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Amazon has announced a USD 20 billion investment in two major data centre complexes in Pennsylvania one in Fairless Hills and another near the Susquehanna nuclear power plant. This project marks the state's largest private-sector investment, with Pennsylvania's administration offering incentives, including sales tax exemptions and workforce training funds. The deal includes a controversial power supply arrangement that has drawn the attention of federal regulators. As Amazon accelerates its infrastructure expansion to support artificial intelligence services, this development aligns with similar recent billion-dollar commitments in other U.S. states.
Amazon has unveiled plans to invest USD 20 billion into two new data centre complexes in Pennsylvania, significantly expanding its footprint in the state. One of the centres is being developed in close proximity to the Susquehanna nuclear power plant in northeastern Pennsylvania, where it intends to source its electricity directly. The second facility will rise in Fairless Hills, located on the site of the former US Steel mill, now transformed into the Keystone Trade Centre logistics campus. This centre will be powered through the standard electricity grid. Advertisement
Kevin Miller, vice-president of global data centres at Amazon Web Services (AWS), informed The Associated Press that these projects are key components of Amazon's growing cloud infrastructure. In a public address held near the Berwick-based Susquehanna plant, Governor Josh Shapiro described the development as the largest-ever private sector investment in the state's history. He mentioned that this was only the beginning, revealing that his administration is collaborating with Amazon on additional data centre ventures across Pennsylvania.
While some critics argue that data centres do not generate long-term employment at scale, proponents highlight their substantial contributions during the construction phase and the economic ripple effect through local vendor spending and tax revenue generation. Governor Shapiro emphasised the significant job opportunities for construction workers, future technology roles for regional graduates, and considerable increases in property tax contributions to support local schools and government bodies.
The state is expected to offer incentives potentially worth tens of millions of dollars' a common practice as states vie for the economic gains such projects can bring. The administration confirmed that a sum of USD 10 million would be allocated to skill development programmes, to be conducted at educational institutions, community colleges, and union halls, aimed at meeting the employment demands of Amazon's data centres.
Amazon will also benefit from Pennsylvania's existing sales tax exemption on data centre hardware purchases, including servers and routers' a critical factor for states competing to host large-scale digital infrastructure investments.
This announcement adds to an ongoing wave of data centre investments across the United States by Big Tech firms. Since the start of the year, Amazon has committed around USD 10 billion each to data centre projects in Mississippi, Indiana, Ohio, and North Carolina. These moves are driven by the soaring demand for cloud services and artificial intelligence solutions, which require significant computing power and energy-intensive infrastructure.
The Susquehanna plant's majority owner, Talen Energy, had previously sold its adjacent data centre and surrounding land to Amazon for USD 650 million. The deal includes plans for Amazon to construct a new, larger facility that would eventually draw 960 megawatts of electricity-equivalent to 40% of the plant's output and enough to power over half a million homes.
This electricity arrangement, known as a 'behind-the-meter' setup, allows Amazon to tap directly into the power plant. However, this strategy has come under federal scrutiny. The Federal Energy Regulatory Commission (FERC) has intervened procedurally, marking the first time such a case has been reviewed by the agency. The timeline for FERC's decision remains uncertain.
Direct connections to power plants are attractive for tech companies as they significantly reduce the time required to get a facility online, bypassing the often-congested public electricity grid. Nonetheless, concerns have been raised over the fairness of allowing large corporations to sidestep grid improvement fees and the potential impact on broader power availability.
Notably, Amazon is not alone in exploring nuclear-powered data infrastructure in Pennsylvania. Microsoft has entered into a 20-year agreement to potentially reactivate a reactor at the decommissioned Three Mile Island nuclear plant to supply power to its data centres in four states. Additionally, a former coal-fired power plant in the state is set to be converted into a USD 10 billion natural gas-fuelled data centre campus.
As Pennsylvania positions itself to attract similar high-tech developments, the balancing act between economic gain and equitable power distribution will likely remain a focal point. The state's proactive approach, including workforce development and tax incentives, indicates its readiness to lead in a fiercely competitive data economy.
Source - PTI
5th Jun, 2025
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