(Reuters) -U.S. utility Talen Energy ( TLN ) announced on Wednesday an expanded nuclear energy partnership with Amazon.com ( AMZN ) to supply up to 1,920 megawatts of electricity from its Susquehanna plant in Pennsylvania to Amazon Web Services (AWS) data centers.

WHY IT'S IMPORTANT

The long-term deal, lasting until 2042, ensures Talen a steady, long-term revenue stream while supporting Amazon's ( AMZN ) growing demand for carbon-free energy to power its AI and cloud operations.

Both companies will also explore building new Small Modular Reactors within Talen's Pennsylvania footprint and pursue expanding the nuclear plant's energy output.

CONTEXT

U.S. electricity demand has risen for the first time in two decades, driven by the rapid growth of data centers and artificial intelligence, prompting Big Tech companies to scramble for reliable energy sources.

Earlier in the month, Constellation Energy ( CEG ) struck an agreement with Meta Platforms ( META ) to keep one of the reactors in Illinois operating for 20 years.

MARKET REACTION

Talen Energy ( TLN ) shares rose nearly 8% in the premarket trading.

KEY QUOTES

"We are making the largest private sector investment in state history - $20 billion- to bring 1,250 high-skilled jobs and economic benefits to the state, while also collaborating with Talen Energy ( TLN ) to help power our infrastructure with carbon-free energy," Kevin Miller, AWS vice president of global data centers, said.