Private equity flows to advanced nuclear companies hit record high in 2024

Private equity and venture capital investments in advanced nuclear companies in 2024 surpassed the total deal value of the past 15 years combined, driven by demand for energy to power the rapid advancement of AI.

Private equity transaction value in the advanced nuclear sector reached $783.3 million in 2024, 13x the 2023 total, according to S&P Global Market Intelligence data. The number of deals doubled in 2024 compared to 2023.

The data includes companies developing next-generation nuclear technologies, such as small modular reactors, Generation III+ reactors, and high-assay low-enriched uranium fuel technologies. It also covers developers of smaller, lower-capacity reactors.

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AI power demand speeds investment

The demand for energy to power the datacenters that host AI has significantly increased the interest of private equity firms in advanced nuclear, a market these firms have not traditionally focused on, Jeffrey Merrifield, partner at Pillsbury Winthrop Shaw Pittman LLP, told Market Intelligence.

"There are a variety of potential deals that are underway where the members of the datacenter and AI community are looking at direct investment in advanced reactor technologies. That has certainly piqued the interest of a variety of folks in private equity," Merrifield said.

The deployment of nuclear reactors is shifting from utilities to the petrochemical, manufacturing and AI sectors, Merrifield said. Growing confidence in nuclear energy is set to drive growth in advanced nuclear, and "the AI community is going to provide the foundation for [demand] stability that it needs," Merrifield said.

A catalyst has been the big tech firms, which are pouring money into advanced nuclear to meet their AI and datacenter electricity demand. Alphabet Inc. partnered with Kairos Power LLC, an advanced nuclear reactor developer, to deploy 500 megawatts by 2030. Meanwhile, Amazon.com Inc. partnered with X Energy and Dominion Energy Inc. on reactor projects, and Meta Platforms Inc. seeks up to 4 gigawatts of nuclear power by early 2030 for its AI electricity demand.

"There was a huge amount of support from the tech industry for nuclear — because the tech industry has very large projected energy demands," James Walker, CEO of Nano Nuclear Energy Inc., told Market Intelligence.

Merrifield said investor interest is also buoyed by support from the US government, citing the passage of the ADVANCE Act, which reduces licensing times and cuts processing fees for developing advanced nuclear reactors. "People in the private equity community are starting to take notice of the degree to which Washington, DC, in a bipartisan way, is incredibly supportive of nuclear."

Benton Arnett, senior director of markets and policy at the Nuclear Energy Institute, said clean energy investments have focused on renewables for years. However, the growing demand for reliable, net-zero emissions energy is increasing interest in nuclear as the most scalable clean energy technology.

Record-high small modular nuclear reactor deal spurs transaction value

One major deal in 2024 lifted the aggregate private equity-backed advanced nuclear transaction value. X Energy LLC, a small modular reactor company, raised $500 million, led by Amazon's The Climate Pledge Fund, with participation from private investors including Ares Management Corp. and NGP Energy Capital Management LLC. The University of Michigan also participated.

It was followed by Zap Energy Inc., which raised $130 million in a series D funding round led by an investor group including Soros Fund Management LLC, Mizuho Financial Group Inc., Chevron Technology Ventures LLC, Energy Impact Partners LLC, Shell Ventures, DCVC, Addition LP, Lowercarbon Capital LLC, BAM Elevate Manager LLC, Breakthrough Energy Ventures LLC, Leitmotif Management LLC, Xplor Ventures and Plynth Energy.