Small nuclear reactors: the startup bet aiming to revolutionize the energy industry

The nuclear sector is experiencing an unprecedented resurgence. In just the last few weeks of 2025, startups specializing in nuclear technology have managed to attract $1.1 billion in investment. This capital flows with optimism toward a new model: smaller-scale nuclear reactors, which promise to solve the chronic problems faced by the traditional industry.

The problem with traditional scale

Conventional nuclear reactors are colossal structures. The most recent plants in the United States, Vogtle 3 and 4 located in Georgia, require tens of thousands of tons of concrete, use fuel assemblies exceeding 4 meters in height, and each unit generates more than 1 gigawatt of electricity. However, these mega-structures have experienced delays of eight years and cost overruns exceeding $20 billion.

Nuclear startups consider an alternative: if they miniaturize the nuclear reactor, they could bypass both obstacles. Their proposal is to produce multiple small units instead of one giant one, scaling manufacturing through mass production techniques that reduce costs progressively.

The theoretical advantage of modularity

The argument of these companies is simple: as they produce more components of these smaller nuclear reactors, they will improve assembly techniques and prices should fall. If they need more energy, they simply add additional reactors. Experts are still investigating the actual scope of these economies of scale, but current nuclear startups place their hopes on this benefit being significant.

Manufacturing: the real challenge

Mass industrial production is not trivial. Tesla’s case illustrates this: the company faced enormous difficulties manufacturing the Model 3 profitably and at volume, also having advantages that U.S. nuclear startups do not possess.

Milo Werner, general partner at DCVC, explains an uncomfortable reality: “I have colleagues in the nuclear supply chain who can list five to ten materials that we simply do not manufacture in the United States. We buy them abroad. We have forgotten how to produce them.” Werner has a background in manufacturing: he led product introductions at Tesla and later at Fitbit, where he established four factories in China. He currently co-founds NextGen Industry Group, focused on advancing new technologies in the manufacturing sector.

Two insurmountable challenges for any manufacturer

When a company of any size decides to manufacture, it faces two main obstacles. The first is capital, usually the most restrictive bottleneck since facilities are expensive. For the nuclear sector, this is an advantage: “They are now flooded with capital,” says Werner.

The second challenge is the shortage of industrial talent. “We haven’t built any industrial facilities in 40 years in the United States,” Werner comments. The result: corporate muscle memory has been lost. “It’s like having been watching television for a decade and then trying to run a marathon the next day. It just doesn’t work.”

After years of offshoring, the U.S. lacks people with real experience in both construction and factory management. It’s not just machine operators but the entire chain: plant supervisors, financial managers, board members. The number of people with industrial manufacturing experience is insufficient for all the new nuclear startups to have fully prepared teams.

How nuclear startups can regain capacity

A positive trend Werner observes is that many startups, including nuclear ones, build initial prototypes near their core technical teams. “This brings manufacturing closer to the U.S., allowing them to maintain agile improvement cycles.”

Modularity is key. Companies that start by producing small volumes from the beginning can gather valuable data about their manufacturing process. If this data shows consistent improvements, it reassures investors about the viability of future scaling models.

The gains from mass production do not come instantly. While many companies project cost reductions derived from learning through production, this transition often takes longer than expected. “They often need years, even a decade, to reach that point,” Werner concludes. For smaller nuclear reactors, patience will be as important as innovation.