Amazon Announces $20 Billion Investment in Pennsylvania Data Centers
Amazon has revealed plans to invest $20 billion in two data center complexes in Pennsylvania, marking one of the largest capital investments in the state’s history. The tech giant’s cloud computing subsidiary, Amazon Web Services, will develop the centers, with one located alongside the Susquehanna nuclear power plant in northeastern Pennsylvania and the other at the Keystone Trade Center in Fairless Hills.
The data center near the Susquehanna nuclear power plant has drawn federal scrutiny due to its unique arrangement to directly connect to the power plant. This “behind the meter” connection allows Amazon to tap into the plant’s power output, potentially bypassing grid congestion and speeding up development timelines. However, this arrangement has raised concerns about fairness and the impact on other grid users.
The Federal Energy Regulatory Commission (FERC) has put the deal on hold, citing procedural grounds. The regulatory uncertainty surrounding this deal and potential future agreements has left the industry waiting for clarity.
This investment is part of Amazon’s broader infrastructure expansion to meet growing demand for artificial intelligence products. Since the start of 2024, Amazon has committed approximately $10 billion each to data center projects in Mississippi, Indiana, Ohio, and North Carolina.
Pennsylvania Governor Josh Shapiro hailed the Amazon investment as the largest capital investment in the state’s history. The announcement comes amid a surge in Big Tech data center investments in Pennsylvania, with Microsoft recently announcing a deal to restart the shuttered Three Mile Island nuclear power plant to supply its data centers.
The rapid growth of cloud computing and artificial intelligence has fueled demand for data centers, which require significant power to operate servers, storage systems, and cooling equipment. The arrangement between Amazon and Talen Energy, the majority owner of the Susquehanna nuclear power plant, involves a $650 million deal for 960 megawatts of power – enough to power over half a million homes.
As Big Tech continues to invest heavily in data centers, the industry faces challenges related to power procurement and grid connectivity. Direct connections to power plants can accelerate development but raise regulatory and fairness concerns.
