Nuclear startups are back in vogue with small reactors, and big challenges

The nuclear sector is experiencing a significant revival, with a surge in investment directed towards innovative startups. In a remarkable financial boost, these companies collectively secured $1.1 billion in funding in just the last weeks of 2025, driven by the belief that smaller nuclear reactors could overcome the challenges that have plagued the traditional industry. Conventional nuclear reactors are colossal structures, such as the recently constructed Vogtle 3 and 4 in Georgia, which are built using tens of thousands of tons of concrete, feature fuel assemblies that stand 14 feet tall, and each generate over 1 gigawatt of electricity. However, these projects faced major setbacks, with delays extending up to eight years and cost overruns exceeding $20 billion. The new wave of nuclear startups aims to avoid such pitfalls by focusing on smaller reactor designs. Their strategy suggests that increasing reactor numbers could offer a more flexible solution to energy demands. Proponents of smaller reactors argue that they can be manufactured using mass production techniques, which could lead to improved efficiency and reduced costs over time. Yet, the realization of these benefits remains uncertain, and current startups are banking on a positive outcome. Manufacturing challenges are significant, as highlighted by the struggles faced by companies like Tesla in achieving profitable production scales for the Model 3. Unlike the automotive sector, which benefits from established U.S. manufacturing expertise, the nuclear startup scene lacks this advantage. Milo Werner, a general partner at DCVC, pointed out that many essential materials for nuclear manufacturing are no longer produced domestically, forcing reliance on overseas suppliers. With a background in manufacturing at Tesla and FitBit, and as a co-founder of the NextGen Industry Group, Werner emphasizes the dual hurdles faced by manufacturing startups: capital and human resources. While the nuclear sector currently enjoys plentiful capital, the shortage of experienced personnel poses a critical challenge. The U.S. has not built significant industrial facilities in four decades, resulting in a loss of expertise in factory construction and operations. This lack of experienced labor extends beyond just machine operators to include factory supervisors and executive roles. Nonetheless, there is a silver lining. Werner notes that many startups are beginning to develop early versions of their products near their technical teams, which could enhance manufacturing capabilities domestically. To fully capitalize on the advantages of mass manufacturing, startups are encouraged to adopt a modular approach, allowing for the production of smaller volumes early in the process. This strategy not only facilitates initial production but also enables companies to gather data to refine their manufacturing processes. However, the journey to achieving significant cost reductions through manufacturing improvements can be a long one, often taking several years to realize.