Trump to spend $80 billion to restart the high-cost AP1000 large nuclear power project, with Japan footing the bill.

To address the soaring electricity demand brought about by the explosion of the artificial intelligence industry, the U.S. government plans to invest $80 billion to restart its long-stalled domestic nuclear power sector, and is betting on Westinghouse Electric's "AP1000" large reactor technology, which has been criticized in the past for out-of-control costs.

This ambitious plan will use funds from a trade agreement between the U.S. and Japan, aiming to help the U.S. break free from the history of repeated delays and cost overruns in nuclear power construction, and establish energy dominance in the AI era.

According to the Wall Street Journal, leveraging part of the proceeds from the U.S.-Japan trade agreement, the U.S. government announced in October this year a plan to cooperate with Westinghouse Electric and its owners Brookfield Asset Management and Cameco. The plan proposes to build eight AP1000 reactors at four locations, marking the largest scale of nuclear power construction in the U.S. in decades.

This strategy marks a significant shift in U.S. nuclear policy: previously, market focus was mostly on small modular reactors (SMRs), but now, driven by massive AI data center energy consumption, large reactors with a single-unit capacity of about 1,100 megawatts have regained favor.

As the financial backing for the plan, Japan has committed up to $550 billion in investment into critical U.S. infrastructure, and the current round of nuclear power investment stems from this. Under the agreement structure, the U.S. government is not only a funder, but will also profit from the project. Once Westinghouse Electric's profits exceed $17.5 billion, the U.S. government will receive a 20% share of the excess portion; in the future, Westinghouse Electric may even be split off as a publicly listed company under government shareholding.

However, this massive bet faces extremely high execution risks. The last major nuclear project in the U.S.—the Vogtle nuclear power plant in Georgia—ended up costing over $30 billion, more than twice the original budget, and was completed seven years later than planned. Nevertheless, the Trump administration is still attempting to restart this industry, which had deterred investors, through government endorsement and standardized construction, aiming to keep the cost of a single reactor around $10 billion.

Betting on AI's energy consumption and energy dominance

With the artificial intelligence boom breaking decades of flat U.S. electricity demand, power shortages have become a key bottleneck restricting AI development. Westinghouse Electric interim CEO Dan Sumner said in an interview that these reactors will help the U.S. win the AI race and achieve the president’s "energy dominance" agenda.

Sumner stated that Westinghouse Electric has the right technology, and this is a feasible solution to America's power needs. Previously, the "nuclear renaissance" in the early 2000s failed due to slow demand growth and the shale gas boom providing cheap natural gas. Sector & Sovereign Research analyst Hugh Wynne believes that when demand grows slowly, small reactors make more sense, but in the current environment, large reactors better fit market needs.

If implemented, this plan would bring unprecedented certainty for Westinghouse Electric and its supply chain. Company executives said the planned reactors would be sufficient to power medium-sized cities or large AI data centers.

Japanese Financial Support and Profit Sharing Mechanism

The core of this deal lies in leveraging external capital to drive domestic infrastructure construction. The transaction is supported by Japan’s investment plan in U.S. critical infrastructure. Brookfield Renewable Partners co-president Wyatt Hartley said the pool of funds gained via the trade agreement will benefit both U.S. industry and Japanese manufacturing.

Hartley said the final structure benefits Westinghouse Electric directly, and also provides the American public with an opportunity to participate in various profit-sharing schemes. Brookfield and Cameco previously acquired Westinghouse Electric—emerging from bankruptcy protection—for about $7.88 billion, and at the time did not assign any value to new reactor construction, only valuing the fuel manufacturing and services business. Now, as policy winds shift, its valuation logic may be reshaped.

Challenging the "Cost Curse" and Standardized Construction

Controlling the "overnight cost" (excluding financing) of a single reactor below $10 billion means overcoming the industry's long-standing fatal flaws: spiraling costs and schedule delays.

Vogtle reactor units 3 and 4 are the only AP1000 units completed in the U.S.; originally scheduled for completion in 2016 and 2017 at a cost of $14 billion, they only came online in 2023 and 2024, with total costs soaring to over $30 billion. Severe cost overruns led Westinghouse Electric's former parent company Toshiba to file for bankruptcy in 2017. A similar South Carolina project was abandoned in 2017 after spending more than $9 billion. By contrast, China currently has four operating AP1000 units and is building its own version, with another 14 under construction.

Cameco President and Chief Operating Officer Grant Isaac said that the AP1000 no longer faces technical, licensing, fuel supply, or regulatory risks; the only risk left is project execution. The current goal is to minimize risk through standardization, sequencing, and simplification—"just doing the same thing again and again."

Execution Details Still Unclear

Despite the grand vision, there remains uncertainty in implementation. Jacopo Buongiorno, MIT professor of nuclear science and engineering, notes that the $80 billion scale is indeed suitable for accelerating nuclear development, but there is still a lack of details about siting, participating companies, schedules, and workforce. He thinks the current statements are encouraging, but without substance, remain a castle in the air.

According to an executive order in May this year, the Trump administration proposed a plan to start construction of 10 large reactors by 2030. In addition to new projects, existing facilities are also being restarted. Currently, Michigan, Pennsylvania, and Iowa are working to restart reactors. In South Carolina, utility Santee Cooper is in talks with Brookfield to sell its partially completed AP1000 project, and if the deal goes through, these units may be completed specifically to power AI data centers.

Sumner believes that the U.S. government’s intervention as a "second mover" sends a strong signal to manufacturers, suppliers, and construction companies that orders will keep coming, which is vital for building confidence and driving down costs.

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