US grants $900 million to nuclear start-up backed by Peter Thiel

The US government is spending a whopping $2.7 billion on three companies in a bid to boost domestic uranium enrichment amid rising demand for electricity from AI data centers.

The Department of Energy announced Monday that it would award $900 million each to American Centrifuge Operating and Orano Federal Services, as well as General Matter, a nuclear startup backed by billionaire investor Peter Thiel.

The funding will be distributed through work orders over the next 10 years, in what the ministry described as a “strict phased approach”.

The stated goal is to wean the country’s 94 commercial nuclear reactors off foreign, particularly Russian, fuel supplies. Russia currently controls about 44% of the world’s uranium enrichment capacity and supplies about 35% of U.S. nuclear fuel imports, according to the agency. Department of Energy.

At the same time, the funding aims to revive domestic production of high-grade low-enriched uranium (HALEU), a specialized fuel that will be needed to power advanced nuclear reactors currently in development.

“Today’s awards demonstrate that this administration is committed to restoring a secure domestic nuclear fuel supply chain capable of producing the nuclear fuels needed to power today’s reactors and tomorrow’s advanced reactors,” Energy Secretary Chris Wright said in a statement. press release.

The announcement comes as tech giants including Microsoft, Google, Meta and OpenAI race to build massive data centers to train and run increasingly powerful AI models. These installations are energy intensive and are already strain local power gridsfueling a renewed interest in nuclear power as a potential long-term solution.

The money was first allocated in a government funding bill passed in 2024 under the Biden-Harris administration. That year, six companies have been selected for contracts allowing them to compete for future work supplying enriched uranium. The administration also ban on imports of Russian nuclear fuell, although the Ministry of Energy can still grant exemptions until 2028.

On Monday, the Ministry of Energy announced which companies would benefit from the funding and which activities the funds would be linked to. American Centrifuge Operating, a subsidiary of Centrus Energy, and General Matter are responsible for establishing a national supply of HALEU. At the same time, Orano will focus on developing domestic production of more traditional low-enriched uranium.

So where does tech billionaire Thiel fit into all this? General Matter was founded last year by Scott Nolan, a partner at Founders Fund, the venture capital firm founded by Thiel. The company raised $50 million last year in a funding round led by Founders Fund, a deal that also Added Thiel to General Matter Board of Directors.

General Matter has also already enjoyed a pretty big head start. In August, the Department of Energy signed a lease allowing the startup to transform approximately 100 acres of federal land located at the former Paducah, Ky., gas diffusion plant into a private sector uranium enrichment facility. The deal also gives the company access to at least 7,600 cylinders of existing uranium hexafluoride, providing it with an immediate supply of material for future re-enrichment operations.

Construction on this facility is expected to begin this year and operations are expected to begin by the end of the decade.

The three companies did not immediately respond to Gizmodo’s requests for comment.