AI's Energy Demand Fuels Nuclear Revival in US Towns

A quiet city in Kentucky, once known as “Atomic City” and more recently celebrated as “Quilt City,” finds itself at the unexpected epicenter of America’s renewed nuclear ambitions. Paducah, a city of 27,000, is poised to resurrect its nuclear past as the insatiable energy demands of artificial intelligence drive a national push to revitalize uranium enrichment within the United States.

For over six decades, Paducah hosted a Department of Energy (DOE) uranium enrichment plant, a facility that eventually shuttered in 2013 amid a decline in the nuclear energy sector. Simultaneously, the city embraced a new identity, earning a UNESCO “creative city” designation for its vibrant quilting tradition. Now, however, the former enrichment site is back in the spotlight. A startup backed by tech billionaire Peter Thiel, General Matter, has announced plans to reopen the plant. This move aligns with the Trump administration’s broader strategy, which recently designated Paducah as one of four key sites for developing AI data centers and energy projects, emphasizing nuclear power over renewable sources like solar and wind.

General Matter, led by former SpaceX engineer Scott Nolan, who has notably appeared alongside President Trump, emerged from stealth mode earlier this year. The company’s vision, detailed at a recent Paducah event, involves developing what it describes as “the nation’s first U.S.-owned, privately developed uranium enrichment facility.” General Matter has secured a multi-decade, 100-acre lease with the DOE and aims to begin enriching uranium by the end of the decade, producing fuel vital for “the next generation of nuclear energy, central to America’s aspirations in AI, manufacturing, and other critical industries.” However, the DOE’s own press release offers a slightly different timeline, indicating construction starting in 2026 and enrichment operations not until 2034.

Key questions remain unanswered regarding General Matter’s specific plans. It is unclear whether the company intends to refurbish the existing facility with modern technology or build entirely anew, and whether it will produce low-enriched uranium for current reactors or the more highly enriched uranium (HALEU) required by advanced reactor designs. The answers will significantly impact the project’s scale and its potential influence on power grids nationwide. Notably, the DOE has selected General Matter as one of four companies to provide HALEU enrichment services, while also contracting it for low-enriched uranium.

The current resurgence of nuclear energy is a stark reversal from its downturn following the 1970s and 80s boom, when cheaper gas-fired power plants led to widespread reactor and enrichment plant closures. Today, major tech companies like Microsoft, Meta, Amazon, and Google are actively investing in nuclear power, either by reviving old reactors or supporting the development of smaller, more efficient advanced designs. This surge in demand has exposed a critical bottleneck in the nuclear supply chain: uranium enrichment.

Enrichment is a complex process where naturally occurring uranium, with its low concentration of the fissionable isotope U-235, is converted into a gas and then processed to increase the U-235 concentration, typically to about 5 percent for traditional reactors. The US currently has the capacity to enrich only about a third of the uranium its reactors need, relying heavily on foreign suppliers, including Russia, which until recently was a major global source. The US ban on Russian uranium imports in 2024 further intensified the domestic push.

General Matter is not the only player seeking to enrich uranium in Paducah. Global Laser Enrichment (GLE) has had a long-standing deal with the DOE to acquire “tails,” or depleted uranium, from years of enrichment at the site. GLE is developing a novel laser-based enrichment technology designed to efficiently re-enrich these tails into usable fuel. The company applied for a license in June to begin operations adjacent to the Paducah plant, anticipating a Nuclear Regulatory Commission decision within 18 months, with plans to be operational by 2030. GLE foresees significant growth potential driven by AI and data centers, noting that it could pivot to HALEU production if advanced reactors achieve commercial viability. Currently, Russia is the sole commercial producer of HALEU.

Both the Biden and Trump administrations have supported reshoring the nuclear supply chain, albeit with different primary motivations. For Biden, nuclear energy aligns with climate goals by offering carbon-free electricity. Trump, while undermining climate commitments and renewable energy projects, views nuclear power as essential for ensuring US tech companies have the electricity needed to dominate the AI market. The Trump administration’s recently released AI vision explicitly includes fast-tracking energy-intensive data centers in conjunction with fossil fuel and nuclear power plants, often by limiting environmental reviews.

This expedited approach has raised significant concerns among critics. Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, expressed apprehension regarding the potential lack of oversight and public participation, stating, “It seems their mindset is construction and production at all costs.” Nuclear energy has long been a contentious topic, celebrated for its carbon-free generation but criticized for issues like uranium mining’s environmental impact (as seen near the Grand Canyon and its effect on the Havasupai Tribe) and the unresolved challenge of long-term radioactive waste storage. Adding to these concerns, the Paducah enrichment plant itself is a Superfund site, designated by the Environmental Protection Agency for priority cleanup due to severe contamination. This legacy underscores the complex hurdles companies and policymakers must navigate to successfully revive nuclear energy in small American towns.

Despite these challenges, there is broad bipartisan support for uranium enrichment. Rowen Price, a senior policy advisor at the nonprofit Third Way, which advocates for nuclear energy, emphasizes the strong momentum to “get it right.” Local lawmakers in Kentucky have also expressed optimism, viewing Paducah’s potential role in the future of AI and energy as a significant economic boon. Kentucky Governor Andy Beshear highlighted General Matter’s proposed $1.5 billion project, which is expected to create 140 jobs. As Senator Danny Carroll (R-KY) wrote in an op-ed, “Paducah is again at the center of America’s nuclear future.”