Nuclear power stocks experienced a significant downturn on Monday after the Federal Energy Regulatory Commission (FERC) rejected a landmark deal that would have allowed a nuclear plant to supply additional electricity to an Amazon data center. The regulatory decision sent shockwaves through the nuclear energy sector, which has been riding high on the AI-driven data center boom.
Talen Energy, the company at the center of the rejected deal, saw its stock drop as much as 8.6% on Monday, triggering a broader selloff across the nuclear power industry. The ripple effects were substantial: Vistra Energy slid 6.7% at intraday lows, while Constellation Energy suffered the steepest decline, tanking 13%. These companies had been among the biggest beneficiaries of surging power demand driven by artificial intelligence data centers.
FERC Commissioner Mark Christie explained the rejection by citing concerns that approving the proposal would create consequences for grid reliability and consumer costs. This decision establishes a regulatory precedent that could significantly impact future nuclear power agreements with tech companies seeking to fuel their AI infrastructure.
The nuclear power sector had been experiencing remarkable growth in 2024, with both Vistra and Constellation ranking among the top S&P 500 performers this year. This success stemmed directly from tech companies’ increasing embrace of nuclear energy as a reliable, carbon-free power source for their energy-intensive AI data centers, which have driven US power demand to unprecedented heights.
Amazon Web Services had already paid Talen Energy $650 million in March for a data center campus adjacent to the Pennsylvania nuclear plant in question, according to Bloomberg. The deal also included a long-term power purchase agreement. In a parallel arrangement, Constellation Energy had secured a 20-year deal with Microsoft to power its data centers.
Talen Energy responded strongly to the regulatory setback, warning in a statement that “FERC’s decision will have a chilling effect on economic development in states such as Pennsylvania, Ohio, and New Jersey.” The broader nuclear sector felt the impact, with emerging players also suffering: Sam Altman-backed Oklo and Nano Nuclear Energy both fell by double-digits on Monday, demonstrating how the regulatory decision affected both established utilities and next-generation nuclear startups.
Key Quotes
approving the proposal would spark consequences for grid reliability and consumer costs
FERC Commissioner Mark Christie provided this rationale for rejecting the Amazon-Talen Energy deal, highlighting regulators’ concerns that prioritizing tech companies’ power needs could negatively impact the broader electrical grid and increase costs for everyday consumers.
FERC’s decision will have a chilling effect on economic development in states such as Pennsylvania, Ohio, and New Jersey
Talen Energy issued this warning in an official statement following the regulatory rejection, arguing that blocking nuclear power deals with data centers will discourage tech investment and economic growth in key industrial states where these facilities would be located.
Our Take
This regulatory setback reveals a fundamental challenge facing the AI industry: the collision between Silicon Valley’s move-fast mentality and the deliberate pace of energy regulation. The nuclear sector’s enthusiasm for AI data center partnerships was justified—these deals promised stable, long-term revenue and renewed relevance for an industry that has struggled for decades. However, FERC’s decision demonstrates that regulators won’t simply rubber-stamp arrangements that could disadvantage ordinary ratepayers or compromise grid stability. The involvement of Sam Altman-backed Oklo in the selloff is particularly noteworthy, as it shows how next-generation nuclear startups are now directly tied to AI’s fortunes. Moving forward, tech companies will need to develop more sophisticated energy strategies that balance their voracious power needs with regulatory realities and public interest concerns. This may accelerate investment in on-site power generation, energy efficiency improvements, or even slow the pace of AI data center construction until energy infrastructure catches up with ambition.
Why This Matters
This regulatory decision represents a critical inflection point for the AI industry’s energy strategy. As artificial intelligence models become more sophisticated and data centers multiply to support growing AI workloads, power consumption has emerged as one of the sector’s most pressing challenges. Tech giants like Amazon, Microsoft, and Google have been racing to secure reliable, clean energy sources, with nuclear power emerging as a preferred solution due to its carbon-free, 24/7 availability.
The FERC’s rejection signals that regulatory hurdles may slow the AI industry’s ambitious expansion plans. Data centers powering AI applications consume enormous amounts of electricity—some facilities require as much power as small cities. Without guaranteed access to dedicated power sources, tech companies may face constraints on where and how quickly they can build new AI infrastructure.
This decision also highlights the tension between private sector innovation and public utility regulation. While tech companies argue that direct power agreements enable faster AI development and economic growth, regulators worry about grid stability and ensuring fair electricity costs for all consumers. The outcome of this debate will shape not only the AI industry’s trajectory but also America’s competitive position in the global AI race, as other nations may offer more favorable regulatory environments for AI infrastructure development.
Recommended Reading
For those interested in learning more about artificial intelligence, machine learning, and effective AI communication, here are some excellent resources: