Trend analysis: Advanced nuclear (SMRs & Gen IV) — where the value pools are (and who captures them)

The small modular reactor (SMR) market reached $6.9 billion in 2025 and is projected to exceed $13.8 billion by 2032, with tech giants Amazon, Google, and Microsoft collectively committing over $1.5 billion to nuclear power agreements—signaling that data center operators have become the demand catalyst the nuclear industry has awaited for decades (Precedence Research, 2025; Nuclear Business Platform, 2025). This convergence of AI-driven electricity demand, decarbonization imperatives, and modular construction economics is reshaping where value accumulates in the nuclear value chain and which players capture it.

The COP28 pledge to triple global nuclear capacity by 2050 provided political tailwind, but the commercial reality remains challenging. First-of-a-kind (FOAK) projects consistently exceed cost estimates, licensing timelines stretch years beyond projections, and supply chain constraints bottleneck deployments. Understanding where value pools are forming—and who captures them—requires disaggregating the SMR ecosystem into distinct segments with different competitive dynamics.

Why It Matters

Advanced nuclear occupies a unique position in the clean energy landscape: dispatchable, carbon-free, land-efficient baseload power with 90%+ capacity factors. Unlike wind and solar, nuclear provides firm generation without grid-scale storage requirements. Unlike natural gas with CCS, nuclear avoids upstream methane emissions and geological storage dependencies.

The AI boom intensified this value proposition. Data center electricity demand is projected to double by 2030, with individual hyperscale facilities requiring 500–1,000 MW of continuous power. Traditional grid interconnection queues exceed 5 years in major markets, making behind-the-meter nuclear increasingly attractive for compute-intensive operations.

Investment momentum accelerated dramatically during 2024–2025:

Amazon committed approximately $500 million to X-Energy for SMR development, plus a partnership with Energy Northwest for 320 MWe expandable to 960 MWe by 2039
Google signed a 500 MW agreement with Kairos Power targeting first reactor operation by 2030
X-Energy closed a $700 million funding round in February 2025, including investment from Jane Street and Emerson Collective
UK Government announced a £2.5 billion package in June 2025 to accelerate SMR deployment
South Korea earmarked $1.8 billion through 2034 for maritime and land-based SMRs

These commitments signal that advanced nuclear is transitioning from R&D curiosity to commercial deployment. The critical question: where does value accumulate as this transition unfolds?

Key Concepts

Value Pool Segmentation

The SMR ecosystem contains six primary value pools with distinct characteristics:

Value Pool	Estimated Size (2030)	Margin Profile	Key Players	Entry Barriers
Reactor Design & Licensing	$2–3B	40–60% gross	NuScale, GE Hitachi, X-Energy	Very High (10+ year development)
Fuel Fabrication	$1–2B	25–35%	URENCO, Centrus, HALEU producers	Very High (enrichment capability)
Module Manufacturing	$3–5B	15–25%	BWX Technologies, Doosan, Mitsubishi	High (nuclear QA certification)
Balance of Plant	$2–4B	10–15%	Fluor, Bechtel, Samsung C&T	Medium (EPC experience)
O&M Services	$1–2B annually	20–30%	Reactor vendors, utilities	Medium (training/certification)
Decommissioning & Waste	Growing	Unknown	Waste Control Specialists, Holtec	High (regulatory approval)

Reactor Design & Licensing captures the highest margins but requires the longest investment horizon. NuScale spent over $1.3 billion achieving NRC design certification—a barrier few competitors can replicate. The 10+ year development timeline and regulatory uncertainty create winner-take-most dynamics within design categories.

Fuel Fabrication, particularly High-Assay Low-Enriched Uranium (HALEU) production, represents an emerging bottleneck. Most Gen IV designs require HALEU (5–20% enrichment), but current global capacity is near zero outside Russian suppliers. Centrus Energy's Piketon, Ohio facility—the only US HALEU production—produces mere kilograms annually against projected tonnes of demand.

FOAK-to-NOAK Cost Curves

The economic viability of SMRs depends on achieving cost reductions from first-of-a-kind (FOAK) to nth-of-a-kind (NOAK) deployments. Historical data from large nuclear and analogous industries suggests 15–20% learning rates—each doubling of cumulative deployment reduces unit costs by 15–20%.

Current FOAK cost estimates vary dramatically:

Design	FOAK Cost Estimate	Target NOAK Cost	Learning Rate Required	Units to NOAK
NuScale VOYGR	$9,000–11,000/kW	$4,000–5,000/kW	18–22%	8–12 units
GE Hitachi BWRX-300	$6,000–7,500/kW	$3,000–4,000/kW	15–18%	6–10 units
X-Energy Xe-100	$7,500–9,000/kW	$3,500–4,500/kW	17–20%	8–10 units
TerraPower Natrium	$8,000–10,000/kW	$4,500–5,500/kW	16–19%	10–15 units

GE Hitachi's BWRX-300 claims 60% capital cost reduction versus traditional large reactors through simplified design (natural circulation, no large-break loss-of-coolant accident scenarios) and modular construction. Their first-mover advantage in licensing (UK GDA Step 2 completed, Canadian construction license pending) positions them to capture early learning curve benefits.

Licensing Pathway Economics

Regulatory approval represents both the primary barrier and the primary value capture mechanism for reactor designers. Alternative pathways are emerging:

NRC 10 CFR Part 52: Combined construction and operating license, 4–6 year review
NRC 10 CFR Part 53: New framework for advanced reactors, potentially faster
Canadian Nuclear Safety Commission: Parallel licensing with NRC, 3–4 year timeline
UK Office for Nuclear Regulation: Generic Design Assessment, 4–5 year process

Design vendors achieving approval in multiple jurisdictions capture licensing-as-a-service value, enabling deployment without repeating full regulatory review. GE Hitachi's multi-jurisdictional strategy (Canada, UK, US, Poland) exemplifies this approach.

What's Working

Tech Industry Demand Aggregation

Hyperscale data center operators are solving nuclear's traditional demand problem. Unlike utilities with diverse generation portfolios and uncertain demand growth, tech companies offer:

Firm offtake commitments: 20+ year power purchase agreements
Balance sheet strength: Investment-grade counterparties reducing financing costs
Site control: Data center campuses with existing or planned infrastructure
Regulatory sophistication: Experience navigating complex permitting

Amazon's X-Energy partnership demonstrates this model. Rather than waiting for utility procurement, Amazon provides development capital, guaranteed offtake, and site identification—de-risking the projects that create demand for future NOAK deployments.

Factory Manufacturing Economics

SMR economics depend on shifting construction from site-built to factory-manufactured modules. BWX Technologies' Lynchburg, Virginia facility and Doosan's Korean manufacturing complex provide proof points.

Rolls-Royce SMR claims 80% factory manufacturing versus 20% for large reactors, with module delivery by truck reducing heavy-lift crane requirements. Their consortium with Lairds (manufacturing), BAM Nuttall (civil construction), and Atkins (engineering) integrates the supply chain for UK deployment.

Policy Support Mechanisms

Government support is materializing across multiple vectors:

US DOE ARDP: $2+ billion in cost-share funding for demonstration projects
US IRA Production Tax Credit: $15/MWh for zero-carbon generation (potentially higher for domestic content)
UK GX Package: £2.5 billion for SMR development and fleet deployment
Canadian AECL: Site hosting and regulatory support for multiple designs

What's Not Working

HALEU Supply Chain Gaps

HALEU production remains the critical constraint. TerraPower delayed their Wyoming demonstration project one year due to fuel supply uncertainty following Russia sanctions disruptions. Current solutions are inadequate:

Centrus: Producing grams/year against tonnes/year demand projections
DOE downblending: Limited HEU stocks, not a long-term solution
Foreign supply: Canadian and European enrichers not yet certified for HALEU

Without HALEU resolution, Gen IV designs requiring higher enrichment cannot deploy at scale regardless of demand or licensing progress.

NuScale UAMPS Cancellation

The August 2023 cancellation of NuScale's flagship Carbon Free Power Project—the Utah Associated Municipal Power Systems (UAMPS) agreement—exposed FOAK economics challenges. Cost estimates escalated from $5.3 billion to $9.3 billion, with levelized costs exceeding $89/MWh. Despite DOE cost-share support, municipal utility customers withdrew.

This cancellation damaged investor confidence and delayed the learning curve benefits that FOAK projects were supposed to generate. NuScale pivoted toward international markets (Poland, Ghana, Romania) where regulatory competition and energy security concerns create different economics.

Licensing Timeline Realism

Despite streamlining promises, licensing timelines remain extended. TerraPower's construction permit application (filed March 2024) targets approval by 2026—already a 2+ year timeline for a relatively mature design with DOE backing. New entrants without existing regulatory relationships face 4–6 year review periods.

Key Players

Established Leaders

GE Hitachi Nuclear Energy leads commercialization with the BWRX-300, a 300 MWe boiling water reactor claiming simplified passive safety and 60% cost reduction. First deployment at Ontario Power Generation's Darlington site targets 2028 operation. Their multi-jurisdictional licensing strategy and partnership with established utilities position BWRX-300 as the likely first-to-scale Western SMR.

NuScale Power achieved the first NRC design certification for an SMR (2020) and subsequent Standard Design Approval (2023). Despite UAMPS setback, international projects proceed: Poland's KGHM (12-module plant targeting 2029), Romania's RoPower, and Ghana partnership. Their VOYGR architecture supports 4, 6, or 12-module configurations.

Westinghouse Electric offers the AP300, scaled from their proven AP1000 design. With operating AP1000 units at Vogtle (US) and Sanmen/Haiyang (China), Westinghouse brings deployment experience lacking among pure-play SMR developers.

Emerging Startups

Kairos Power develops the KP-FHR using molten fluoride salt coolant and TRISO pebble fuel. Their Google partnership (500 MW by 2030) and operating Hermes test reactor in Tennessee demonstrate execution capability. The low-pressure molten salt design enables smaller containment and simpler safety systems.

TerraPower (Bill Gates-backed) develops the Natrium sodium fast reactor with integrated molten salt energy storage. Their Wyoming demonstration project, despite delays, represents the most advanced US sodium fast reactor deployment.

Oklo went public via SPAC in May 2024, targeting 2027 operation of their Aurora microreactor in Idaho. Their compact design (1.5–15 MWe) addresses remote/industrial applications rather than grid-scale generation.

Key Investors & Funders

Breakthrough Energy Ventures invested in TerraPower and Commonwealth Fusion Systems, demonstrating climate-focused VC appetite for advanced nuclear.

US DOE Loan Programs Office committed $1.46 billion in loan guarantees to Gevo (SAF) and substantial support for nuclear through ARDP and other programs.

Segra Capital and Jane Street participated in X-Energy's $700 million round, bringing financial market sophistication to nuclear investment.

Examples

Ontario Power Generation's Darlington SMR Project: Canada's largest clean energy project, the BWRX-300 deployment at Darlington represents the most advanced Western SMR construction. OPG's October 2022 construction contract with GE Hitachi targets 2028 commercial operation. The project benefits from site co-location with existing Darlington nuclear units, regulatory familiarity with the site, and provincial political support. Cost estimates of CAD $3–4 billion for 300 MWe set benchmarks for subsequent deployments.
X-Energy's Amazon-Backed Data Center Supply: Amazon's partnership with Energy Northwest for X-Energy Xe-100 reactors near existing Columbia Generating Station demonstrates the tech-nuclear nexus. The agreement provides 320 MWe initial capacity expandable to 960 MWe, with Amazon's capital commitment de-risking development. X-Energy's TRISO fuel—uranium encapsulated in ceramic/graphite layers—provides inherent safety suitable for data center proximity.
Rolls-Royce SMR's UK Fleet Program: The UK's selection of Rolls-Royce SMR for deployment at Wylfa (Wales) and potential additional sites targets 10+ GWe by 2040. The £2.5 billion government package includes £400 million direct investment. Rolls-Royce's consortium approach—integrating manufacturers, constructors, and operators—attempts to capture integrated value chain economics unavailable to pure-play designers.

Action Checklist

Monitor HALEU production announcements from Centrus, URENCO, and DOE for supply chain constraint resolution
Track GE Hitachi Darlington milestones as the leading indicator for Western SMR commercialization
Evaluate data center operator nuclear announcements for demand signal acceleration beyond Amazon/Google/Microsoft
Assess fuel fabrication investments for FOAK-to-NOAK deployment timelines (BWXT, Framatome, Westinghouse)
Review licensing application submissions and NRC review timelines for deployment schedule validation
Compare LCOE projections against grid market alternatives (offshore wind + storage, gas with CCS) for competitiveness thresholds

FAQ

Q: Which SMR design is most likely to achieve commercial-scale deployment first? A: GE Hitachi's BWRX-300 leads on commercialization metrics: construction underway at Darlington (2028 target), UK GDA progressing, and multiple utility customers announced. Their simplified BWR design leverages 60+ years of operating experience, reducing technology risk versus novel Gen IV approaches. NuScale maintains design certification advantage but faces execution challenges post-UAMPS. Kairos Power's Google partnership accelerates their timeline but from an earlier starting point.

Q: How do SMR economics compare to alternatives for data center power? A: SMR NOAK targets of $3,500–5,000/kW capital cost translate to $65–90/MWh LCOE assuming 90% capacity factor and 40-year operation. This compares to $35–50/MWh for onshore wind/solar with storage in favorable locations, but SMRs offer firm 24/7 power without land constraints. For data center operators valuing reliability and co-location, SMR economics become favorable when considering transmission costs and grid interconnection delays avoided. The calculation is site-specific.

Q: What is the HALEU supply chain resolution timeline? A: Optimistic scenarios show meaningful HALEU production (10+ tonnes/year) by 2028–2030 through Centrus expansion, URENCO entry, and DOE-supported enrichment. Pessimistic scenarios extend to 2032+ given enrichment cascade construction timelines. Designs not requiring HALEU (NuScale, GE Hitachi, Rolls-Royce using standard LEU) maintain schedule advantages. HALEU-dependent designs (Kairos, TerraPower, X-Energy) face fuel-constrained deployment regardless of other readiness factors.

Q: How should investors assess nuclear regulatory risk? A: Differentiate between design licensing risk (substantial for novel designs) and deployment licensing risk (lower for certified designs at experienced sites). GE Hitachi's strategy—multiple certified designs across jurisdictions—reduces country-specific regulatory concentration. Monitor NRC staff assessments and public comment resolutions for schedule risk indicators. Political risk remains: administrations hostile to nuclear can slow reviews without formal policy changes.

Sources

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Nuclear Business Platform. (2025). Top 5 SMR Tech to Keep an Eye on in 2025.
World Nuclear Association. (2025). Small Modular Reactors.
Fortune Business Insights. (2025). Small Modular Nuclear Reactor Market Size, Share, Industry Trends.
Mordor Intelligence. (2025). Small Modular Reactor Market Size & Share Analysis.
ITIF. (2025). Small Modular Reactors: A Realist Approach to the Future of Nuclear Power.
VanEck. (2025). Investment Opportunities in SMRs: The Future of Nuclear Power.
Department of Energy. (2024). Advanced Reactor Development Program Updates.