Google and nuclear start-up Kairos Power will build a 50 megawatt reactor in Tennessee by 2030 in partnership with the Tennessee Valley Authority.
The Hermes 2 project will supply enough electricity for about 36,000 homes, with TVA agreeing to buy the output under a long-term contract. It is the first such deal in the United States involving an advanced reactor design.
Google will use the electricity to help run data centres in Tennessee and Alabama.
The Alphabet Inc-owned (NASDAQ:GOOG) company and Kairos will take on the financial risk of construction while TVA provides the revenue stream. Neither the cost of the plant nor the price of the electricity has been disclosed.
Hermes 2 will use molten salt cooling technology, allowing it to operate at low pressure with potential cost and safety benefits. Kairos hopes the project will become a model for future standardised reactors that can be built at lower cost.