Nuclear Startups Surge with Small Reactors Amid Manufacturing Hurdles
The nuclear energy sector is experiencing a significant revival, marked by the refurbishment of aging plants and a surge in investments into innovative startups. In the closing weeks of 2025 alone, these emerging companies secured a remarkable $1.1 billion in funding, driven by investor confidence in the potential of small modular reactors (SMRs) to overcome the challenges that have historically plagued the industry.
The Shift to Small Modular Reactors
Traditional nuclear reactors are colossal infrastructures. For instance, the recently constructed Vogtle 3 and 4 reactors in Georgia each generate over 1 gigawatt of electricity and incorporate tens of thousands of tons of concrete. However, these projects faced significant setbacks, including delays of eight years and budget overruns exceeding $20 billion.
In contrast, the new wave of nuclear startups is focusing on downsizing reactors. By adopting smaller designs, they aim to address both time and cost inefficiencies. The modular nature of SMRs allows for scalable power solutions—additional reactors can be added as needed. Furthermore, these compact reactors can be produced using mass manufacturing techniques, which, over time, are expected to enhance production efficiency and reduce costs.
Manufacturing Challenges in the Nuclear Sector
Despite the promising outlook, manufacturing SMRs presents significant challenges. Drawing parallels to the automotive industry, Tesla’s difficulties in mass-producing the Model 3 highlight the complexities involved, even in a sector where the U.S. has substantial expertise. The nuclear industry, however, lacks such a robust manufacturing foundation.
Milo Werner, a general partner at DCVC with a background in leading new product introductions at Tesla and FitBit, emphasizes the gaps in the U.S. nuclear supply chain. She notes that several critical materials required for nuclear manufacturing are no longer produced domestically, necessitating reliance on foreign sources. This dependency underscores the erosion of manufacturing capabilities in the U.S. over the past four decades, leading to a shortage of experienced personnel in factory construction and operations.
Strategies for Overcoming Manufacturing Hurdles
To navigate these challenges, many nuclear startups are opting to establish their initial manufacturing operations close to their technical teams. This proximity facilitates iterative improvements and accelerates the development process. Werner advocates for a modular approach, allowing companies to commence production at lower volumes, gather valuable data, and demonstrate progress to investors.
However, achieving the cost reductions associated with mass manufacturing is a gradual process, often spanning a decade. Startups must be prepared for this extended timeline and manage investor expectations accordingly.
Recent Developments in the Nuclear Startup Landscape
The renewed interest in nuclear energy has led to significant investments in various startups:
– Antares secured $96 million in Series B funding to advance its R1 microreactor, designed for commercial, defense, and space applications. The R1 utilizes TRISO fuel, comprising carbon- and ceramic-coated uranium spheres embedded in graphite, and aims to produce between 100 kilowatts and 1 megawatt of electricity.
– Radiant Nuclear raised over $300 million to develop a microreactor capable of generating 1 megawatt of electricity. Designed to replace diesel generators at commercial and military sites, Radiant’s reactor is cooled by helium and contains enough TRISO fuel to operate for five years between refueling.
– X-energy completed a $700 million Series D funding round to build the supply chain for its SMRs. With orders for 144 reactors capable of generating 11 gigawatts of electricity, X-energy’s clientele includes major corporations like Amazon, Dow, and Centrica.
– Last Energy closed a $100 million Series C round to advance its 20-megawatt SMRs, designed to power approximately 15,000 homes. The company has agreements to supply reactors to data center developers, reflecting the growing demand for reliable and sustainable energy sources in the tech industry.
– Kairos Power received approval from the U.S. Nuclear Regulatory Commission to construct two test reactors in Oak Ridge, Tennessee. These reactors are part of a broader plan to supply 500 megawatts of electricity to Google’s data centers by 2030.
– Deep Fission went public through a reverse merger, netting $30 million. The company proposes to build small, cylindrical nuclear power plants that are buried one mile underground, aiming to address safety and security concerns associated with traditional reactors.
– Aalo Atomics raised $100 million in a Series B round to develop its first reactor, inspired by the Department of Energy’s Marvel design. The company plans to activate its initial reactor in the summer of 2026 at the Idaho National Laboratory.
The Road Ahead for Nuclear Startups
The resurgence of nuclear startups focusing on SMRs presents a promising avenue for addressing global energy needs. However, these companies must navigate the intricate challenges of manufacturing, supply chain dependencies, and regulatory approvals. Success in this sector will require a strategic approach to production, a commitment to innovation, and the ability to adapt to the evolving energy landscape.
