American Electric Power (NASDAQ: AEP) is exploring a 960-megawatt (MW) nuclear power project in Indiana with Amazon (NASDAQ: AMZN) and advanced reactor developer X-energy (NASDAQ: XE). The proposed facility could help meet rising electricity demand from data centers and other energy-intensive industries while adding carbon-free power to the regional grid.
Announced on October 19, 2026, the project would use small modular reactors (SMRs) at the former Breed Generating Station site in Sullivan County. Amazon will support development funding and intends to purchase electricity under a long-term contract if the project advances.
The partnership highlights growing interest in nuclear energy as U.S. electricity demand increases. However, the project remains in the feasibility stage, and the companies have not made a final investment decision.
AEP Plans 960 MW of Advanced Nuclear Capacity
The proposed facility would include 12 Xe-100 reactors developed by X-energy. Each reactor would generate 80 MW, bringing the project’s planned capacity to 960 MW.
The companies are evaluating the former site of Indiana Michigan Power’s Breed Generating Station, a retired coal-fired power plant. The location could support a new generation project while creating economic opportunities in Sullivan County.
The partnership combines AEP’s power generation and nuclear operating expertise with X-energy’s reactor technology and Amazon’s financial support and planned electricity purchases.
Bill Fehrman, AEP chairman, president and chief executive officer, said:
“Advanced nuclear energy has the potential to provide dependable power for over half a century while supporting economic growth in our communities. With this development plan, we are working to bring together the resources to help meet unprecedented growth in energy demand with reliable baseload power while protecting affordability for existing customers,” said “Our agreements with Amazon and X-energy will provide all necessary capital protections and financial safeguards that we have said are essential for any potential nuclear project to move forward.”
Amazon’s Long-Term Power Deal Could Protect AEP Customers
Amazon intends to buy power through a long-term agreement designed to cover the facility’s construction and operating costs for the contract period. This arrangement could give the project a more predictable revenue stream while helping protect AEP’s existing customers from its financial risks.
AEP has emphasized that any potential nuclear development must include appropriate capital protections and financial safeguards. The companies must assess feasibility, costs, and other development requirements before deciding whether to proceed with construction.
If completed, the facility could operate for more than 60 years, creating jobs, expanding the local tax base and strengthening Indiana’s electricity infrastructure.
Josh Weissman, VP of Data Center Infrastructure Capacity Delivery at Amazon, said:
“At Amazon, we are committed to serving the needs of our customers and achieving our Climate Pledge goal to be net-zero carbon across our operations by 2040. This collaboration with AEP and X-energy would enable us to make progress on both while ensuring that Indiana’s communities benefit. Together, we’re looking to develop nearly a gigawatt of carbon-free power for the regional grid and pay our full costs without passing them to others. This project would also create jobs and generate tax revenues to benefit Hoosier communities for decades to come.”
Amazon’s Growing Investment in Nuclear Power
Amazon’s involvement reflects the growing need for dependable electricity to support cloud computing and artificial intelligence (AI).
Data centers require substantial amounts of electricity to run servers, cooling systems, and networking equipment. As technology companies expand AI services, securing reliable power has become an increasingly important part of their growth strategies.
Nuclear power can generate electricity around the clock without direct carbon dioxide emissions during operation. It can therefore help meet continuous electricity demand while supporting corporate decarbonization goals.
Amazon aims to reach net-zero carbon emissions across its operations by 2040. The proposed Indiana facility could support that objective while supplying electricity to the wider regional grid.
- The project also fits into Amazon’s broader collaboration with X-energy to deploy more than 5 gigawatts (GW) of new nuclear capacity in the United States by 2039.
However, the Indiana development remains subject to feasibility assessments, regulatory requirements, financing and construction decisions.
For Amazon investors, the potential benefit lies in securing long-term electricity supplies for its expanding cloud and AI infrastructure. The proposed facility could also support its efforts to reduce operational emissions. Neither benefit is guaranteed at this stage, as the project has yet to move into construction.
U.S. Nuclear Power Capacity Reaches Nearly 98.4 GW
The United States operates the world’s largest commercial nuclear power fleet. According to the U.S. Energy Information Administration (EIA), the country had 94 operating commercial nuclear reactors at 54 power plants across 28 states as of March 2026. Their combined net summer generating capacity was approximately 98.4 GW.
Nuclear energy remains an important part of the country’s electricity mix. The EIA reported that nuclear power supplied about 18% of U.S. utility-scale electricity generation in 2025. Its September 2026 outlook also projected nuclear power’s share would remain around 18% in 2026 and 2027.
Electricity demand is rising as data centers and industrial facilities expand. The EIA also reported that total U.S. electricity generation reached a record 4,429 billion kilowatt-hours in 2025, up 2.8% from 2024. It expects generation to continue growing in 2026 and 2027.
The proposed Indiana project would add 0.96 GW of capacity, equivalent to roughly 1% of the existing U.S. nuclear fleet’s net summer capacity. Although relatively small compared with the national fleet, the project could contribute to efforts to expand dependable, low-carbon electricity supplies.
Small Modular Reactors Could Support Future Growth
Traditional nuclear power plants typically use large reactors, while SMRs are designed around smaller individual units that can be deployed together. The proposed Indiana facility would group its 12 reactors into sets of four.
This approach could offer flexibility when adding generating capacity, but SMRs still face challenges involving licensing, construction costs, financing and commercial deployment. The Indiana project must overcome these hurdles before it can supply electricity.
The broader nuclear industry is also exploring ways to increase output by extending existing plants’ operating lives, restarting retired reactors and developing new facilities. These options could help utilities respond to rising demand while reducing reliance on fossil-fuel generation.
What the Nuclear Project Means for AEP Stock
For AEP, the agreement offers an opportunity to evaluate additional generation capacity as electricity demand grows. The company plans to invest $78 billion from 2026 through 2030 to improve its electricity infrastructure and support customer needs.
Amazon’s proposed long-term power purchase could strengthen the project’s commercial case. Its development funding and planned electricity purchases are intended to help protect AEP customers from project costs.
However, investors should distinguish between a development agreement and an operating power plant. The proposed facility will not immediately add to AEP’s generating capacity or earnings. Its eventual financial impact will depend on construction costs, contract terms, regulatory approvals, and operating performance.
For Amazon, the project could provide a long-term source of reliable electricity for data centers while supporting its climate ambitions.
The partnership illustrates how utilities and technology companies are exploring nuclear energy to meet growing power needs. Its progress will depend on whether the partners can turn the development agreement into a technically feasible and commercially viable project.