By Adam Clark and Avi Salzman

Big tech companies are striking deal after deal for nuclear energy to power their massive AI data centers.

The latest came on Monday between Alphabet's Google and privately held Kairos Power, a pioneer in small nuclear reactors. It shows that the interest from tech companies is strong, but also that the economics of new nuclear technologies are complicated -- even with a deep-pocketed customer like Google involved, the project's financial success is no lock.

The financial structure of the deal is unique. The Tennessee Valley Authority, a federally owned utility that sells power in several states, will buy power from a small Kairos reactor that the company plans to get up and running by 2030. The financial terms weren't released, but the TVA says it will buy the power at a fixed market-based price. Google, which has a goal of decarbonizing its operations, will pay for the clean energy attributes of the power from the reactor for its data centers in Tennessee and Alabama.

Kairos will take on the risk of building the plant, bearing upfront expenses and any cost overruns that crop up. In an interview, Kairos CEO Mike Laufer said the company will need to raise more money to make it happen.

"Additional capital in a variety of forms will be required for the completion of the demonstration phase and the transition to the commercial phase," he said.

Laufer didn't say whether the company plans to go public. Kairos' competitors like Oklo have been able to raise money by selling stock. At least three other privately held nuclear companies are on track to go public this year, and more could be coming in 2026.

This isn't Google's first deal with Kairos. The tech giant already agreed last year to purchase enough nuclear energy from Kairos to support up to 500 megawatts worth of nuclear energy from a series of small reactors. The Tennessee reactor will be 50 megawatts, or about one-twentieth as big as a large-scale nuclear reactor. Kairos is trying to build a new class of advanced reactors that are cooled with molten fluoride salt, unlike the water-cooled reactors that American utilities use today. The TVA is the first U.S. utility to sign an agreement to buy electricity from this type of reactor. Once the company completes the first one, the hope is that the next iterations will be cheaper.

"Lessons from the development and operation of the Hermes 2 plant will help drive down the cost of future reactors, improving the economics of clean firm power generation in the TVA region and beyond," said Amanda Peterson Corio, Google's global head of Data Center Energy, in a statement.

Other companies working on SMR designs include NuScale Power, Oklo, and BWX Technologies. Someday, the three will be rivals of Kairos, but any sign of greater adoption and regulatory acceptance of the technology should be a boon for all of them.

Barron's wrote about the potential for a resurgence in nuclear power last year, flagging the investment case for Constellation Energy and Vistra, which already own multiple nuclear reactors.

Write to Adam Clark at adam.clark@barrons.com

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August 18, 2025 17:06 ET (21:06 GMT)

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