Westinghouse Electric will get a contract to build at least $80 billion of new nuclear reactors in conjunction with the U.S. government to power artificial intelligence (AI) data centers, according to three companies involved in the project (Westinghouse Electric, Cameco, and Brookfield Asset Management). According to the Washington Examiner, the investment would be enough to fund eight AP1000 power plants built by Westinghouse, which typically consist of large reactors that generate more than 1,000 megawatts of power. The deal could also result in a mix of larger facilities and small modular reactors, which would be able to come online faster. The U.S. government is expected to help Westinghouse find sites and secure federal approval for the new reactors and may also offer loan guarantees under the partnership agreement. It would also share in any profits and have a stake in the company. The Trump administration’s goal is to quadruple U.S. nuclear capacity by 2050.
As reported by the Washington Examiner, part of the funding will come from a $550 billion trade agreement with Japan, signed by President Trump and Japanese Prime Minister Sanae Takaichi during Trump’s recent trip to Asia. The deal directs up to $332 billion toward strengthening U.S. energy infrastructure, including the construction of AP1000 and small modular reactors (SMRs) through Westinghouse. It also sets aside funding for additional SMR projects in partnership with GE Vernova and Hitachi.
The cost of nuclear power has skyrocketed in the United States to the point that if the nuclear plants cost as much as the AP1000s previously built in the United States, the $80 billion would only finance five, rather than eight, power plants. One of the big challenges for nuclear power is achieving profitability, as it is the second-most expensive source of electricity, behind offshore wind. Furthermore, while there is hype for SMRs that can be built more quickly, none of their designs have been approved by the Nuclear Regulatory Commission (NRC), whose regulations have been a detriment to nuclear power in this country.
U.S. vs. China’s Nuclear Progress
According to the New York Times, in the last 13 years, the United States built just two reactors at Vogtle in Georgia, while China has commissioned 13 reactors and has another 33 under construction — nearly as many reactors under construction as the rest of the world combined. The two Vogtle reactors were $17 billion over budget and among the costliest ever built, taking 11 years and totaling $35 billion. China, however, has overcome the construction delays and cost overruns that have slowed Western efforts to expand nuclear power and is making breakthroughs in next-generation nuclear technologies, wanting to become a supplier of nuclear power to the world. China constructs reactors in just five to six years, twice as fast as Western nations. A report from the Information Technology and Innovation Foundation claims that China is 10 to 15 years ahead of the United States in its ability to deploy next-generation reactors across the country.
Via the NYT, while nuclear construction costs in the United States skyrocketed after the 1960s, they fell by half in China during the 2000s and have since stabilized. China provides three state-owned nuclear developers with cheap government-backed loans to build new reactors, which have significant value as financing can be one-third of the costs for nuclear plants. The Chinese government also requires electric grid operators to buy some of the power from nuclear plants at favorable rates. China’s nuclear companies build only a handful of reactor types, and they do it continuously, allowing developers to perfect the construction process, streamline licensing, and simplify supply chains. China’s national mandate to expand nuclear power incentivizes companies to invest in domestic factories and a dedicated engineering workforce. Near Shanghai, giant reactor pressure vessels are being continuously forged by teams of specialized welders, ready to be shipped to new projects. China is expected to have the world’s largest nuclear power capacity by 2030, surpassing the United States.
As reported by the NYT, China is positioning itself to dominate the global nuclear energy market. Chinese firms have already built six reactors in Pakistan and are eyeing additional export opportunities around the world. At home, China has developed what it calls the world’s first “fourth-generation” reactor — a gas-cooled design capable of supplying heat and steam for industrial use as well as electricity. Beijing is also investing in alternative nuclear technologies, including thorium reactors and systems that recycle spent fuel, as the country looks to overcome limited domestic uranium supplies and support an ambitious reactor expansion.
Restarting Decommissioned Nuclear Plants
Via the Washington Examiner, large technology firms and utility companies are turning to nuclear power to secure more reliable and stable energy on the U.S. grid. In addition to building new nuclear plants, some tech majors are backing the restart of retired nuclear plants decommissioned in the last decade. Recently, Google announced it would partner with NextEra Energy to restart the Duane Arnold Energy Center in Iowa by 2029 to power its AI operations. The plant, which closed in 2020, would be the third decommissioned nuclear facility in the United States to come back online. The Palisades Nuclear Plant in Michigan is set to be the first later this year, with Three Mile Island following closely behind, with a 2027 restart date.
Analysis
The need for reliable power to fuel AI data centers has led to a newfound emphasis on nuclear power, with the Trump administration attempting to lead the way. Alongside this investment in Westinghouse, President Trump signed four executive orders in May that directed the NRC to speed up the licensing process for new reactors. Speeding up this permitting process for nuclear power should help the U.S. cut into China’s lead on nuclear power, but the U.S. should be wary of pursuing the same level of state-led investment in nuclear power as China.
The core danger of this state-capitalist approach is that it replaces sound commercial judgment with political expediency, as exemplified by companies increasingly basing decisions on government subsidies rather than market forces. Moreover, state-led investment introduces broader systemic risks that will inevitably distort private decision-making: businesses may alter practices to chase or avoid government aid, investors may shun critical, yet politically targeted industries, and future administrations will have a dangerous precedent to support favored companies and industries. Ultimately, government involvement in investment decisions undermines what makes America great: competitive markets that reward risk-taking and innovation while punishing mistakes and inefficiency.
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