Amazon is set to fund the development of a proposed 960-megawatt nuclear plant in Indiana, a move that would see the tech giant become the first customer for its power. Utility company American Electric Power (AEP) will operate the plant, with X-energy supplying the reactors.

The new power plant will consist of 12 Xe-100 small modular reactors, located on the site of a demolished coal power plant just south of Terre Haute. This deal is the second commercial agreement between Amazon and X-energy, and it’s three times larger than the first, announced two years ago. Amazon has invested heavily in X-energy, leading a $700 million Series C-1 round in October 2024, with plans 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, with the power also serving Amazon’s data centers. However, the timeline for this ambitious project is still uncertain, as X-energy faces legal challenges at its Seadrift site, southeast of Houston, Texas, where four Xe-100 reactors are also planned.

The development of small modular reactors (SMRs) like those being developed by X-energy is seen as a promising way to revitalize the nuclear industry, which has struggled with budget overruns and delays in recent years. By shrinking the reactor, companies hope to achieve more efficient mass manufacturing, but experts caution that significant benefits might not be seen for a decade.

The news of the Amazon deal sent X-energy’s shares up about 10% in pre-market trading, but they have since cooled down, suggesting a cautious approach among investors.