Meta Platforms (META -0.54%) is building artificial intelligence (AI) technologies that have the power to transform the global economy. This powerful technology requires a tremendous amount of energy to thrive. Some AI data centers use more electricity than an entire city.

That’s leading Meta Platforms to ensure it has the energy it needs to run its cloud and AI operations by signing power purchase agreements (PPAs) with major clean energy producers. It recently inked a 20-year deal with Constellation Energy (CEG -0.13%) for all the power produced at its Clinton Clean Energy Center in Illinois. That agreement will provide Meta with more clean power for its data centers, while further enhancing Constellation Energy’s long-term growth profile.

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Plugging into nuclear power

Meta Platforms is signing a 20-year PPA for the entire output of Constellation’s Clinton Clean Energy Center — 1,121 megawatts (MW). The deal begins in June 2027 and will support the relicensing of this nuclear energy facility. The agreement will also enable Constellation Energy to expand this facility’s output by 30 MW through plant uprates (regulatory approval to operate safely at a higher power level).

This deal supplies Meta Platforms with clean and reliable energy to help meet its growing power needs for the next 20 years. The agreement will provide the technology giant with a significant amount of electricity (the plant can support the energy needs of more than 800,000 homes). Further, it helps the company deliver on its objective of powering 100% of its operations with clean power.

Meanwhile, unlike renewable energy, which is intermittent due to variations in wind speed and sunlight, nuclear power is an always-on power source that produces at a steady rate 24 hours a day, seven days a week, 365 days a year. That’s crucial for data centers, which require a stable source of power.

Meta’s deal with Constellation Energy likely won’t be its last nuclear power deal. The company wrote in a blog post that it’s in final discussions with a short list of other potential projects to meet its goal of securing an additional 1 to 4 gigawatts (GW) of power from next-generation and advanced energy technologies, including geothermal and nuclear.

Enhancing and extending its growth outlook

Despite being one of the country’s highest-performing nuclear power plants, the Clinton Clean Energy Center has been at risk of being shut down. Constellation Energy nearly closed the plant in 2017 after years of financial losses because nuclear power couldn’t compete with cheaper natural gas-fired power.

However, the Future Energy Jobs Act prevented the plant’s premature closure by establishing the Zero Emissions Credit Program, which provides financial support for the facility through the middle of 2027. Meta’s agreement to buy all the power produced from that plant will extend its economic life for another two decades.

This deal is the second one by a technology giant to support one of Constellation Energy’s nuclear power plants. Last year, Microsoft (MSFT 0.28%) signed a 20-year PPA for 100% of the capacity of the company’s Crane Clean Energy Center (845 MW).

Constellation had previously shut down that facility in 2019 due to economic reasons. However, it’s in the process of restarting the facility, which it expects to bring back online in 2028. Microsoft is reportedly paying a premium price for the power produced at this facility to support the voracious energy needs of its cloud and AI operations.

Growing demand for nuclear energy from technology companies is helping power a surge in Constellation Energy’s earnings. The power producer expects to grow its adjusted operating earnings at a more than 13% compound annual rate through 2030.

That outlook doesn’t include the potential impact of its pending acquisition of Calpine, a leading natural gas and geothermal energy producer. That deal could boost its earnings by 20% next year while further enhancing its growth rate by providing opportunities to secure higher-rate gas and geothermal PPAs with technology companies to provide for their growing energy needs.

Nuclear energy is helping power the AI revolution

AI is a game-changing technology that could significantly increase productivity. It will require a massive amount of power to thrive, which is leading Meta to partner with power producers like Constellation Energy to meet its growing energy needs. That’s helping power an earnings surge for the energy company. It makes Constellation Energy an interesting way to invest in the AI megatrend alongside companies like Meta and Microsoft.