The U.S. government is shelling out a whopping $2.7 billion to three companies in an effort to strengthen domestic uranium enrichment, amid surging electricity demand from AI data centers.
The Department of Energy announced on Monday that it will 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 task orders over the next 10 years, under what the department described as a “strict milestone approach.”
The stated goal is to wean the nation’s 94 commercial nuclear reactors off foreign fuel supplies, particularly Russia. Russia currently controls roughly 44% of the world’s uranium enrichment capacity and supplies about 35% of U.S. nuclear fuel imports, according to the Energy Department.
At the same time, the funding is meant to jumpstart domestic production of high-assay low-enriched uranium (HALEU), a specialized fuel that will be required to power advanced nuclear reactors currently in development.
“Today’s awards show that this Administration is committed to restoring a secure domestic nuclear fuel supply chain capable of producing the nuclear fuels needed to power the reactors of today and the advanced reactors of tomorrow,” Energy Secretary Chris Wright said in a 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. Those facilities are energy-hungry and are already putting strain on local electricity grids, fueling renewed interest in nuclear power as a potential long-term solution.
The money was first allocated in a government funding bill passed in 2024 during the Biden-Harris administration. That year, six companies were selected for contracts that enabled them to compete for future work to supply enriched uranium. The administration also banned imports of Russian nuclear fuel, though the Energy Department can still issue waivers through 2028.
On Monday, the Energy Department announced which companies would be getting the funding and what work the funds would be tied to. American Centrifuge Operating, a subsidiary of Centrus Energy, and General Matter are tasked with building a domestic supply of HALEU. Meanwhile, Orano will be focusing on expanding the nation’s production of more traditional low-enriched uranium.
So where does tech billionaire Thiel fit into all of 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’s board.
General Matter has also already been given a pretty big head start. In August, the Energy Department signed a lease allowing the startup to turn roughly 100 acres of federal land at the former Paducah Gaseous Diffusion Plant in Kentucky into a private-sector uranium enrichment facility. The agreement also gives the company access to at least 7,600 cylinders of existing uranium hexafluoride, effectively handing it a ready supply of material for future reenrichment operations.
Construction for this facility is expected to start this year, with operations planned to start by the end of the decade.
The three companies did not immediately respond to requests for comment from Gizmodo.