Developers of small modular nuclear reactors (SMRs) have successfully gathered at least $1.5 billion in funding over the last year. This increasing interest among investors is closely tied to power supply agreements made with major technology companies.
In addition to private funding, these developers have received significant support from governments worldwide, as many look to launch new technologies essential for advancing artificial intelligence.
X-energy, a US-based company, recently completed the largest funding round, raising $700 million with participation from major players such as Amazon and other institutional investors. Meanwhile, Newcleo in Paris secured $151 million recently, while Blue Energy and Last Energy, both from the US, raised $45 million and $40 million over the past year, respectively. Nano Nuclear Energy, known for its microreactors, has raised $134 million this fiscal year.
According to an analysis of public records and financial data, three SMR companies listed in New York—Oklo, NuScale, and Nano Nuclear—have raised over $700 million through various financial channels in the past year. Major companies like Westinghouse, Rolls-Royce, and Bill Gates’ TerraPower are also heavily investing in around 60 SMR projects globally.
Recent moves by tech giants notably influenced the investment landscape; for example, Amazon invested in X-energy and Google signed a power supply deal with Kairos Power. These actions have revitalized a funding market that had been struggling due to high interest rates and inflation challenges in 2023.
Following these agreements, the stock prices of companies like Oklo and NuScale surged, enhancing their combined market value by nearly $8 billion, which has attracted new venture capital opportunities for SMR developers.
Core Power, based in the UK, is nearing completion of a $500 million fundraising round focused on the shipping industry. Holtec International, one of the competitors in a UK government SMR development project, is seeking additional funding options.
“There has been a significant shift in how investors view companies like ours,” stated Clay Sell, CEO of X-energy, noting that the tech industry recognizes the vital role nuclear energy plays in delivering dependable and clean power.
The rapidly increasing demand for electricity in the US, partly driven by new AI data centers, has led some tech firms to cover part of the costs associated with deploying nuclear energy. For example, Microsoft entered a long-term power agreement with Constellation Energy to revive the Three Mile Island nuclear facility in Pennsylvania, emphasizing its role in meeting climate goals.
However, only a handful of US nuclear plants can be restarted, and building traditional nuclear reactors has been deemed risky due to past delays and budget overruns. Consequently, the tech sector is focusing on SMRs, which are advanced nuclear reactors with a capacity of 300 MW or less, about one-third the size of conventional reactors.
Oklo, chaired by OpenAI’s Sam Altman, recently signed an agreement with Switch Inc., a large data center operator, to develop reactors with a combined capacity that could power 7.6 million households in New York state. Additionally, Meta is reviewing proposals from SMR developers to supply up to 4 gigawatts of power to support its data centers in the early 2030s.
Despite positive investor sentiment, analysts caution that developers still face challenges, including technical, regulatory, and funding risks. Notably, among SMR developers, only NuScale has received design approval from the US Nuclear Regulatory Commission. TerraPower is in the process of applying for a construction permit, while many others have yet to begin this crucial step.
Developers are eager for tech companies to move beyond preliminary agreements to binding contracts that provide financial certainty. “To see more SMR projects come to life, we need commitments beyond MOUs,” emphasized Marc Bianchi, an analyst at TD Cowen.
Government support is crucial for developers facing the inherent risks of pioneering technologies and the history of delays and financial overruns in nuclear projects. “Federal funding is absolutely essential,” stated Caroline Golin, Google’s energy market development head, during a recent conference.
In the US, the Biden administration has played a vital role by pledging billions in grants to X-energy, TerraPower, and others while also offering significant tax credits to encourage SMR deployment. However, concerns remain as former President Trump seeks to repeal supportive legislation and has suspended loans to the clean energy sector.
On the bright side, Chris Wright, the new energy secretary who previously served on Oklo’s board, along with the Republican party’s strong backing for nuclear energy, has left the industry hopeful for continued federal support.
“We remain optimistic,” Sell from X-energy shared. “The president has spoken about the critical role of nuclear in achieving energy independence, a vision we fully support.”