Every AI chatbot query, every streamed movie and every cloud backup runs on a building full of servers, and those buildings are getting hungry. Utilities, chip makers and tech giants are now asking a question that sounded niche a few years ago: could a new generation of small nuclear reactors supply the steady, around-the-clock power that data centers need?
The answer, as of late October 2026, is “maybe, but not soon.” This guide explains what small modular reactors (SMRs) actually are, which deals and approvals are real, and what to realistically expect over the next decade, without the hype that often surrounds the topic.
Why data centers suddenly need so much power
Data centers already use roughly 2% of global electricity, according to a review published by the American Bar Association, and that demand is projected to climb by around 50% by 2027. AI is a big reason. Training and running large models requires dense racks of power-hungry chips that run day and night.
That creates a particular problem for the grid. Solar and wind are valuable, but a server hall cannot pause when the sun sets. Operators want what engineers call “firm” power: electricity that is available 24 hours a day, whatever the weather. Natural gas currently fills much of that gap, and nuclear is the main carbon-free alternative that fits the bill.
The same ABA review cites a PwC projection that data center investment could reach $1 trillion by 2027. With that much money on the line, securing reliable electricity has become a strategic priority, not an afterthought.
What a small modular reactor actually is
A traditional nuclear plant is a giant, bespoke construction project. An SMR is a smaller reactor designed to be built mostly in a factory and shipped to a site in pieces. The “modular” part is the key idea: if you build the same design repeatedly, costs and schedules should improve with practice, much like aircraft or cars.
Here is how SMRs differ from conventional plants in broad terms:
- Size: smaller output per unit, so a site can add units gradually as demand grows.
- Construction: more factory fabrication and less one-off field work, which is meant to reduce delays.
- Siting: smaller footprints may allow placement near industrial users, including data center campuses.
- Safety design: many designs rely on passive safety features that work without operator action, though each design still has to prove this to regulators.
It is worth stressing that “small modular reactor” is a category, not one product. Some designs use water cooling like today’s reactors, while others use sodium or other coolants. They are at very different stages of maturity.
The deals and approvals that are real
Plenty of headlines blur announcements and actual progress. Here is what the ABA review documents, which is a useful reality check:
- Google and Kairos Power: Google agreed to procure 500 MW of advanced reactor capacity by 2035, with the first reactor scheduled to come online in 2030.
- Kairos Hermes 2: the Nuclear Regulatory Commission (NRC) granted a construction permit for this non-commercial test reactor, the first SMR to receive one.
- NuScale: the NRC issued a Standard Design Approval for the 462 MW US460 design in May 2025, ahead of schedule.
- TerraPower: its 345 MW Natrium sodium-cooled reactor in Kemmerer, Wyoming, targets commercial operation in 2031, with a construction permit decision expected after mid-2026.
- Long Mott Energy and TVA: both filed construction permit applications in 2025.
Meta also signed a power purchase deal tied to an existing Illinois nuclear plant. That is useful context, but it is conventional nuclear power rather than an SMR.
The headline takeaway: no commercial SMR is operating in the U.S. yet, according to the same review. A design approval or a test reactor is meaningful progress, but it is not electricity flowing to a data center.
A concrete scenario: a data center in 2032
Imagine a regional cloud company planning a new campus. Its AI workloads need steady power, and the local grid cannot guarantee enough capacity without a long wait for new transmission lines.
In the best case, the company signs a long-term agreement with an SMR developer whose design has already received regulatory approval. A reactor is built near the campus, or at a nearby site connected by dedicated lines, and begins delivering power years later. Meanwhile, the company keeps a mix of grid power, renewables and backup generation so it is not betting everything on one new technology.
In the more cautious case, licensing takes longer than hoped, the first-of-a-kind unit costs more than planned, and the company leans on gas and the existing grid for several additional years. Both outcomes are plausible, which is why most operators are pursuing several energy options at once rather than a single bet.
What could slow things down
SMRs solve a real problem, but they face real hurdles. Understanding them helps you read future headlines more critically.
- Licensing uncertainty: the ABA review points to the need for regulatory predictability. The NRC’s new advanced reactor licensing rule is expected in 2027.
- First-of-a-kind costs: the cost savings of factory production only arrive after many units are built. Early projects are typically the most expensive.
- Supply chains: nuclear-grade components and specialized fuel are not easy to scale quickly.
- Construction risk: Vogtle Units 3 and 4, large reactors that came online in 2023 and 2024, took over 15 years to license and build because of delays. SMR developers argue their approach avoids this, but it has yet to be proven at commercial scale.
It is also fair to say that the sources reviewed here give no per-unit cost figures for SMRs, and you should be wary of anyone who quotes a precise price today without a source. Estimates vary widely and will keep changing.
Policy tailwinds and the money behind them
Government policy has leaned toward faster nuclear deployment. The ADVANCE Act, signed in July 2024, aims to streamline licensing and lower SMR licensing costs. Executive Order 14300, dated May 23, 2025, sets more aggressive deadlines for NRC decisions. The Department of Energy also announced $900 million in cost-sharing funds for milestone-based SMR projects in late 2024.
Over two dozen other companies have contacted the NRC about licensing SMR or microreactor designs, so the pipeline is crowded. Not all of them will succeed, and that is normal for an emerging industry. The likely outcome is a handful of designs that reach commercial scale, with others folding or being acquired.
What this means for you
If you are an everyday reader, you are unlikely to see an SMR in your neighborhood soon. But the trend still touches you in a few practical ways:
- Your electric bill: data center demand is a growing factor in utility planning, so local rate discussions may mention it.
- AI service costs: power is a major operating expense for cloud providers, so energy supply influences how cheaply AI tools can be offered.
- Investing: nuclear-related stocks can swing sharply on announcements. A design approval is not revenue, so treat headlines carefully and do your own research.
- Climate goals: firm, carbon-free power could help tech companies keep emissions targets while growing, if projects arrive on time.
How to read the next nuclear headline
Because the field moves in stages, it helps to know the ladder a project climbs. A company first announces a design, then seeks design approval, then applies for a construction permit, then builds, then applies for an operating license, and only then sells electricity. Each rung can take years, and an announcement at one rung says little about the next.
When you see a new deal, ask three quick questions. Is it a binding purchase agreement or a memorandum of understanding? Has the specific reactor design been reviewed by the NRC? And does the timeline include a date for first power, or only a vague “by the 2030s”? Clear answers usually signal a serious project, while fuzzy ones deserve patience.
Finally, remember that nuclear is only one piece of the puzzle. Efficiency gains in chips, smarter cooling, better grid connections and more renewable and storage capacity will all shape how the data center boom is powered. SMRs may become an important part of that mix, but they are unlikely to be the whole answer.
Key takeaways
- Data centers use about 2% of global electricity, with demand projected to rise roughly 50% by 2027.
- SMRs are factory-built reactors meant to deliver steady carbon-free power at lower risk than giant plants.
- Real milestones exist: NuScale design approval (May 2025), a Kairos test reactor permit, and Google’s 500 MW agreement.
- No commercial SMR operates in the U.S. yet; first units are expected around 2030 to 2031 at the earliest.
- Costs, licensing and supply chains remain the big unknowns, so treat bold timelines with caution.
Frequently asked questions
Are small modular reactors safe?
Designs are required to meet NRC safety standards before they can be built and operated. Many rely on passive safety features, but each design must demonstrate its claims to regulators, and no commercial U.S. SMR has yet operated long enough to provide real-world track records.
When will an SMR power a data center in the U.S.?
Not yet. Google’s agreement targets the first Kairos reactor coming online in 2030, and TerraPower’s Wyoming project targets 2031. Schedules for first-of-a-kind projects often slip, so treat these as targets, not guarantees.
Will SMRs make electricity cheaper?
That is the hope, but it is unproven. Factory production could lower costs over time, but early units are expected to be expensive, and no reliable per-unit figure exists yet. Verify any specific price claim against a primary source.