Nuclear startup Valar Atomics in talks to raise new funding at $6B valuation

Valar Atomics, a startup building small modular nuclear reactors (SMRs), is in talks to raise a new round of capital, according to three sources familiar with the matter. The three-year-old company is seeking a valuation of about $6 billion, with Sequoia expected to lead the deal. The Information first reported the funding discussions, including that the El Segundo, California-based startup is raising a $1 billion round.

Part of that capital has been raised previously at a lower valuation. Specifically, Valar has raised $450 million — including $340 million in equity and $110 million in debt — at a $2 billion valuation, per a Bloomberg report in March. Deals structured in multiple installments at varying valuations are becoming increasingly common in today’s AI-fueled fundraising environment.

Sequoia and Valar Atomics declined to comment. Earlier this month, the company showed that its nuclear reactor provided a small amount of power to an Nvidia AI chip. Concurrently, Valar and Nvidia announced a partnership to explore the development of nuclear energy to power future AI data centers.

Valar’s rise is playing out against a broader demand crunch. Data center electricity needs are projected to grow sharply over the next several years, and utilities in many regions are years away from adding enough new capacity. That vacuum has turned nuclear power into one of the most closely watched corners of the AI infrastructure boom.

Valar counts Palmer Luckey, the Anduril founder, and Shyam Sankar, Palantir’s chief technology officer, among its backers. Others chasing the opportunity include Kairos Power and TerraPower (backed by Bill Gates), and NuScale Power, the only SMR developer with U.S. regulatory design approval.

Valar’s technology is based on a helium-cooled, high-temperature gas reactor. The company says it eventually plans to build hundreds of SMRs to power data centers. But while SMRs are theoretically cheaper to manufacture than traditional reactors, the technology is still nascent and it’s not at all clear how long it will take to be deployed at industrial scale.

In the background, Valar has taken an aggressive legal stance toward its regulator. Last year, it joined several states and rival startups in suing the Nuclear Regulatory Commission, arguing the agency wrongly applies the same lengthy licensing process to small test reactors that it uses for full-size commercial plants. The case hasn’t been resolved, with both sides repeatedly pausing litigation, which suggests a possible settlement.

The company was founded by Isaiah Taylor, who dropped out of high school at age 16. The now-27-year-old has said he launched two startups before Valar and proudly shared that his great-grandfather worked as a nuclear physicist on the Manhattan Project.