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BAE Systems lands $1.2B contract for missile-tracking satellite cluster

BAE Systems Inc.’s Space and Mission Systems business has won a $1.2 billion U.S. contract to provide a constellation of missile-tracking , Space Systems Command announced Monday.

Based in , Inc. is the U.S. arm of British giant BAE Systems. Its Space and Mission Systems business is based in Broomfield, Colorado.

Under the contract awarded on May 29, BAE Systems will provide 10 Epoch 2 space vehicles for the Space Force’s Resilient Missile Warning Tracking architecture in Medium Earth Orbit.

Space Force’s Resilient MWT MEO program is focused on acquiring infrared sensing and integrating it into a new satellite constellation in medium Earth orbit. The satellites are designed to detect and track a range of threats, from intercontinental ballistic missile launches to maneuvering hypersonic missiles, according to a news release.

Epoch 2’s primary purpose is delivering resilient global hypersonic missile tracking access. BAE Systems is scheduled to deliver satellites every two years, and the first delivery of Epoch 2 is planned for fiscal 2029.

The Space Force’s MWT program could support President Donald ‘s $175 billion system formalized in an executive order on Jan. 27. In May, Trump announced he had chosen the concept for the program from three options the Department of Defense developed, according to Associated Press reporting.

Trump also tapped Gen. Michael Guetlein, Space Force’s vice chief of space operations, to oversee the system’s development.

Lt. Col. Brandon Castillo, materiel leader in the Epoch 2 program office, said in a statement: “Epoch 2 is in alignment with the chief of space operation’s top priority to provide accurate real-time information to decision-makers. This allows for additional resiliency in the missile warning and tracking satellite architecture.”

Boeing subsidiary Millennium Space Systems and Arlington County-based federal contractor won contracts for Epoch 1 space vehicles in 2021. RTX, which was contracted to build three satellites, was later removed, and instead Millennium received a contract in October 2024 to build six more satellites for a total of 12.

BAE Systems Inc. has about 41,000 employees worldwide and reported $16.85 billion in 2024 sales.

Virginia Congress members press for details on Fort Eustis layoffs

SUMMARY:

  • A bipartisan group of Virginia congressional lawmakers is demanding transparency on the Army’s plan to move Training and Doctrine Command () headquarters from Fort Eustis, Newport News, to Texas.
  • Officials are concerned about potential mass at Newport News base.
  • Merger follows a directive from the Secretary of Defense Pete Hegseth to consolidate commands and cut redundant operations.

A bipartisan group of Virginia congressional officials sent a letter to Secretary of the Army Daniel Driscoll and Army Chief of Staff Gen. Randy George Tuesday seeking more transparency regarding plans to move the (TRADOC) headquarters from Fort Eustis in Newport News to Austin, Texas.

Last month, George told the House Appropriations Defense Subcommittee that TRADOC would be merged with the Army Command (AFC) in Austin to form a new command — the Army Transformation and Training Command.

However, the announcement raised questions about how many military and civilian staff would be impacted and which TRADOC functions would relocate to Austin. Maj. Chris Robinson, a TRADOC spokesperson, said last week that more updates were expected to be revealed in mid-June.

The lack of details prompted Tuesday’s letter from the bipartisan delegation, which includes several representatives, seeking more information on the merger.

The letter stated that, based on discussions with Army senior leaders over the past several weeks, the delegation learned that AFC will retain a four-star general in Austin, but that TRADOC will not retain a four-star general in Fort Eustis. It also said it is unclear how many service members and their families will relocate, what facility impacts will be and whether there would be cost savings from eliminating redundant roles and responsibilities between the two commands.

“We have received a number of troubling updates from other community stakeholders that lead us to believe the impacts on Virginia will be more substantial than the Army has shared with thus far,” the letter states. “We appreciate that analysis is ongoing, but we urgently require clarification.”

The delegation heard that TRADOC’s G-2 section at Fort Eustis, consisting of approximately 250 positions, may be eliminated as part of the consolidation. Delegation members were also told that the Center for Initial Military Training at Fort Eustis may be folded under a staff directorate and that the headquarters staff of the three-star general at Fort Eustis may be reduced to 20 to 25 soldiers, with ongoing general staff reductions projected to be between 20 and 80 personnel.

“We agree that ruthless prioritization is necessary to ‘deliver critical warfighting capabilities, optimize our force structure, and eliminate waste and obsolete programs,’” the letter states. “At the same time, we believe these changes must be made with precision, underpinned by clear analysis, and executed effectively.”

The letter was signed by Republican U.S. Reps. Rob Wittman, Ben Cline, , Jennifer Kiggans and Morgan Griffith; Democratic U.S. Reps. , , Eugene Vindman, Don Beyer and Suhas Subramanyam, as well as Democratic U.S. Sens. Tim Kaine and Mark Warner. The group stated that they wish to receive the complete analysis that led to the proposed merger of TRADOC and AFC.

The delegation also requested an anticipated timeline for the proposed merger, a discussion of any associated risks identified by the Army in completing the analysis and budget and funding information about the merger. They requested the information be received by June 10.

TRADOC, created on July 1, 1973, trains more than 750,000 soldiers and service members annually. Its headquarters have been based at Fort Eustis since 2011. Robinson said the command has more than 35,000 military and civilians worldwide. Of this, approximately 2,000 are based at Fort Eustis, and of those, about 800 personnel are tied to the headquarters component of TRADOC.

The planned merger follows a directive from Secretary of Defense Pete Hegseth to transform and streamline the military and eliminate “wasteful spending.” In an April 30 memo from Hegseth to senior Pentagon leadership, he directed the Secretary of the Army to merge the AFC with TRADOC as a way to “downsize, consolidate, or close redundant headquarters.”

The delegation’s letter says a successful merger of TRADOC and AFC requires “a detailed and viable plan.”

“I am committed to working with Secretary Driscoll and General George to ensure that our Army is lethal, ready and prepared for the next fight,” Wittman said in a statement. “In order to work effectively with Army leaders, we must make sure that we fully understand the analysis effort that supports the changes proposed by the Army Transformation Initiative–in sending this letter, I hope to open a productive dialogue with the Army about how to best achieve the vision set forth in ATI and preserve the critical mission of Army Training and Doctrine Command (TRADOC).”

Robinson said TRADOC had no further updates to provide since last week.

Old Dominion Job Corps to lay off 130 in Amherst

Amherst County-based Old Dominion Center will lay off 130 workers by June 30, due to President Donald ‘s administration ordering the closures of contractor-run Job Corps centers across the nation.

Old Dominion, in compliance with the Worker Adjustment and Retraining Notification (WARN) Act, notified the state Tuesday of plans to lay off the employees due to the of the Job Corps site.

The U.S. announced on May 29 it would begin a phased pause in operations at contractor-operated Job Corps centers nationwide, with all operations closed by June 30. The Job Corps program provides students ages 16-24 with education, vocational training and job placement assistance. Blue Ridge Job Corps Center in Smyth County is also slated for closure.

The Labor Department said the decision followed an internal review of the program’s outcomes and structure and that the closures aligned with Trump’s fiscal 2026 budget proposal. Tens of thousands of federal jobs this year have been cut in an effort by the to slash federal spending.

According to the Labor Department, the Job Corps program faced significant financial challenges and operated at a $140 million deficit for the 2024 program year, with the deficit projected to reach $213 million for 2025.

The Labor Department’s Employment and Training Administration on April 25 released the first-ever Job Corps Transparency Report, which the department says analyzed the financial performance and operational costs of the most recently available metrics of program year 2023. The Labor Department said in a summary of findings from the report that the average graduation rate was 38.6%, the average cost per student per year was about $80,285, the average total cost per graduate was roughly $155,600 and that, post separation, participants earn $16,695 annually on average.

The summary also reported 14,913 serious incident reports for program year 2023, including instances of inappropriate sexual behavior and sexual assaults, acts of violence, breaches of safety or security, reported drug uses and total hospital visits.

Democratic U.S. Sens. Mark. Warner and Tim Kaine last week released a joint statement condemning the closures, saying the move would “abruptly eliminate crucial job training for thousands of young Americans and cut nearly 13,000 jobs across the program’s 99 centers.”

did not immediately return requests for comment.

Fed lifts restrictions placed on Wells Fargo in 2018 because of its fake-accounts scandal

SUMMARY:

  • Fed ends 2018 imposed on .
  • Reform follows years of cultural and compliance overhaul.
  • Wells Fargo can now expand deposits and investment banking.

NEW YORK (AP) — The said Tuesday that Wells Fargo is no longer subject to harsh restraints the Fed placed on the bank in 2018 for having a toxic sales and banking culture.

It’s a win for Wells Fargo, which has spent nearly a decade trying to convince the public and policymakers that it had changed its ways.

“We are a different and far stronger company today because of the work we’ve done,” said Wells Fargo CEO in a statement. Scharf also announced that each of the 215,000 employees at Wells Fargo would receive a $2,000 award for turning the bank around.

Wells Fargo used to have a corporate culture where it placed unreasonable sales goals on its branch employees, which resulted in employees opening up millions of fake accounts in order to meet those goals. Wells’ top executives called its branches “stores” and employees were expected to cross-sell customers into as many banking products as possible, even if the customer did not want or need them.

After an investigation by The Los Angeles Times in 2016, Wells Fargo shut down its sales culture and fired much of its leadership and board of directors. The cost Wells Fargo billions of dollars in fines and lost business, and permanently tarnished its reputation, particularly because the scandal broke only a few years after the Great Recession and financial crisis. It was later revealed that Wells Fargo opened up roughly 3.5 million accounts that were not wanted or needed by customers.

Wells Fargo, once thought to be the best run bank in the country, was now the poster child of the worst practices of banking in decades.

In order to push Wells to fix itself, the Federal Reserve took the unusual step of placing Wells Fargo in a program where the bank could grow no larger than it was in 2018. No bank had previously been placed into such a program, known as an asset cap. The Fed required Wells to fix it culture and redo its entire risk and compliance departments in order to address its problems.

Since taking over in 2019, Scharf’s goal has been to convince the Federal Reserve that Wells Fargo had fixed its toxic banking practices. With the asset cap removed, the bank can now pursue more deposits, new accounts and take on additional investment banking businesses by holding additional securities on its balance shet.

Tysons AI startup raises $10M in seed funding

Tysons , which developed an proposals writing tool, has raised $10 million in a round.

MicroStrategy co-founder Sanju Bansal, members of the Blue Delta Capital Partners team and “other industry leaders” led the round, according to a Monday news release.

The startup developed its generative AI tool in partnership with Shipley Associates, a business development training and consulting company based in Utah. pWin.ai said in a news release its product can improve win rates by up to 20%.

“pWin.ai simplifies RFI and RFP response generation, empowering businesses and government contractors at the federal, state and local level to increase both bid volume and win rates,” pWin.ai co-founder and CEO Vishwas Lele said in a statement. “What sets our enterprise-grade SaaS products apart is our relentless focus on writing quality.”

pWin.ai was founded in 2024. The startup’s clients include large contractors like Parsons and Astrion as well as small and mid-sized companies like CRL Technologies and Applied Information Services. Its tool operates in Azure Commercial and Azure Government environments.

“For us, it has proven to be not just another software product but a strategy amplifier that frees up the team to surface insight faster and deliver on our big growth goals,” Holly Losh Trombly, corporate vice president of proposals at Astrion, said in a statement.

Trump’s promised steel and aluminum tariffs go into effect

SUMMARY:

  • hiked on to 50%.
  • Move expected to impact automakers and home builders.
  • In speech, president said tariff increases would ‘further secure’ U.S. steel industry

NEW YORK (AP) — U.S.  hiked nearly all of his tariffs on steel and aluminum imports to a punishing 50% on Wednesday in a move that’s set to hammer businesses from automakers to home builders, and likely push up prices for consumers even further.

Foreign-made steel and aluminum is used in household products like soup cans and paper clips, as well as big-ticket items like a stainless-steel refrigerators and cars. Economists warn that such heightened levies could significantly squeeze the wallets of both companies and shoppers alike. But Trump argues that his latest import taxes are necessary to protect U.S. industries.

The 50% tariffs went into effect just after the clock struck midnight on Wednesday. The two metals had previously faced 25% tariffs worldwide since mid-March, when Trump’s order to remove steel exemptions and raise aluminum’s levy from his previously-imposed 2018 import taxes went into effect.

Steel and aluminum from the U.K. is the exception. British imports of these metals are still levied at 25%, per a proclamation issued by Trump on Tuesday afternoon, which pointed to a recent trade deal reached between the two countries.

Here’s what else we know.

Why is Trump raising these tariffs?

Trump says it’s all about protecting U.S. industries. He reiterated that argument on Friday, when he first announced the 50% tariff on imported steel during a visit with steelworkers in Pennsylvania, where he also discussed a “planned partnership” between U.S. Steel and Japan’s Nippon Steel.

In his speech at U.S. Steel’s Mon Valley Works–Irvin Plant in suburban Pittsburgh, Trump said that the tariff hike would “further secure the steel industry in the U.S.” Shortly after, he took the same tone when sharing plans to also raise tariffs on imported aluminum.

In Tuesday’s proclamation, Trump also said that the higher tariffs would ensure that imported steel and aluminum would “not threaten to impair the national security.”

“In my judgment, the increased tariffs will more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the United States,” he said in the proclamation.

How is the industry responding?

While some analysts have credited the tariffs Trump imposed during his first term with strengthening domestic production of steel and aluminum, many others have warned that stark new levies can make it difficult for the industry to adjust.

Some organizations representing metal workers also note that tariffs aren’t the only solution needed to boost U.S. manufacturing.

“While tariffs, used strategically, serve as a valuable tool in balancing the scales, it’s essential that we also pursue wider reforms of our global system,” David McCall, international president of the United Steelworkers union said in a statement, noting that work must be done “in collaboration with trusted allies” like Canada — the top exporter of steel and aluminum to the U.S. — to help “contain the bad actors.”

Matt Meenan, vice president of external affairs at the Aluminum Association, added that the trade group “appreciates President Trump’s continued focus on strengthening the U.S. aluminum industry,” but that “tariffs alone will not increase U.S. primary aluminum production.”

“We also need consistent, predictable trade and tariff policy to plan for current and future investment,” Meenan said.

Meanwhile, the American Primary Aluminum Association, which advocates for stronger trade enforcement, applauded Trump’s latest tariff increase on foreign aluminum.

“For decades, subsidized foreign producers have hollowed out domestic aluminum manufacturing,” APAA President Mark Duffy said in a statement, calling Trump a “strong leader who is fighting to rebuild domestic manufacturing and protect thousands of American aluminum jobs.”

What kinds of products could be impacted by heightened steel and aluminum tariffs?

A range of businesses that rely on foreign-made steel and aluminum have already begun feeling the impacts of Trump’s previously-imposed levies. But the latest anticipated hikes could drive up costs even more.

Steel and aluminum are used in a range of products like washing machines, consumer electronics and cars. Much of the auto industry relies on a global supply chain. And even if you aren’t in the market to buy a new vehicle, repairs could involve parts that use imports of either metal, driving up overall maintenance and ownership costs.

Rick Gagliano, president and CEO of AccuTec, a Verona, Virginia-based manufacturer of specialty, medical and professional cutting blades, lamented Wednesday morning that the increase in will force the company to raise its prices for the second time this year.

“100% of our material cost is steel, and if somebody increases the cost … we have no choice but to pass that on,” Gagliano said Monday.

AccuTec requires a high purity steel for its products which, according to Gagliano, U.S. mills don’t want to make. “We have to go to Europe and Japan,” he said.

Even if there was a U.S. mill willing to make the quality steel AccuTec needs, Gagliano said U.S. mills have also announced price increases. “So, there is no relief for us even if there was a viable U.S. option,” he wrote in an email Wednesday.

To weather the storm, AccuTec has put all nonessential spending on hold and has reduced worker hours. The company has 200 employees in Virginia and another 200 in Mexico. “It’s a killer,” Gagliano said. “It gives European and Asian companies a competitive advantage because they don’t have a 25 or 50% tariff on the steel that they use.”

In the grocery aisle, steel and aluminum are ubiquitous in the packaging for many foods, including canned tuna, soup and nuts. Experts warn that hiking import taxes on these materials could led to higher grocery prices overall, further straining consumers wallets.

The aluminum and metal tariffs also carry wider implications for construction and transportation as a whole, as many key building parts and materials are made with these metals. Economists further warn of spillover impacts. Even if a product isn’t directly packaged in steel or aluminum, there could be higher costs to build the shelf it’s sold on, for example, or truck used to transport it to the store. And all of that could trickle down to the consumer down the road.

If foreign competition becomes “priced out” due to these new tariffs, U.S. steel and aluminum producers may also find room to raise their own prices. As a result, even companies that don’t buy these foreign metals could end up paying more.

Steel prices have already climbed 16% since Trump became president in mid-January, according to the government’s Producer Price Index. And as of March 2025, steel cost $984 a metric ton in the U.S., significantly higher than than in Europe ($690) or China ($392), per the U.S. Commerce Department.

Why is the UK excluded from the 50% rates?

As part of trade deal reached on May 8, the U.K. said that the U.S. had agreed to exempt the country from its then-universal 25% duties, which would allow British steel and aluminum to come into the U.S. duty-free. That has yet to happen. But in his proclamation issued Tuesday, Trump acknowledged that it was “necessary and appropriate” to implement the deal.

The duty on British steel and aluminum will now stay at 25% instead of zero. But that rate could go up starting on July 9 if the U.S. government determines that Britain has not held up its end of the bargain, the details of which remain unclear.

British Prime Minister Keir Starmer has said that he is confident a trade deal exempting the U.K. from U.S. metals tariffs entirely will be in force before Trump’s July 9 deadline.

“We are the only country in the world that isn’t paying the 50% tax on steel and that will be coming down,” Starmer told lawmakers in the House of Commons on Wednesday. “We are working on it to bring it down to zero, that is going to happen.”

Gareth Stace, head of the industry body U.K. Steel, added that Trump’s decision to keep tariffs on British steel at 25% was a “welcome pause” but warned that continuing uncertainty was making American customers “dubious over whether they should even risk making U.K. orders.”

Other countries may also seek reprieve — or retaliation.

Late Tuesday, Mexican Secretary of Economy Marcelo Ebrard said that doubling the tariff rate on imported steel and aluminum “it is unfair and unsustainable” because it will damage both countries’ economies. Ebrard added that he will be in Washington on Friday to meet with top U.S. officials and plans to present Mexico’s arguments “to be excluded from this measure, because it does not make sense.”

Meanwhile, the European Union has outlined countermeasures in response to levies imposed on aluminum and steel earlier in the year. The 27-nation bloc later delayed those actions until July 14 in efforts to ease negotiations, but recently said that was preparing a list of measures to enact if a trade deal with the U.S. crumbles.

Virginia Business Associate Editor Beth JoJack contributed to this story.

Wall Street’s rally slows following discouraging updates on economy

SUMMARY:

  • U.S. climbed slightly ahead of new steel .
  • EU and U.S. trade officials meet in Paris for tariff negotiations.
  • shares jumped 2.5% after Fed lifted 2018 restrictions.

NEW YORK (AP) — Wall Street’s big rally is easing off the accelerator on Wednesday following some potentially discouraging updates on the U.S. economy.

The was edging up by 0.1% in morning after it had rallied back within 2.8% of its all-time high the prior day. The Industrial Average was up 33 points, or 0.1%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.1% higher.

The action was stronger in the bond market, where Treasury yields fell following a pair of weaker-than-expected reports on the economy. One said that U.S. retailers, finance companies and other businesses in the services industries saw activity contract last month, when economists were expecting to see growth. Businesses told the Institute for Supply Management in its survey that all the uncertainty created by tariffs is making it difficult for them to forecast and plan.

A second report, meanwhile, suggested U.S. employers outside of the government hired far fewer workers last month than economists expected. The report from ADP said private employers hired just 37,000 more workers than they fired, down from the prior month’s 60,000.

That could bode ill for Friday’s more comprehensive jobs report coming from the U.S. Labor Department, which is one of Wall Street’s most anticipated data releases each month. So far, the U.S. job market has remained remarkably resilient despite years of high and now the threat of President Donald Trump’s high tariffs. But weakness there could undermine the rest of the economy.

To be sure, ADP’s report historically has not been a perfect predictor of what the U.S. Labor Department’s report will say.

“Whether this report is accurate or not, traders and investors will read today’s number as a dark result for trading today,” according to Carl Weinberg, chief economist at High Frequency Economics. “This may be the tip of an iceberg, but it also could be a false start.”

Following the reports, traders built up expectations that the Federal Reserve will need to cut interest rates later this year in order to prop up the economy, which in turn caused the fall for Treasury yields. The weaker-than-expected ADP report also pushed Trump to call on Fed Chair Jerome Powell to deliver cuts to rates more quickly.

“‘Too Late’ Powell must now LOWER THE RATE,” Trump said on his Truth Social platform. “He is unbelievable!!! Europe has lowered NINE TIMES!”

The Fed has yet to cut interest rates this year after slashing them through the end of last year. Part of the reason is that the Fed wants to see how much Trump’s tariffs will hurt the economy and raise inflation. While lower interest rates could boost the economy, they could also give inflation more fuel.

Longer-term Treasury yields have also been rising in recent weeks because of reasons outside the Fed’s control. Investors have been demanding the U.S. government pay more in interest to borrow because of worries about whether it’s set to add trillions of dollars to its debt through tax cuts under discussion on Capitol Hill.

On Wall Street, Wells Fargo rose 1.7% after the on Tuesday lifted restrictions placed on the bank in 2018 for having a toxic sales and banking culture. Wells Fargo has spent the better part of a decade trying to restore its image with the public and convince policymakers that it had changed its ways.

, the cybersecurity company that Delta Air Lines has sued for a technology outage last summer, fell 5.3% despite reporting a stronger profit for the latest quarter than analysts expected. Its revenue fell just short of Wall Street’s target, as did its forecast for revenue in the current quarter.

In stock markets abroad, indexes rose across much of Europe and Asia as the wait continued for more updates on trade talks that could convince Trump to lower his tariffs. Hopes for such deals have been a big reason U.S. stocks have roared back after falling roughly 20% below their record two months ago.

But nothing is assured, and Trump early Wednesday said of China’s leader Xi Jinping, “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”

The European Union’s top trade negotiator, Maroš Šefčovič, met Wednesday with his American counterpart, U.S. Trade Representative Jamieson Greer, on the sidelines of a meeting of the Organisation for Economic Cooperation and Development.

South Korea’s Kospi led Wednesday’s global market gains and jumped 2.7% after the liberal opposition candidate Lee Jae-myung was elected president.

Lee’s victory caps months of political turmoil triggered by the stunning but brief imposition of martial law by the now-ousted conservative leader Yoon Suk Yeol. Top priorities will include government spending and trade negotiations with the United States.

In the bond market, the yield on the 10-year Treasury fell to 4.38% from 4.46% late Tuesday. The two-year Treasury yield, which more closely tracks traders’ expectations for what the Fed will do with overnight interest rates, eased to 3.89% from 3.96%.

RTX subsidiary wins $536M Navy contract

The has awarded , a subsidiary of -based aerospace and contractor , a $536 million contract for the SPY-6 family of radars.

RTX said in a news release Tuesday that the contract is a follow-on to a previously awarded integration and production support contract announced in 2018. The new contract includes upgrading Flight IIA destroyers, part of the Arleigh Burke class of guided-missile destroyers, with the SPY-6(V)4 variant.

The SPY-6 family of radars performs air and on seven classes of ships, according to RTX. Some of the advantages over legacy radars, according to RTX, include greater detection range, increased sensitivity and more accurate discrimination.

The SPY-6(V)4 variant can simultaneously defend against ballistic missiles, hypersonic missiles, cruise missiles, anti-surface and anti-air threats, jamming/clutter and electronic warfare.

Under the contract, Raytheon will provide support through training, engineering services, ship installation, integration and testing and software upgrades. Work is expected to be completed by May 2026.

“SPY-6 is the most advanced in the U.S. naval fleet, providing ships a new level of defense against evolving threats,” Barbara Borgonovi, president of naval power at Raytheon, said in a statement. “This contract highlights the essential role of this in supporting the U.S. Navy’s technology roadmap for several decades to come.”

SPY-6 is installed on two new U.S. Navy ships, according to RTX, with three additional ships slated for installation and undergoing various stages of testing later this year. According to a news release, over the next decade, SPY-6 is expected to be deployed on more than 60 U.S. Navy ships.

RTX has more than 185,000 employees globally and reported more than $80.73 billion in 2024 sales. The contractor is Virginia’s second-highest ranked company on the 2025 Fortune 500.

Meta’s nuclear deal signals AI’s growing energy needs

SUMMARY:

  • signs 20-year nuclear power deal with
  • Follows similar energy moves by Amazon, , and Microsoft
  • ‘s rapid growth strains tech firms’ plans
  • Fossil fuel use remains high despite climate-friendly goals

Meta’s deal to help revive an Illinois nuclear power plant was one way of signaling that the parent company of Facebook and Instagram is preparing for a future built with .

Meta’s 20-year deal with Constellation Energy follows similar maneuvers from Amazon, Google and Microsoft, but it will take years before can meet the ‘s insatiable demand for new sources of electricity.

In October 2024, Amazon and Dominion Energy Virginia entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Plant in Louisa County. Amazon also announced then it had signed three agreements to support SMR development, including an agreement in the state of Washington with Energy Northwest to develop four advanced SMRs. In March 2024, Amazon acquired a nuclear-powered data center campus in Pennsylvania from Talen Energy.

Meanwhile, Google announced last October that it had reached an agreement with Kairos Power to develop and purchase 500 megawatts of power from six to seven SMRs, planned to come online between 2030 and 2035. And in September 2024, Microsoft forged a deal with Constellation Energy to offset power consumption by its data centers by reviving a portion of the Three Mile Island power plant, the Pennsylvania facility that in 1979 experienced a partial nuclear meltdown, the worst nuclear disaster in U.S. history.

AI uses vast amounts of energy, much of which comes from burning fossil fuels, which causes climate change. The unexpected popularity of generative AI products over the past few years has disrupted many tech companies’ carefully laid plans to supply their with energy sources that don’t contribute to climate change.

Even as Meta anticipates more nuclear in the future, its more immediate plans rely on natural gas. Entergy, one of the nation’s largest utility providers, has been fast-tracking plans to build gas-fired power plants in Louisiana to prepare for a massive Meta data center complex.

Is the U.S. ready for nuclear-powered AI?
France has touted its ample nuclear power — which produces about 75% of the nation’s electricity, the highest level in the world — as a key element in its pitch to be an AI leader. Hosting an AI summit in Paris earlier this year, French President Emmanuel Macron cited ‘s “drill baby drill” slogan and offered another: “Here there’s no need to drill, it’s just plug baby plug.”

In the U.S., however, most of the electricity consumed by data centers relies on fossil fuels — burning natural gas and sometimes coal — according to an April report from the International Energy Agency. As AI demand rises, the main source of new supply over the coming years is expected to be from gas-fired plants, a cheap and reliable source of power but one that produces planet-warming emissions.

Renewable energy sources such as solar and wind account for about 24% of data center power in the U.S., while nuclear comprises about 15%, according to the IEA. It will take years before enough climate-friendlier power sources, including nuclear, could start slowing the expansion of fossil fuel power generation.

A report released by the U.S. Department of Energy late last year estimated that the electricity needed for data centers in the U.S. tripled over the past decade and is projected to double or triple again by 2028 when it could consume up to 12% of the nation’s electricity.

Why does AI need so much energy?
It takes a lot of computing power to make an AI chatbot and the systems they’re built on, such as Meta’s Llama. It starts with a process called training or pretraining — the “P” in ChatGPT — that involves AI systems “learning” from the patterns of huge troves of data. To do that, they need specialized computer chips — usually graphics processors, or GPUs — that can run many calculations at a time on a network of devices in communication with each other.

Once trained, a generative AI tool still needs electricity to do the work, such as when you ask a chatbot to compose a document or generate an image. That process is called inferencing. A trained AI model must take in new information and make inferences from what it already knows to produce a response.

All of that computing takes a lot of electricity and generates a lot of heat. To keep it cool enough to work properly, data centers need air conditioning. That can require even more electricity, so most data center operators look for other cooling techniques that usually involve pumping in water.

Tysons Corner Center unveils plans for $100M redevelopment

Major changes are on the horizon for Corner Center — the largest shopping mall in the Washington, D.C., area.

In a May presentation to investors, California-based investment trust , the owner of the 1.8 million-square-foot mall in , announced plans for a “strategic redevelopment” of the mall to drive net operating income growth. The company calls for “reimagining the shopper experience” at the west end of the mall, from the Bloomingdale’s to the Macy’s, into “a vibrant and walkable , dining and entertainment district, anchored by upscale dining and a luxury market.”

Macerich says it is in the process of investing $100 million in enhancements to the mall, including $66 million in retailer investments for store upgrades and new designs, including a redesigned Apple store. Apple’s first retail store completed a relocation and at in 2023.

In addition to the retailer investments, Macerich says it is adding $45 million in mall improvements.

However, the upgrades may result in the removal or relocation of the . A rendering in the investor presentation shows the exterior of the American Girl store’s existing space in the mall being labeled as “Before.” A rendering labeled “West End Future” shows the exact same space, redeveloped with new dining options, but with the removal of the American Girl store. In its place, the word “Market” appears where the American Girl logo used to be.

American Girl opened the two-level, 23,000-foot-store at the mall in 2011. The Tysons location is one of seven American Girl stores in the country.

A Macerich spokesperson declined to provide additional information beyond what was already shared in the investor presentation. American Girl did not return requests for comment.

Tysons Corner Center opened in 1968 and today has more than 300 retailers. Macerich has owned it since 2005.

Macerich reported a net loss of $197 million in 2024, of which $194 million was attributable to the company. This was an improvement the previous year’s net loss of $278 million, of which $274 million was attributable to the company.