As competition for artificial intelligence (AI) development between global big tech intensifies, sec..

As competition for artificial intelligence (AI) development between global big tech intensifies, securing power to operate AI data centers has emerged as a key task. Thanks to this, Constellation Energy (CEG), the largest U.S. nuclear power plant operator, has recently shown a sharp rise and attracted attention.

Constellation Energy shares closed at $298.07 on the New York Stock Exchange on the 9th, according to Investing. It is up 18.9% from July 9 ($250.74), three months ago.

Earlier on the 6th, the closing price was $300.40, soaring 12.25% from the previous day. This is due to the fact that it has signed an ultra-large power supply contract worth a total of 3,590 megawatts (MW) with Alphabet, Google's parent company.

The two companies agreed to sign a long-term power purchase contract (PPA) over the next 20 years and supply 890MW of electricity, or a quarter of it. Specifically, it was decided to expand power generation capacity by improving the facilities of 11 existing nuclear power plants located in Illinois, Pennsylvania, and New Jersey. To this end, Constellation Energy invests more than $4.3 billion.

In addition, it also signed a contract to supply additional 2,700MW to Google from existing power generation facilities over the next 15 years.

With this contract, the two companies agreed to form a five-year technology alliance and an "AI alliance" that applies Google Cloud and Gemini Enterprises to the operation of Constellation Energy power plants.

According to Bloomberg, the two companies' power supply contracts are reported to be worth about $1 billion.

Constellation Energy, headquartered in Baltimore, USA, generates electricity through hydro, wind, and solar power, starting with nuclear power, and sells it to companies and individuals. Currently, it supplies energy to three-quarters of Fortune 100 companies in the United States, as well as is responsible for about 10% of the total U.S. clean energy production as a single company.

Even before this contract with Google, Constellation Energy has developed its presence as a key player in the AI industry ecosystem by signing power supply contracts with other big tech companies one after another.

In September, it decided to supply a total of 690 MW of electricity for 20 years, including 190 MW increase in power generation capacity at Amazon and Maryland nuclear power plants, and before that, it signed similar long-term contracts with Meta and Microsoft (MS).

It has attracted all major big tech that operates AI data centers to customers at the forefront of the AI technology war.

In particular, Microsoft decided to restart the Three Mile Island nuclear power plant No. 1, which was closed in 2019 due to low economic feasibility, to secure 835 MW of electricity from next year.

The importance of power, especially power produced by nuclear power plants, in AI technology competition has grown exponentially as the direction of AI model development has evolved from learning to reasoning, and AI utilization strategies have evolved from simple questions and answers to agents who take care of actual tasks.

According to Morgan Stanley, up to 34% of the power needed by U.S. data center developers is expected to be insufficient by 2028. In this situation, nuclear power is attracting attention as the best power source in the AI era in that it can supply power stably 24 hours a day without carbon emissions.

Thanks to this, Constellation Energy sales in the second quarter were $7.54 billion, up 23% from the same period last year. Due to a series of additional contracts, the company's target price for the next 12 months is $341.53, which is 14% higher than the current price.