Google Secures Long-Term Power Deal for AI Ambitions

Google has made a significant move in its quest to fuel its artificial intelligence (AI) ambitions. The company will invest $15 billion in AI infrastructure, with a major portion of that going towards securing a long-term deal for power from Finland's Loviisa nuclear plant.

The agreement, which was first detailed by the Wall Street Journal, sees Google purchase half the output from Fortum's Loviisa station. Deliveries will begin at the end of this decade and continue through 2049. This fixed-price electricity contract is expected to structurally lower Alphabet's cost per unit of AI compute.

The deal pairs well with Finland's cold climate, which reduces cooling costs for data centers. Google Cloud grew 82% in Q2, with a backlog of nearly $460 billion. The company's spending on AI infrastructure is redefining its business capabilities, according to Sundar Pichai.

However, the timing mismatch means that Alphabet's power bill won't decrease in 2026 or 2027. Free cash flow was negative $5.86 billion in Q2, and long-term debt climbed from $46.5 billion to $98.2 billion. Peers can pursue similar contracts, and Microsoft, Amazon, and Meta already have European nuclear offtakes.