As the United States lays the groundwork for a nuclear revival to fuel the AI data center boom, the next frontier may be small nuclear reactors built offshore to power coastal facilities and merchant ships. Curiously, that momentum could begin in California—a state that banned new nuclear plant construction 50 years ago.

This summer, the Port of Long Beach signed an agreement with the Trump administration to develop next-generation small modular reactors (SMRs) capable of delivering emission-free energy to ports, data centers, and vessels. The interest is driven by surging electricity demand from AI infrastructure, which utilities and grid operators across the country have warned is straining existing generation capacity.

Offshore nuclear power may sound unconventional, but naval submarines and aircraft carriers have operated on small nuclear reactors for decades. In 2020, Russia placed the world's first floating nuclear power station—the Akademik Lomonosov, a barge-mounted facility—into service, supplying electricity to the remote Arctic town of Pevek, population 4,000, and its harbor.

Long Beach and Los Angeles operate on an entirely different scale. The two adjoining ports together form the largest container port complex in the Western Hemisphere, handling the majority of container traffic entering the U.S. West Coast. The Port of Long Beach is now working with local startup Bluecore Energy to build SMRs on floating barges, though the project remains at least a few years from becoming reality.

"I think it's very viable. It's just a question of when, not if," said Max Hopkins, a nuclear power analyst at CITIC CLSA, speaking about the growth of offshore nuclear power broadly—not California specifically—across military, maritime shipping, and AI data center applications.

"To put something into place fast, with production means, and then you can just float it somewhere—it seems like offshore barges are going to be almost ideal," Hopkins told Fortune. "I think it's going to become pretty accepted, much more so than people realize."

Still, Hopkins stressed that the technology is years away from commercial deployment. Regulatory frameworks still need to be established, along with the supply chains and manufacturing systems to support them. The wider SMR industry reflects that early stage: only a handful of designs, such as NuScale Power's, have cleared federal certification, and no commercial SMR plant is yet operating in the United States.

The momentum extends beyond Long Beach. Denmark-based Saltfoss Energy is developing similar nuclear reactor barges in Europe.

Nuclear's Maritime Moment

The future of powering military operations and maritime merchant shipping could be nuclear, Hopkins said. Maritime vessels account for roughly 3% of global greenhouse gas (GHG) emissions—a figure that may sound small but is roughly equivalent to the total GHG emissions of the entire African continent.

The federal push is accelerating on multiple fronts. This week, the U.S. Department of Transportation's Maritime Administration (MARAD) announced a partnership with London-based Core Power to develop regulatory frameworks and technology for a future fleet of nuclear-powered merchant cargo vessels.

A day later, the United States and the International Atomic Energy Agency (IAEA) launched the Atomic Technologies Licensed for Applications at Sea (ATLAS) initiative, designed to advance SMR and micro-reactor technologies for merchant shipping—"underpinned by the highest levels of nuclear safety, security, and non-proliferation," the IAEA said.

The appeal lies in speed and endurance: nuclear-powered ships require refueling only every two or three years rather than every voyage, reducing fossil fuel consumption and enabling faster transit.

"At the same time, innovations such as floating nuclear power plants provide versatile energy sources that could deliver reliable electricity to coastal or remote communities and industry," the IAEA said in a statement.

A Nuclear California?

Bluecore, based in Long Beach, was founded only in January. It raised $10 million in a pre-seed round and quickly became the first nuclear company to partner with MARAD on offshore reactors.

Founder and CEO Kofi Asante, 31, is a Ghanaian-American from Austin, Texas, who became a Silicon Valley veteran before relocating to Southern California. He developed his logistics and maritime-shipping expertise at Uber Freight, heavy-cargo drone company Elroy Air, and electric barge startup Arc before founding Bluecore.

His goal: leverage the maritime industry to deliver clean, consistent power for ports and AI data centers.

"The philosophy was really process of elimination: if you need that much energy, then you arrive at a nuclear reactor," Asante told Fortune. "And if you need real estate, two-thirds of the world is water, so you can use barges for extra real estate."

"We can go miles away and connect via subsea cable—so we don't have to be near neighborhoods, and we don't have to be co-located at the port," he added.

All of this relies on technology that has already been largely developed, Asante argued, including smaller versions of traditional light-water nuclear reactors. Each 10-megawatt reactor on a barge can power the equivalent of roughly 10,000 homes, can be moved by tugboats, and can be stacked alongside others for additional generation capacity.

Asante is aware he is pursuing this technology in a state that banned the development of new nuclear reactors in 1976, citing environmental and safety concerns—including the still-unsolved problem of radioactive waste. That law is the reason California's only remaining operating plant, Diablo Canyon, has long been its sole source of nuclear power; state officials moved in recent years to extend the plant's operations rather than retire it, amid reliability concerns.

The Port of Long Beach recognizes this will be a lengthy process. Port CEO Noel Hacegaba noted that state lawmakers are already debating legislation to study lifting the ban.

"Nuclear is having a moment at the Port of Long Beach, and we are engaged with the private sector, along with state and federal legislators on this issue," Hacegaba said in an emailed statement to Fortune.

"This innovation is years away from becoming a reality due to the technological advancements and regulatory hurdles that still need to be cleared, and it cannot advance without state and federal approvals," he added. "In the meantime, our new partners at Bluecore Energy are following state and federal laws as they provide the private-sector experience to research and develop SMR technology."

Can It Be Safe—and Affordable?

Two major questions hang over offshore nuclear: safety, and whether it can compete economically with natural gas and solar power.

Asante draws a manufacturing analogy—with some exaggeration—arguing that previous nuclear plants were built bespoke, akin to constructing an entire factory to produce a single car.

"Small modular reactors like ours, you build multiple of them, so it starts to look like a factory," he said. "Some of our team came from Rivian and Toyota, and we're looking at it like a production facility."

Hopkins supports the point from a different angle: "A jet engine is actually much more complicated to build than a nuclear reactor from a materials science perspective."

But what happens in the event of a tsunami or major weather event? Hopkins said modern safety designs encase uranium fuel pellets in multiple layers of heavy-duty ceramics and graphite casing, and the pellets are rendered inert when separated.

Asante makes his own case: "Our floating nuclear power plants are mobile. In the event of severe weather, they can quickly be repositioned. They are also shielded so that they can withstand extreme weather and be underwater. And we have multiple control mechanisms that will automatically turn the reactor off if needed."

Being on the water is itself an advantage, he argued: "Water is the cooling mechanism and safest place for our systems, and we have an unlimited amount of access."

This story was originally featured on Fortune.com.