Nuclear startup Valar Atomics, which builds small modular reactors (SMRs), is in talks to raise a new funding round that would value it at around $6 billion, according to three sources familiar with the company. Sequoia is expected to lead the deal. The El Segundo, California-based startup is seeking to raise $1 billion in equity, part of which was previously raised at a lower valuation. According to a Bloomberg report in March, Valar raised $450 million, including $340 million in equity and $110 million in debt, at a $2 billion valuation.
Multi-tranche funding structures become the norm in the AI era
Deals structured in multiple installments at varying valuations, occasionally executed at different times, are becoming increasingly common in today's AI-fueled fundraising environment. These deals can create the perception that capital was invested at a single, uniform valuation. In reality, investors in the same round can end up paying different prices for the same company — a distinction that matters more than ever as outsiders try to benchmark red-hot startups against one another.
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Helium-cooled reactor powers Nvidia AI chip in proof of concept
Earlier this month, Valar demonstrated that its nuclear reactor provided a small amount of power to an Nvidia AI chip. Concurrently with this proof-of-concept demonstration, Valar and Nvidia announced a partnership to explore the development of nuclear energy to power future AI data centers. This move comes amid a broader demand crunch: data center electricity needs are projected to grow sharply over the next several years, and utilities in many regions are years away from adding enough new capacity. That vacuum has turned nuclear power into one of the most closely watched corners of the AI infrastructure boom.
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Regulatory hurdles and high-profile backers
Valar's technology is based on a helium-cooled, high-temperature gas reactor. The company plans to build hundreds of SMRs to power data centers. However, the technology is still nascent, and it is not clear how long it will take to be deployed at industrial scale. Valar counts Palmer Luckey, founder of Anduril, and Shyam Sankar, Palantir's chief technology officer, among its backers. Other players in this space include Kairos Power and TerraPower, backed by Bill Gates, and NuScale Power, the only SMR developer with U.S. regulatory design approval. Valar has also taken an aggressive legal stance toward its regulator, joining several states and rival startups in suing the Nuclear Regulatory Commission, arguing that the agency wrongly applies the same lengthy licensing process to small test reactors as it does to full-size commercial plants. The case has not been resolved, with both sides repeatedly pausing litigation, suggesting a settlement may be in the works.
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Founded by Isaiah Taylor, who dropped out of high school at age 16, the now-27-year-old has said he launched two startups before Valar and proudly shared that his great-grandfather worked as a nuclear physicist on the Manhattan Project. Valar's rise is playing out against a broader demand crunch. For more on how AI is driving infrastructure demand, read our article on China's cheap, powerful AI model. For background on SMR technology, see the Wikipedia page on small modular reactors.
