Introduction

The global energy landscape is undergoing a profound transformation, driven by the rapid expansion of artificial intelligence (AI), data centers, and other energy-intensive technologies. The AI revolution is fueling an unprecedented surge in power demand, challenging existing energy infrastructure and prompting urgent discussions on sustainable and scalable solutions. In this context, nuclear energy has emerged as a critical component of the future energy mix, offering a reliable, carbon-free, and high-capacity power source capable of meeting the growing demands of the digital era. However, realizing the full potential of nuclear energy requires substantial capital investments, long-term financial commitments, and innovative funding mechanisms. This is where private equity can play a transformative role.

Private equity sponsors are uniquely positioned to lead the charge in financing the expansion of nuclear energy infrastructure. Unlike traditional utility investments that often rely on government funding or public markets, private equity offers a more agile and flexible approach to capital deployment. With access to significant financial resources and expertise in structuring long-term investment strategies, private equity firms can bridge the funding gap necessary to develop next-generation nuclear technologies, upgrade aging reactors, and build new facilities that align with global clean energy goals. Moreover, the extended investment horizons characteristic of private equity align well with the lifecycle of nuclear projects, which typically require decades of commitment before delivering substantial returns.

The shift toward nuclear energy investment comes at a time when energy security and decarbonization are top priorities for governments and industries worldwide. As regulatory frameworks evolve to support clean energy transitions, private equity investors have an opportunity to capitalize on favorable policy environments, tax incentives, and partnerships with technology innovators. Advanced nuclear technologies, such as small modular reactors (SMRs) and next-generation fusion projects, present scalable and economically viable solutions that can attract institutional and private capital. By strategically allocating funds toward these emerging technologies, private equity sponsors can not only drive financial returns but also position themselves as key players in the transition to a sustainable and resilient energy future.

However, investing in nuclear energy is not without its challenges. Regulatory complexities, public perception issues, and long project timelines pose significant barriers that require careful navigation. Private equity firms must adopt a strategic approach that includes robust risk management, collaboration with policymakers, and engagement with energy sector stakeholders. Additionally, fostering innovation through partnerships with nuclear technology startups and research institutions can help mitigate investment risks and accelerate the commercialization of breakthrough energy solutions.

This report explores the vital role private equity can play in nuclear energy investments, analyzing the opportunities, challenges, and strategic pathways for capitalizing on the nuclear renaissance. By leveraging financial expertise and long-term investment strategies, private equity sponsors have the potential to drive the next wave of nuclear energy expansion, ensuring a stable, clean, and efficient power supply for the industries of the future.

Global Nuclear Energy Capacity Overview

According to the International Atomic Energy Agency (IAEA), global nuclear electricity generation, measured in terawatt-hours, experienced a significant increase after 1985, reaching its peak around 2005. Since then, production levels have remained relatively stable, fluctuating within a similar range rather than continuing the previous growth trend. This stagnation can be attributed to factors such as aging reactor fleets, shifting energy policies, and increasing investments in renewable energy sources.

The data from the International Atomic Energy Agency illustrates the historical growth and stagnation of global nuclear energy capacity and the number of operational reactors. From 1954 to the mid-1980s, both the number of reactors and their total capacity grew rapidly, driven by the global expansion of nuclear power as a reliable energy source. However, after reaching a peak in the early 2000s, growth slowed considerably. The number of operational reactors has remained relatively stable, hovering around 400, while total capacity has plateaued and even slightly declined in recent years. This stagnation reflects factors such as the aging nuclear fleet, decommissioning of older reactors, rising costs of new construction, and increased competition from renewable energy sources. Despite technological advancements, the future expansion of nuclear power depends on policy decisions, economic feasibility, and public perception regarding safety and sustainability.

Most Important Countries in Nuclear Energy

The data on total net electricity capacity (in megawatts) and the number of nuclear reactors by country highlights significant disparities in nuclear energy production worldwide. The United States stands out as the dominant leader in nuclear power generation, with the highest total net electricity capacity exceeding 90,000 MW, supported by the largest number of operational reactors. This underscores the country's long-standing investment in nuclear energy as a key component of its power grid.

France also plays a crucial role in global nuclear energy, maintaining a high electricity capacity with a relatively large number of reactors. Unlike other nations, France heavily relies on nuclear power, which constitutes a significant portion of its total electricity generation, making it a cornerstone of its energy policy.

China, a rapidly growing nuclear power producer, has seen continuous expansion in both installed capacity and the number of reactors. While its current capacity is lower than that of the U.S. and France, China is aggressively increasing its nuclear infrastructure as part of its long-term energy strategy, aiming to reduce reliance on fossil fuels and meet rising electricity demands.

Russia also maintains a strong nuclear energy sector, with a substantial number of reactors contributing to a significant net electricity capacity. The country has been a major player in both domestic nuclear power generation and the export of nuclear technology, supporting the development of reactors in various other nations.

These four countries exemplify different approaches to nuclear power, with the U.S. leading in sheer capacity, France depending heavily on nuclear energy for its electricity needs, China expanding rapidly to meet future energy demands, and Russia leveraging its nuclear expertise both domestically and internationally.

In terms of nuclear energy production (TWh) and its share of total electricity generation, the United States once again leads, producing the highest amount of nuclear power globally. However, its share of nuclear in total electricity production is relatively moderate compared to other nations. France, in contrast, has one of the highest dependencies on nuclear energy, with over 60% of its electricity coming from nuclear power, reinforcing its commitment to this energy source. China, despite its growing nuclear capacity, still relies heavily on other energy sources, with nuclear accounting for a smaller percentage of its overall electricity generation. Russia maintains a strong nuclear presence, with a significant share of its electricity coming from nuclear plants, though not as dominant as in France. These variations reflect each country's energy strategy, balancing nuclear with other sources like renewables and fossil fuels.

Nuclear Energy Generation Outlook

The future of nuclear power generation presents two potential growth scenarios: a low case scenario, where current trends continue with minimal policy or regulatory changes, and a high case scenario, which assumes proactive policies and expansion efforts in nuclear energy.

According to projections by the International Atomic Energy Agency (IAEA), global nuclear capacity is expected to grow from 372 GW in 2023 to between 514 GW (low case) and 950 GW (high case) by 2050. This represents a significant potential increase, especially if countries commit to nuclear expansion as a clean energy source.

Additionally, data from the Energy Information Administration (EIA) suggests a steady increase in global installed nuclear capacity, with projections showing a rise from 403 GW in 2022 to 466 GW by 2050 under moderate growth assumptions. A 16% increase is expected by 2040, with continued growth towards mid-century.

Key contributors to this growth include China, Russia, and the United States, alongside steady commitments from Western Europe, South Korea, and India. While the U.S. remains the leader in total nuclear capacity, China is poised for the most aggressive expansion, with significant contributions expected from Russia and other developing nuclear nations.

This outlook highlights nuclear energy’s role in global decarbonization efforts, but its future depends on factors such as investment costs, public perception, technological advancements, and governmental policies. The high case scenario would significantly accelerate nuclear’s role in reducing carbon emissions, while the low case scenario suggests stagnation without substantial policy support.

Operational Efficiency in Nuclear Energy

The improved performance of existing reactors over the decades reflects significant advancements in operational efficiency, with the proportion of reactors achieving capacity factors above 90% rising from 8.7% in the 1970s to nearly 40% in recent years. This trend highlights enhanced reactor management, maintenance strategies, and technological upgrades that have maximized output without building new plants. At the same time, lower-performing reactors—those operating below 60% capacity—have declined sharply, indicating a shift toward more reliable and efficient nuclear power generation.

For Private Equity (PE) investors, this represents a strategic opportunity to support innovation in the nuclear sector. Investments in reactor modernization, digital monitoring systems, predictive maintenance, and fuel efficiency improvements can further enhance plant utilization rates and extend reactor lifespans. Additionally, funding small modular reactor (SMR) development—which promises even higher efficiency with lower operational costs—can be a game-changer for the industry's future. With sustained growth in demand for clean, stable energy, investing in performance optimization technologies and next-generation nuclear infrastructure positions PE firms at the forefront of a highly promising energy transformation.

Artificial Intelligence: The Big Impact in Power Demand Surge

The rapid expansion of artificial intelligence (AI) and digital services is driving a fundamental shift in global power consumption, particularly in data centers. AI's increasing role in computational workloads is expected to significantly contribute to future electricity demand, reshaping investment strategies across energy infrastructure, utilities, and data center operations. Based on Goldman Sachs' latest projections, data center power demand is forecasted to more than double by 2030, fueled by AI-driven workloads and the growing reliance on cloud computing.

AI's Impact on Data Center Power Demand

AI-driven workloads are accelerating the demand for electricity in data centers at an unprecedented rate. By 2030, AI-related power consumption is projected to reach over 212 terawatt-hours (TWh), accounting for a substantial portion of total data center energy usage. The total power demand from data centers, including AI and traditional workloads, is set to exceed 1,070 TWh, reflecting an annual compound growth rate (CAGR) of 15.25% from 2023 to 2030. This surge will drive significant capital investments in new energy capacity, grid enhancements, and efficiency-improving technologies to support the growing computational needs.

US Power Demand Growth and Data Centers’ Contribution

The overall U.S. electricity demand is poised for a generational growth surge, reversing the trend of near-zero demand growth observed over the last decade. By 2030, total U.S. power demand is expected to grow at a 2.4% CAGR, with data centers contributing approximately 90 basis points (0.90%) of this growth. This shift is primarily driven by the expansion of AI workloads, cloud computing, and electrification trends across industries. The data center sector alone is expected to comprise 8% of total U.S. electricity demand by 2030, up from just 3% in 2022. This will necessitate a substantial increase in power generation, transmission, and grid modernization investments.

Composition of Power Demand Growth

The composition of U.S. power demand growth highlights the increasing role of data centers in shaping the future energy landscape. Among all demand drivers, data centers are expected to be the largest single contributor, adding 0.90% to the total power demand CAGR. This surpasses contributions from residential (0.60%), industrial (0.40%), and commercial (0.40%) sectors, reinforcing the sector’s critical role in shaping energy infrastructure expansion. Utilities, power producers, and grid operators must prioritize investments in scalable and sustainable power solutions to accommodate this rising demand.

Investment and Infrastructure Implications

The data center-driven power surge is expected to require approximately $50 billion in new power generation investments through 2030, with a 60/40 split between natural gas and renewable energy sources. This will drive an additional 47 gigawatts (GW) of power generation capacity, primarily through a combination of natural gas plants, solar farms, and wind power installations. Moreover, the transmission grid will require substantial upgrades to accommodate the growing energy needs of AI-driven workloads, particularly in high-density data center hubs such as Northern Virginia, Texas, and Silicon Valley.

The unprecedented growth in AI-related energy demand presents a major investment opportunity for utilities, energy infrastructure providers, and private equity firms seeking exposure to the power sector. Companies positioned in renewable energy, natural gas infrastructure, power transmission, and grid modernization technologies are likely to benefit from sustained capital inflows in the coming decade.

Private Equity Investments in Nuclear Energy Infrastructure

S&P Global Market Intelligence. (2025). Private equity flows to advanced nuclear companies hit record high in 2024. https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/2/private-equity-flows-to-advanced-nuclear-companies-hit-record-high-in-2024-87302728 

Private equity (PE) and venture capital (VC) investments in advanced nuclear energy infrastructure have surged to unprecedented levels, driven primarily by the increasing demand for reliable, carbon-free electricity to power artificial intelligence (AI) and data centers. In 2024 alone, private equity-backed investments in advanced nuclear reached $783.3 million, surpassing the total deal value of the past 15 years combined. This dramatic increase, 13 times higher than in 2023, reflects a fundamental shift in how institutional investors perceive nuclear power, transitioning from a niche energy source to a crucial part of the future energy mix.

The number of deals in 2024 doubled compared to 2023, with six major transactions taking place, signaling a significant shift in private capital’s confidence in nuclear energy. Investment is flowing into next-generation nuclear technologies, such as small modular reactors (SMRs), Generation III+ reactors, and high-assay low-enriched uranium (HALEU) fuel technologies, which offer a scalable and lower-risk approach to nuclear deployment.

AI and Data Center Growth Accelerating Nuclear Investments

The rising energy consumption of AI and cloud computing has become a major catalyst for nuclear energy investment. AI-driven applications, including machine learning, large language models, and cloud-based computing, require vast amounts of energy, leading big tech firms and data center operators to seek stable and emissions-free power solutions. Google, Amazon, and Meta are now actively investing in nuclear reactor technology as part of their long-term energy strategy.

For example, Alphabet Inc. (Google’s parent company) partnered with Kairos Power LLC to develop 500 megawatts of nuclear capacity by 2030. Similarly, Amazon.com Inc. has aligned with X Energy and Dominion Energy Inc. to support new reactor projects. Meta, one of the largest data center operators, has indicated plans to secure up to 4 gigawatts of nuclear power to meet AI-driven electricity demand.

These partnerships highlight a paradigm shift in nuclear energy deployment, moving from traditional utilities to direct industrial applications. Historically, nuclear power plants were large-scale infrastructure projects developed by regulated utilities, but today, manufacturers, petrochemical industries, and AI-driven enterprises are taking an active role in shaping nuclear power’s future.

Government Support and Market Confidence

The rapid expansion of private capital into nuclear energy is also supported by favorable U.S. government policies, particularly the ADVANCE Act, which reduces licensing timelines and processing fees for advanced reactors. This bipartisan legislation reflects Washington's strong commitment to expanding nuclear energy, providing a more favorable regulatory environment for private-sector investment.

According to Benton Arnett, senior director of markets and policy at the Nuclear Energy Institute, investment in clean energy has long been heavily focused on renewables. However, as demand for stable, net-zero electricity grows, nuclear is emerging as the most scalable clean energy technology, positioning itself as a key component of the global energy transition.

Key Transactions in 2024

One of the largest PE-backed nuclear investments in history took place in 2024 when X Energy LLC, a leading small modular reactor (SMR) company, secured $500 million in funding. The investment was led by Amazon’s Climate Pledge Fund, with participation from Ares Management Corp., NGP Energy Capital Management LLC, and the University of Michigan.

Another major deal came from Zap Energy Inc., a fusion energy startup, which raised $130 million in a Series D funding round. Investors included Soros Fund Management LLC, Mizuho Financial Group Inc., Chevron Technology Ventures LLC, Shell Ventures, and Breakthrough Energy Ventures. These transactions demonstrate the growing confidence in next-generation nuclear solutions, particularly in SMRs and nuclear fusion as a long-term power source.

Conclusion

The unprecedented growth in private equity-backed investments in nuclear energy highlights a pivotal moment for investors looking to capitalize on next-generation energy infrastructure. As AI-driven power demand accelerates, nuclear energy has emerged as the only scalable, carbon-free baseload solution, positioning it as a cornerstone of future energy security. With small modular reactors (SMRs), advanced fission, and fusion technologies gaining traction, private capital is uniquely suited to bridge the funding gap that traditional utilities and government financing cannot fill. Regulatory tailwinds, bipartisan support, and strategic corporate partnerships—particularly from tech giants investing in nuclear to power AI-driven workloads—create a favorable market landscape for long-term returns. Private equity firms that act now stand to gain early-mover advantages, shaping the next wave of clean, stable, and high-demand energy solutions while securing strong financial upside in a rapidly expanding market.

Sources & References

Goldman Sachs. (2024). AI, data centers and the coming US power demand surge. https://www.goldmansachs.com/pdfs/insights/pages/generational-growth-ai-data-centers-and-the-coming-us-power-surge/report.pdf 

International Atomic Energy Agency. (2024). Energy, Electricity and Nuclear Power Estimates for the Period up to 2050. https://www-pub.iaea.org/MTCD/Publications/PDF/RDS-1-44_web.pdf 

International Atomic Energy Agency. (2025). In Operation & Suspended Operation. https://pris.iaea.org/PRIS/WorldStatistics/OperationalReactorsByCountry.aspx 

International Atomic Energy Agency. (2025). Nuclear Power Capacity Trend. https://pris.iaea.org/PRIS/WorldStatistics/WorldTrendNuclearPowerCapacity.aspx 

International Atomic Energy Agency. (2024). Nuclear Power Reactors in the World. https://www-pub.iaea.org/MTCD/Publications/PDF/p15748-RDS-2-44_web.pdf 

S&P Global. (2025). Private equity flows to advanced nuclear companies hit record high in 2024. https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/2/private-equity-flows-to-advanced-nuclear-companies-hit-record-high-in-2024-87302728 

US Energy Information Administration. (2021). International Energy Outlook 2021. https://www.eia.gov/outlooks/ieo/tables_side_xls.php 

US Energy Information Administration. (2025). Nuclear Energy Overview. https://www.eia.gov/totalenergy/data/monthly/pdf/sec8_3.pdf 

World Nuclear Association. (2025). Nuclear Power in the World Today. https://world-nuclear.org/information-library/current-and-future-generation/nuclear-power-in-the-world-today#key-statistics