The artificial intelligence boom is supercharging the development of next-generation nuclear energy technology in the United States. Big Tech and private equity are catalyzing the research and development of cutting-edge approaches to round-the-clock clean energy production as hyperscalers add power-hungry data centers to the grid at a blistering rate.

The scale of that demand is difficult to overstate. “A single hyperscale data center can consume as much electricity as 50,000 homes,” the MIT Energy Initiative writes. “U.S. data centers consumed more than 4% of the country’s total electricity in 2023, and by 2030 that fraction could rise to 9%,” MIT goes on to warn.

In other words, the expansion of data centers to fuel the integration of AI into everything from email providers to electric toothbrushes is fundamentally changing the way energy is consumed — and therefore the way it is produced — in the United States and beyond. That has sharpened attention on technologies that can provide large amounts of electricity continuously, while also keeping climate goals in view.

As a result, venture capital funding is surging for both nuclear fusion and fission startups. According to a recent report from Axios, global investment in both fission and fusion has topped USD $4.5 billion across 81 companies in 2026 so far. At this rate, projections show that 2026 will shatter the previous annual record of $6.2 billion across 93 companies in 2025.

Some of the biggest figures and deepest pockets in Silicon Valley are throwing their weight behind nuclear energy advancement as a silver bullet solution to the energy monster that AI is creating. Major investors include Microsoft’s Bill Gates and OpenAI’s Sam Altman. “There's no way to get there without a breakthrough,” Altman said at the 2024 World Economic Forum in Davos, Switzerland. “It motivates us to go invest more in fusion.”

In addition to nuclear fusion, there is considerable buzz around the potential for small modular reactors (SMRs) to transform the aging and ailing nuclear power sector in the United States. These smaller and cheaper reactors hold considerable promise for overcoming some of the hurdles that have caused nuclear energy to fall out of fashion over the last several decades, particularly as utilities and developers look for new ways to match rising electricity demand.

Traditional nuclear power plants are enormously expensive and time-consuming to develop. The United States’ newest traditional nuclear power plant, Georgia’s Plant Vogtle, finally came online in 2024, years late and billions of dollars over budget. While that record has scared many policymakers and investors away from large-scale nuclear power, there is hope that SMRs could allow for a more agile energy future at a time when carbon-free energy sources are sorely needed.

SMRs, however, have been slow to deliver on the considerable hype behind them. While billions of dollars have gone toward developing the technology, and the Nuclear Regulatory Commission only approved NuScale’s uprated SMR design last year, there are still zero commercial SMRs operating in the country. Some experts think the buzz has turned to bust. Others, buoyed by the new wave of investment interest driven by the AI boom, believe the timing is finally right for the SMR revolution.

Among the latter camp, a duo of scientists with SpaceX pedigrees is taking advantage of an abandoned SMR test facility in Virginia, hoping to be the team that pushes the SMR revolution over the finish line and into commercial reality, as reported by the Washington Post. “We’re standing on the shoulders of giants here, right?” Applied Atomics co-founder Ben Kellie told the newspaper. “We’re starting with something that had $400 million in investment put into it, and significant time and effort. That’s a leg up.”

Whether or not this project ultimately serves as the proof-of-concept for SMRs, it will at the very least provide more data in a nascent field where hard numbers are sorely needed. “It is not just about whether the technology is viable,” David Schlissel, a longtime nuclear consultant to consumer and environmental groups, told the Washington Post. “It is also whether the cost is viable. … The industry is running around with all this hype trying to sell nuclear broadly. But they still have not fully tested and built any of these new reactors.”

By Charles Kennedy for Oilprice.com