Aalo Atomics raises $100M for AI data center nuclear reactors

The escalating energy demands of artificial intelligence are pushing the data center industry to the brink, prompting a dramatic shift towards more robust and reliable power sources. In a significant move signaling this transformation, Aalo Atomics, an Austin-based startup, has successfully raised $100 million in Series B funding, bringing its total capital to $136 million. This substantial investment underscores a growing conviction that nuclear reactors, specifically smaller, factory-built units, are not just a futuristic concept but an imminent solution to the insatiable power appetite of the digital age.

The rise of AI and advanced computing has sent data center electricity consumption spiraling. Projections from the International Energy Agency indicate that global data center electricity use could more than double from approximately 415 terawatt-hours (TWh) in 2024 to over 1,000 TWh by 2026. This surge is largely driven by AI workloads, which IDC forecasts will see energy consumption grow at a compound annual growth rate of 44.7% through 2027. Goldman Sachs Research further projects that power demand from data centers could increase by over 160% by 2030 compared to 2023 levels. Such astronomical figures highlight a critical challenge: ensuring a consistent, carbon-free, and cost-effective power supply for an infrastructure that operates 24/7 and where downtime can incur costs exceeding $8 million per day. Electricity already constitutes the largest operational expense for data centers, accounting for up to 60% of total spending for service providers.

In response, major technology players are increasingly looking to nuclear energy. Tech giants like Amazon, Google, and Microsoft have already begun investing in or exploring partnerships for advanced nuclear solutions. Google, for instance, has signed a contract to purchase nuclear energy from small modular reactors (SMRs) developed by Kairos Power, aiming to bring the first online by 2030. Amazon is also investing in SMRs, and Microsoft has secured a power purchase agreement to restart a unit at the Three Mile Island nuclear power plant to supply its data centers. Even digital infrastructure company Equinix is collaborating with multiple nuclear energy developers, including Oklo, Radiant, and ULC-Energy (with Rolls-Royce SMR), to integrate reliable and sustainable electricity into its global data center empire.

Aalo Atomics is positioned to capitalize on this burgeoning demand with its innovative approach to nuclear power. The company’s core product is the Aalo Pod, a 50 MWe power plant composed of five individual 10 MWe Aalo-1 microreactors. These sodium-cooled reactors, utilizing uranium zirconium hydride (UZrH) fuel, are designed for factory fabrication, enabling mass production and significantly reducing the construction time and cost typically associated with large nuclear plants. CEO Matt Loszak articulates this vision by stating, “We are aiming to do for nuclear reactors what Henry Ford did for cars.” The company has already opened a 40,000-square-foot manufacturing facility in Austin, Texas, and unveiled a non-nuclear prototype, the Aalo-0, demonstrating its commitment to a scalable and repeatable manufacturing process. Aalo Atomics aims to achieve an incredibly low electricity cost of 3 cents per kilowatt-hour, a price point that could fundamentally reshape the energy landscape. The company has also initiated regulatory engagement with the U.S. Nuclear Regulatory Commission and plans to break ground on its first nuclear reactor as early as 2026, with operations potentially commencing by 2027 at the Idaho National Laboratory site.

While the promise of nuclear-powered data centers is immense, challenges remain. Building new reactors, even modular ones, requires significant upfront capital and navigating complex regulatory hurdles. Concerns regarding the nuclear fuel supply chain and the long-term storage of spent nuclear fuel also persist. However, proponents argue that advanced reactor designs incorporate enhanced safety features and that the long lifespans and stable operating costs of nuclear plants offer a compelling long-term solution. As the computational demands of AI continue their relentless ascent, the investment in companies like Aalo Atomics signals a clear path forward: a future where the digital world is powered by the atom.