Valar Atomics seeks $6 billion valuation in talks for $1 billion nuclear funding round
The El Segundo-based firm has already secured part of its target capital at a lower valuation, highlighting complex fundraising structures in the AI infrastructure sector.
Nuclear startup Valar Atomics is in advanced talks to raise $1 billion in new capital at a valuation of approximately $6 billion, with Sequoia Capital expected to lead the investment round. The three-year-old company, based in El Segundo, California, is developing small modular reactors (SMRs) designed to provide power for data centres amid a growing energy crunch in the artificial intelligence sector.
The funding structure reflects a trend of multi-stage capital raises that can obscure the true entry price for investors. According to sources familiar with the matter, part of the $1 billion target has already been secured at a significantly lower valuation of $2 billion. Prior to this current round, Valar had raised $450 million, comprising $340 million in equity and $110 million in debt, at that earlier $2 billion valuation.
Valar’s technology centres on helium-cooled, high-temperature gas reactors. The company recently demonstrated its reactor providing a small amount of power to an Nvidia AI chip. Concurrent with this proof-of-concept, Valar and Nvidia announced a partnership to explore the development of nuclear energy to power future AI data centres. The startup, founded by 27-year-old Isaiah Taylor, plans to eventually build hundreds of these units to meet projected electricity demand.
The deal comes as utilities face years-long delays in adding new capacity, turning nuclear power into a focal point for AI infrastructure investment. Valar counts prominent backers such as Palmer Luckey, founder of Anduril, and Shyam Sankar, chief technology officer of Palantir, among its investors. The company competes with established rivals including Kairos Power, TerraPower, and NuScale Power, which holds US regulatory design approval for an upgraded reactor.
Regulatory hurdles remain a significant factor for the startup. Valar is currently engaged in litigation against the Nuclear Regulatory Commission (NRC), arguing that the agency incorrectly applies lengthy licensing processes for full-size commercial plants to small test reactors. The litigation has been paused by both sides, suggesting a potential settlement is in progress. Sequoia and Valar Atomics declined to comment on the ongoing negotiations.
