Valar Atomics, a three-year-old startup building small modular nuclear reactors (SMRs) designed specifically to power AI data centers, is in talks to raise a new funding round that could value the company at roughly $6 billion, according to sources familiar with the matter.
The El Segundo, California-based company is seeking to raise around $1 billion in equity, with Sequoia Capital expected to lead the deal. The discussions were first reported by The Information and independently confirmed by TechCrunch through three sources close to the company.
Complex Round Structure Masks True Pricing
According to TechCrunch, part of the $1 billion has already been raised at a lower valuation. Valar has secured $450 million in total (including $340 million in equity and $110 million in debt) at a $2 billion valuation, per a Bloomberg report from March. The new $6 billion target represents a significant step-up from that figure.
This structure reflects a growing trend in AI-era venture capital. Deals are increasingly structured in multiple installments at varying valuations, sometimes executed at different times. These arrangements can create the perception that all capital was invested at a single, uniform valuation. In reality, investors in the same round may end up paying very different prices for the same company. For outsiders trying to benchmark today's hottest startups, that distinction matters more than ever.
The layered funding approach is particularly common in capital-intensive sectors like nuclear energy, where startups need to demonstrate milestones at each stage before unlocking the next tranche of investment.
AI Infrastructure Boom Drives Nuclear Interest
Valar's meteoric rise is unfolding against a backdrop of surging electricity demand from data centers. As AI workloads explode, data center power 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.
Earlier this month, Valar demonstrated that its nuclear reactor successfully provided power to an Nvidia AI chip. Concurrently with that proof-of-concept demonstration, the company and Nvidia announced a partnership to explore developing nuclear energy to power future AI data centers. The partnership signals that Big Tech is taking nuclear options seriously as the limitations of renewable energy for 24/7 data center operations become more apparent.
The company counts Palmer Luckey (founder of Anduril) and Shyam Sankar (Palantir's CTO) among its notable backers. Valar is far from the only player in this space. Competitors include Kairos Power and TerraPower (backed by Bill Gates), which are also building next-generation reactors aimed at tech and industrial customers, as well as NuScale Power, the only SMR developer with U.S. regulatory design approval.
The Technology and the Road Ahead
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 around the world. SMRs are essentially miniaturized, factory-built power plants designed to be cheaper and faster to deploy than traditional nuclear reactors. But while the theory is compelling, the technology is still nascent, and it is not yet clear how long it will take to reach industrial-scale deployment.
The company has also taken an aggressive posture toward its regulator. Last year, Valar joined several states and rival startups in suing the Nuclear Regulatory Commission, arguing that the agency wrongly applies the same lengthy licensing process to small test reactors that it uses for full-size commercial plants. The case has not been resolved, with both sides repeatedly pausing litigation, suggesting a settlement may be in the works.
Valar was founded by Isaiah Taylor, who dropped out of high school at age 16. Now 27, Taylor has said he launched two startups before Valar, and has noted that his great-grandfather worked as a nuclear physicist on the Manhattan Project. If the company closes this round at a $6 billion valuation, it will mark one of the most dramatic ascents in the AI infrastructure space, reflecting the extraordinary appetite for solutions to the data center energy crisis.
Sequoia and Valar Atomics both declined to comment on the funding discussions.