Amazon has announced a $20 billion investment in two data center complexes in Pennsylvania, marking what Governor Josh Shapiro called the largest private sector investment in the state’s history. The tech giant will develop one data center next to the Susquehanna nuclear power plant in northeastern Pennsylvania and another in Fairless Hills at the Keystone Trade Center, a former U.S. Steel mill site.
Data Center Locations and Power Supply
The Susquehanna data center will be built adjacent to the nuclear power plant, from which it will draw its power through a “behind the meter” connection. This arrangement, while potentially speeding up development timelines, has drawn scrutiny from the Federal Energy Regulatory Commission (FERC) over concerns about diverting power from the grid and potential impacts on other consumers.
In contrast, the Fairless Hills data center will obtain its power through the electricity grid. This $20 billion investment is part of Amazon’s broader infrastructure expansion to meet growing demand for cloud computing and artificial intelligence services.
Economic Impact and Incentives
The project is expected to create significant construction jobs and generate substantial tax revenues for local governments. Governor Shapiro highlighted that the investment will help reverse the trend of talent and investment leaving Pennsylvania, bringing tech jobs for local graduates and millions of dollars in property taxes.
Pennsylvania will offer incentives to support the project, including $10 million for training programs to meet the data centers’ skills demand. Amazon will also benefit from the state’s existing sales tax exemption on data center equipment purchases.
Broader Context
This announcement follows Amazon’s recent commitments to data center projects in other states, including Mississippi, Indiana, Ohio, and North Carolina, totaling around $10 billion each. The rapid growth of cloud computing and AI has driven demand for energy-intensive data centers, leading tech companies to seek innovative power procurement strategies, including direct connections to power plants.
The deal between Amazon and Talen Energy, the majority owner of the Susquehanna nuclear power plant, involves Amazon purchasing land adjacent to the plant for $650 million and building a new, larger data center facility. This arrangement is one of several recent deals in Pennsylvania involving major tech companies and former power generation sites, including Microsoft’s agreement to restart a reactor at the shuttered Three Mile Island nuclear power plant.
As the data center industry continues to expand, questions remain about the long-term implications of such large-scale energy consumption and the impact on local grids and communities.
