How to solve AI power shortages? The Trump administration will provide "tens of billions of dollars" for building nuclear power plants.

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To address the massive power gap brought about by the development of artificial intelligence, the Trump administration is planning to deploy "tens of billions of dollars" in national funds to finance the construction of new nuclear power plants. This move aims to ensure the energy foundation required for the AI revolution and position the government as the ultimate capital backer supporting the development of this critical industry.

According to Reuters, U.S. Energy Secretary Chris Wright explicitly stated at a conference hosted by the American Nuclear Society that the Department of Energy's Loan Program Office (LPO) will allocate the vast majority of its funds to support the construction of nuclear power plants. The LPO has hundreds of billions of dollars worth of financing assistance authority, including offering loan guarantees for projects that have difficulty obtaining bank loans.

This policy statement directly responds to the market's core concern: From where will the massive energy infrastructure investment needed to meet the enormous electricity demand of AI data centers come? Without strong government intervention, the current AI boom may prove unsustainable due to energy bottlenecks. Chris Wright set a clear goal, hoping that "when we leave office in three years and three months," we will see "dozens of nuclear power plants under construction."

This move also marks the continuation of a series of supportive nuclear energy policies. Previously, President Trump signed an executive order this May requiring the start of construction on ten large nuclear reactors by 2030. This clarified the government's strategic direction of meeting AI electricity demand through nuclear energy, with a series of debt financing agreements expected to be finalized in the coming weeks to months.

The Government Steps In to Fill the AI Energy Funding Gap

The exponential development of AI is putting unprecedented pressure on the U.S. power grid, driven by a huge funding gap.

According to previous estimates from Morgan Stanley, by 2028, the United States will need at least 36 gigawatts (GW) of additional power to support data center operations—and that number is almost certainly higher today. Based on costs of $5–6 billion per gigawatt, investment demand in energy infrastructure over the next few years will reach several trillion U.S. dollars, and this funding is not yet in place.

Chris Wright's statement means that the U.S. government will proactively take on the role of filling this gap. He said that electricity demand from the AI sector will attract "reputable suppliers" to invest billions of equity capital in building new nuclear capacity. The DOE's loan office can provide low-cost debt financing for this private capital, with a matching ratio as high as four to one. This model of public-private partnership aims to leverage and accelerate the rollout of nuclear projects.

The U.S. government's determination to promote nuclear construction also stems from the sector's relatively stagnant status quo. Currently, there are no commercial nuclear reactors under construction in the U.S. During Trump's first term, LPO's sole loan outlay was for the Vogtle nuclear power project in Georgia. Now, the government's ambitions go far beyond that.

Chris Wright hopes to see dozens of projects commence simultaneously before the end of his term, which is not only a government goal but also an expectation shared by all hyperscale cloud service providers. As OpenAI CEO Sam Altman noted, there is a general market expectation that the U.S. government will play the role of "the ultimate guarantor." If these nuclear plants cannot be built, the article quotes opinions stating that the AI bubble may burst spectacularly.

Tech Giants and Westinghouse Electric's Plans

Following government signals, the private sector has already begun actively making plans. Tech giants including Alphabet, Amazon, Meta Platforms, and Microsoft are investing billions of dollars to restart old nuclear power plants, upgrade existing facilities, and deploy new reactor technologies.

Among them, nuclear technology giant Westinghouse Electric has become a key player. Last month, the Trump administration reached an agreement with Westinghouse’s parent companies—uranium miner Cameco and Brookfield Asset Management—to invest $80 billion in building nuclear plants across the U.S. Westinghouse CEO Dan Sumner said in July that the company would use its modern AP1000 reactor design to answer the government's call, a design capable of supplying power to over 750,000 households.

Cameco COO Grant Isaac also confirmed to investors that the government has multiple tools to facilitate financing for Westinghouse’s reactors, noting there is "strong interest" in this investment of at least $80 billion.

History of Cost Overruns Drives New Opportunities for SMRs

Despite the promising outlook, the path to building large nuclear projects is full of challenges, especially regarding cost control. Westinghouse Electric has previously faced difficulties delivering AP1000 reactors on time and within budget. Notably, the company had to apply for bankruptcy in 2017 after experiencing massive cost overruns on major projects in Georgia and South Carolina, underscoring the high risks and capital-intensive nature of nuclear construction.

This history has opened doors to more cost-effective alternatives, such as small modular reactors (SMRs) developed by companies like Oklo and Nano Nuclear. These smaller-scale, lower-cost projects may effectively supplement the long construction cycles and capital intensity of large-scale reactors.

At the same time, according to terms from the October agreement, Westinghouse Electric may in the future be spun off as an independent listed company, at which point the U.S. government may become one of its shareholders, further binding government credit to project success.

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