 12 Xe-100 small modular reactors and is located on the site of a demolished coal-fired power plant south of Tréhout. This transaction is the second commercial agreement between Amazon and X-energy, and its scale is three times that of the first agreement announced by both parties two years ago.
Amazon has previously made significant investments in X-energy, leading the $700 million C-1 round of financing for the company in October 2024. Both companies have stated that their ultimate goal is to build 5 gigawatts of additional nuclear power capacity in the United States by 2039.
Unlike many of the newly announced power stations, these reactors will be connected to the public power grid. However, Amazon stated that this electricity will also be used to power its data centers.
However, the aggressive timelines of these companies still depend on whether X-energy can successfully deliver its first power station project. This project is located within a Dow Chemical plant in southeastern Houston, Texas. The site of this project, known as Seadrift, has recently become the focus of a lawsuit filed in Texas. Texas accuses the plant of having a "chronic non-compliance" with regulations and permits regarding water use and solid waste management.
X-energy has not yet commenced construction on the Seadrift project. This project will deploy 4 Xe-100 reactors to provide thermal energy and electricity for this chemical plant. The company stated that its construction permit has entered the final stage of review by the U.S. Nuclear Regulatory Commission.
Startups and large cloud computing companies are betting that small, modular reactors like the one being developed by X-energy ( SMR ) will help the nuclear power industry emerge from its downturn. Recently built nuclear power plants in the United States have experienced serious budget overruns and construction delays.
By reducing the size of reactors, companies like X-energy hope to control costs and timelines through mass production. Nevertheless, this may still be a daunting task. Experts say that the benefits of mass production usually take about 10 years to become apparent.
X-energy went public on NASDAQ in April, with a pricing of $23 per share for IPO. The enthusiasm of investors drove its stock price up by 27% on the first trading day, but since then, the stock price of this newly listed company has fallen by nearly two-thirds.
News of Amazon's deal pushed the X-energy stock price up by about 10% in pre-market trading, but as of press time, the stock was still down by less than 2%.
