- Questions about SMR safety are popping up as data centers turn to nuclear tech for new power generation
- Construction of multiple test reactors is now underway in the U.S.
- The biggest hurdle on the horizon for U.S. rollouts is fuel availability
Data centers’ monstrous appetite for power is starting to draw more and more attention in the public sphere. And that’s beginning to raise some interesting questions about just how much we really know about a key technology expected to help close the gap between supply and demand: small modular reactors (SMRs).
Speaking to Marketplace about data center interest in nuclear technology, the University of British Columbia’s Allison Macfarlane stated that the SMRs hyperscalers are interested in “don't exist, and as a result, we don't know if they're going to be cheaper, smaller, safer, you know, present less of a nuclear weapons proliferation risk.”
This caught out attention – not just because we told you this would happen – but because Macfarlane served as chair of the U.S. Nuclear Regulatory Commission (NRC) from 2012 to 2014.
The idea that SMRs may be neither safe nor cost effective could prove a huge blow to data center operators that are desperately seeking not just bridge technologies (like natural gas) but long-term power solutions.
So, we took Macfarlane’s points about economics and safety to both the NRC and companies on the front lines of SMR development.
Matt Loszak, CEO of Aalo Atomics, conceded that “the economics must still be proven” but argued “this isn’t theory anymore, it’s happening.”
Wheels in motion
Case in point: Aalo broke ground on its first nuclear power plan, Aalo-X, in August in the lands surrounding the Idaho National Lab. Loszak said the sodium-cooled experimental reactor will “achieve criticality next year” and be used to validate full-scale manufacturing and operation ahead of commercial availability.
Aalo was one of 10 companies tapped to participate in the U.S. Department of Energy’s Reactor Pilot Program. Launched earlier this year, the program aims to fast-track nuclear technology development and have three test reactor designs reach criticality by July 2026.
Meanwhile, Kairos Power, which has signed a deal to supply power for Google data centers in two states, already has a test reactor under construction in Tennessee and plans to break ground on a commercial-scale reactor next year.
An NRC representative told Fierce it is also reviewing several applications for additional SMR designs. These include X-energy’s Xe-100 reactor for use as part of the Long Mott Generation project in Texas and GE Hitachi’s BWRX-300 reactor for the Tennessee Valley Authority’s (TVA) Clinch River Project. TVA is one of the partners working with Google and Kairos, and its Clinch River Project is located near the site of the Kairos development.
The NRC representative stressed that the agency “will only approve these and future licensing requests if the applicant properly demonstrates the design’s compliance with our regulations on safety, materials control and related topics.”
While the U.S. is perhaps the epicenter of AI-spurred data center development and thus nuclear power demand, a similar process is playing out in Canada.
Ontario Power Generation in May received regulatory approval to use a BWRX-300 reactor as part of its Darlington New Nuclear Project. It is expected to break ground in Q1 2026, with the reactor expected to begin generating 300 MW of power by the end of 2030. All told, the project is aiming to light up four SMRs, which will produce a total of 1.2 GW of power.
There’s a reason data centers continue to chase SMRs even with natural gas and renewable energy options available to them. Once the technology is proven out, it can provide not just long term power generation but also flexibility to scale that generation upward.
“The point isn’t that one SMR replaces a gigawatt plant, it’s that SMRs can be deployed where power is needed, when it’s needed, and in scalable increments that match real industrial demand,” James Walker, CEO of NANO Nuclear Energy, told Fierce.
“AI companies aren’t waiting for a giant, decade-long megaproject, they need reliable, high-density energy fast, and SMRs can co-locate with data centers, operate off-grid and be built in parallel rather than one at a time.”
Hurdles ahead
Though governmental policy changes have helped get the nuclear ball rolling once again, SMRs and their proponents still face a series of challenges. For instance, Walker said public perception remains a problem.
“People still associate nuclear with legacy plants from the 1970s, when in reality modern reactors, especially microreactors and SMRs, are built with passive safety systems and siting flexibility that simply didn’t exist decades ago,” he explained.
Both Walker and the analysts at Morningstar DBRS also pointed to supply chain – particularly the nuclear fuel supply chain – as a limiting factor for future deployments.
“Fuel supply remains a chokepoint in the U.S. as it currently imports the majority of its enriched uranium, with domestic enrichment limited to 4.3 million separative work units (SWU) annually from Urenco’s New Mexico facility, far below the 15 million SWU needed for projected builds,” Morningstar’s team wrote in a October research note.
Morningstar noted that the Department of Energy is trying to address the issue but warned “bottlenecks could delay SMR fuel availability until 2027.” They added that Canada, which was the second largest producer of uranium in the world in 2024, is in a better position on this front despite recent production issues that sent fuel prices up.