Microsoft has signed a landmark 20-year agreement with Constellation Energy to bring the dormant Three Mile Island nuclear power plant back online.

This move to meet the soaring energy demands of Microsoft’s artificial intelligence (AI) data centers underscores the increasing power requirements needed to fuel the tech giant’s AI-driven operations.

Under the power purchase agreement, if regulators approve, Microsoft will gain exclusive access to 100% of the electricity generated by the plant, which can produce up to 837 megawatts of power. The plant in Pennsylvania was retired in 2019 due to economic challenges. It was also the site of the 1979 nuclear incident, one of the worst in U.S. history, which led to the permanent closure of one of its units.

The plant is expected to reopen in 2028, pending regulatory approvals. It will be renamed the Crane Clean Energy Center in honor of the late Chris Crane, former CEO of Exelon, the parent company of Constellation Energy. The agreement with Microsoft marks the software company’s first significant foray into nuclear energy, highlighting its growing focus on securing sustainable power sources for its expanding infrastructure.

As Microsoft scales up its AI capabilities, the energy demands of its data centers have surged. The company is expanding its facilities across several U.S. states, including Illinois, Virginia, Pennsylvania, and Ohio. This expansion has heightened the need for clean, reliable energy to sustain its operations.

According to Bloomberg, Microsoft’s AI initiatives have already contributed to a noticeable rise in its greenhouse gas emissions, making the shift to nuclear power a crucial component of its carbon reduction strategy.

Microsoft has committed to running its data centers entirely on carbon-free energy by 2025, and the revival of Three Mile Island will play a key role in achieving this goal. The plant’s nuclear power output will provide a steady supply of carbon-free energy, aligning with the company’s sustainability objectives.

Constellation Energy has pledged to invest $1.6 billion in restoring the plant to operational status. However, the deal is contingent on approvals from the U.S. Nuclear Regulatory Commission and state and local authorities. Additionally, Constellation seeks to extend the plant’s operational license, allowing it to run until at least 2054.