In the past month, three upstart nuclear energy companies have flipped the switch on new kinds of reactors, hitting a milestone that the Trump administration first pushed for a year ago.

Small new reactors are an untested but potentially promising option to meet America's electricity boom, driven largely by AI data centers. Critics say it's a distraction from more realistic solutions to solve the country's electricity crunch.

President Donald Trump issued a deadline last year of July 4, 2026, for at least three new kinds of reactors to demonstrate "criticality" -- a benchmark that's equivalent to turning on a car engine without pressing the accelerator. It means that a nuclear chain reaction was created in the reactors, but they didn't ramp up enough to get very hot or generate electricity.

As part of the challenge, the federal government chose 10 small companies last year, offering them land and expertise from the government's national labs. The companies funded their own equipment.

The three that hit the criticality milestone are all privately held -- California-based Antares Nuclear and Valar Atomics, and Houston's Deployable Energy. Others, including publicly traded company Oklo, say they are on the verge of reaching the milestone. About a half-dozen small reactor companies have gone public, with more expected in the coming years. Few have any revenue yet, and most have seen their stocks fall this year as investors question how many will be viable.

The July 4 deadline felt incredibly ambitious to Matt Loszak, the CEO of Austin-based Aalo Atomics, which was founded in 2023 with just two employees. But Aalo, which now has almost 200 people, built a reactor on federal land in Idaho in just five months. As of the end of June, it was also on the verge of achieving criticality within days, Loszak said.

The fact that the deadline comes on the country's 250th birthday felt significant, Loszak said in an interview.

"Energy is a very patriotic thing because it brings wealth and well-being to humanity and to a country," he said.

Secretary of Energy Chris Wright visited Idaho last week and declared "America's nuclear renaissance is underway because of President Trump's bold vision and ambitious goals."

Aalo is part of an experiment that could change how nuclear energy is deployed in the U.S. America's 94 existing nuclear reactors are all large-scale machines that use water to cool their reactions and generate electricity.

Dozens of companies are looking to upgrade those old designs, potentially making them safer, faster to build and cheaper to deploy. They also tend to be smaller. Most of the advanced reactors being developed today generate between 1 and 300 megawatts of power, versus the approximately 1,000-megawatt behemoths in use today. The new ones can be deployed in groups, or be placed at data centers or industrial sites.

The Department of Energy has said the criticality pilot project should fast-track commercial licensing for these kinds of reactors. So far, only one company -- Oregon-based NuScale -- has received approval from the Nuclear Regulatory Commission to build small reactors, and none have actually been built yet. Even the most optimistic analysts don't expect them to be deployed in significant numbers until the 2030s.

Aalo's reactors generate 10 megawatts of electricity, and measure about 10 feet by 20 feet -- small enough to be transported on trucks. They're cooled with liquid sodium, which is technically a metal.

The benefit of sodium is that it's much more thermally conductive than other coolants like water, allowing the vessels to be much smaller and have thinner walls, Loszak said. And unlike the country's existing reactors, Aalo's reactors are designed to be easily replicable in a factory. Loszak expects them to be used for data centers and similar businesses. The company has been getting attention from investors, and has raised around $300 million. It expects to be able to build a full-scale reactor to power a small data center by next March.

Some nuclear experts see this pilot project as a promising way to get new kinds of reactors off the ground.

"Compared to historical timelines for previous research and test reactor 'concrete to criticality,' the speed has been remarkable," wrote Katy Huff, the top nuclear official at the Department of Energy in President Joe Biden's administration, in an email to Barron's. Huff now leads the nuclear engineering program at the University of Wisconsin.

But the government's effort to deploy small reactors has detractors too. The center-left think tank Third Way has said the pilot project is an "unhelpful diversion" from the country's larger goal of deploying 400 gigawatts of nuclear capacity by 2050, which would quintuple current capacity.

The pathway to commercial licensing and deployment for these projects remains unclear, the think tank said in an analysis.

"None of the program's pilots presently meet the basic threshold of a commercial project: secured offtake of generated power and/or heat by a private consumer, or sale and deployment of reactors to a commercial operator," the paper said. The Department of Energy is also offering billions worth of grants and loans to commercialize larger reactors, though utilities have been lukewarm about deploying them.

Some Democrats have raised concerns that the pilot reactor program is part of a broader push to reduce nuclear regulations in ways that could end up exposing the public. The Nuclear Regulatory Commission has already lost staff to government downsizing since Trump came into office, and has been changing environmental and safety rules in ways that officials say will speed up nuclear deployment.

Frank Pallone, a New Jersey Democrat who is the ranking member on the House Energy and Commerce Committee, said last month that the Department of Energy doesn't have the authority to issue a "fast-pass" to new kinds of reactors and that the Trump administration has not released details on the reactors that have been switched on.

"There is no path forward for the nuclear industry in this nation unless there is public confidence in its safety," Pallone said.

Wright, the Energy Secretary, has said that "we will take no shortcuts on safety."

Write to Avi Salzman at avi.salzman@barrons.com

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(END) Dow Jones Newswires

July 02, 2026 12:50 ET (16:50 GMT)

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