Key takeaways
- Amazon is funding a 960-megawatt nuclear plant in Indiana using X-energy's small modular reactors, marking the second commercial partnership between the companies.
- The plant's completion depends on X-energy first delivering its first reactor project at a Dow Chemical facility in Texas, which has not yet begun construction.
- Cloud companies are betting small modular reactors can solve decades-long problems of cost overruns and delays that have plagued large nuclear projects.
- X-energy's stock has declined to roughly one-third of its April IPO price of $23 per share, reflecting investor skepticism about execution risks.
Amazon announced on Monday a plan to fund development of a 960-megawatt nuclear power plant in Indiana, the second major commercial project with X-energy and marking a significant escalation in Amazon’s direct investment in nuclear technology. The company led a $700 million Series C-1 investment round in X-energy in October 2024 and would serve as the first customer for power from the new facility.
The plant would consist of 12 Xe-100 small modular reactors and be built on the site of a demolished coal power station south of Terre Haute, Indiana. American Electric Power (AEP), a major utility company, would operate the facility. X-energy, a designer of small modular reactors that went public in April, would supply the reactor units. The deal is three times larger than the companies’ first commercial agreement, announced two years earlier. Amazon and X-energy have stated they aim to develop 5 gigawatts of new nuclear generating capacity across the United States by 2039.
Unlike many nuclear facilities, these reactors would connect directly to the public electric grid while also supplying power to Amazon’s data centers, creating a hybrid model where the facility generates revenue from broader utility sales while securing reliable power for Amazon’s infrastructure.
Regulatory and Construction Reality Check
Seadrift dependency
The timeline for the Indiana plant depends heavily on X-energy clearing a more immediate hurdle: bringing its first commercial project online. Located southeast of Houston, Texas, at a Dow Chemical facility called Seadrift, that plant would use four Xe-100 reactors to provide both heat and electricity to the chemical production process. X-energy has not yet broken ground at Seadrift, despite company statements that its construction permit is in the final review phases of the U.S. Nuclear Regulatory Commission approval process.
Legal headwinds
The Seadrift project faces regulatory headwinds beyond normal review timelines. Texas filed a lawsuit accusing the Dow facility of “habitual non-compliance” with water and solid-waste regulations and permits. While the suit targets the existing Dow operations rather than the new X-energy reactor, the legal action underscores the regulatory scrutiny that nuclear and chemical facilities face in the state and could influence how quickly permits move through the NRC process.
Why Cloud Companies and Startups Are Betting on Small Reactors
The traditional nuclear bottleneck
The U.S. nuclear industry has endured a sustained crisis of execution. The most recent large-scale nuclear plants built in the country experienced severe budget overruns and construction delays that extended timelines by years. These failures have cooled investment and financing for new nuclear capacity even as electricity consumption has surged and climate concerns have pushed the power industry toward sources that emit no carbon.
The small modular approach
X-energy and other companies developing small modular reactors (SMRs) believe they can break the pattern of failure through a fundamentally different model. Rather than custom-building each reactor on site, SMRs are designed for standardized manufacturing. If the same reactor design can be mass-produced over time, proponents argue, the unit costs could decline and construction schedules could become more predictable. Industry experts note that mass manufacturing typically requires approximately a decade of consistent production before cost benefits materialize. Applied to X-energy’s timeline, that would suggest meaningful cost reductions might not arrive until around 2034.
Electricity demand and data centers
Cloud computing companies operate massive data centers that consume electricity at scales comparable to small cities. As artificial intelligence services expand and demand for cloud infrastructure grows, these companies face pressure to secure reliable, abundant power. Direct investment in power generation allows companies like Amazon to sidestep utility constraints and ensure sufficient capacity for growth. The commitment to 5 gigawatts by 2039 represents an enormous scaling challenge, requiring not just regulatory success but also manufacturing breakthroughs that have not yet been proven at commercial scale.
X-energy’s Public Market Standing
X-energy debuted on Nasdaq in April at $23 per share. The IPO generated immediate investor enthusiasm, with the stock rising 27 percent on the first day of trading. Since then, the shares have declined to roughly one-third of the opening price, reflecting broader market skepticism about the timeline and execution risks inherent in a company commercializing novel reactor technology.
The announcement of the Amazon partnership triggered a pre-market rally of approximately 10 percent, suggesting that concrete commercial agreements can shift investor sentiment. By publication, however, shares had retreated, trading down less than 2 percent. This volatility underscores the binary nature of X-energy’s value proposition: the company succeeds if it can deliver working reactors on time and on budget, a challenge that has defeated much larger nuclear programs.
Amazon’s Broader Energy Strategy
Amazon’s direct participation in nuclear development reflects a strategic shift by major cloud providers toward owning energy infrastructure rather than simply purchasing from utilities. Google, Microsoft and Meta have all announced partnerships for nuclear, wind and geothermal power, but Amazon’s move represents particularly deep financial commitment, including both venture investment in X-energy and now direct funding of construction.
The Indiana facility’s hybrid grid-connected model creates multiple revenue streams: Amazon secures a reliable power source for its data centers, AEP and the utility system gain additional generation capacity, and the facility can sell excess power into wholesale electricity markets. This structure reduces the risk that the plant becomes a stranded asset if Amazon’s demand grows more slowly than currently projected.
Source: TechCrunch
Frequently Asked Questions
When would the Indiana nuclear plant be operational?
The article does not provide a specific completion date. The companies aim to develop 5 gigawatts of capacity by 2039, but the plant's timeline depends on X-energy successfully completing its first project at Seadrift, Texas, which has not yet begun construction.
What is a small modular reactor and why does Amazon prefer it?
Small modular reactors (SMRs) like X-energy's Xe-100 are designed for standardized mass manufacturing rather than custom building each reactor on site. Proponents believe this approach can reduce the budget overruns and delays that have plagued large nuclear plants. Amazon is betting SMRs will provide reliable power for its data centers and support its growth in cloud and AI services.
What happened to X-energy's stock price since its IPO?
X-energy went public in April at $23 per share and rose 27 percent on day one, but has since fallen to approximately one-third of the opening price. News of the Amazon partnership triggered a 10 percent pre-market rally, though shares retreated to less than 2 percent down by publication.
