Texas A&M University System is positioning itself as a testing ground for small modular reactors (SMRs) to address the state’s rapidly growing electricity demands driven by artificial intelligence data centers, population growth, and extreme weather events. The university announced Tuesday that it’s leasing land to four nuclear startups—Kairos Power, Natura Resources, Terrestrial Energy, and Aalo Atomics—specializing in SMRs, which are approximately one-third the size of traditional nuclear power plants.
The initiative comes as tech giants desperately search for low-carbon, 24/7 electricity sources to power data centers with the computing capacity required for AI operations. Texas’ main grid operator forecasts that power demand will nearly double by 2030, driven primarily by data centers and crypto-mining facilities requesting grid connections. This trend mirrors developments in Virginia, Arizona, and Nebraska.
No commercial SMR has been built in the United States to date, with only a few existing in Russia and China. Forecasts suggest the first U.S. SMR might come online anywhere from five to 15 years from now. Joe Elabd, vice chancellor for research at Texas A&M, emphasized that “energy demand, not just in the state of Texas, but across the nation and globally, is rising at a very fast pace, particularly as companies construct data centers.”
The proposed Texas A&M site is large enough to accommodate multiple SMRs with a combined output exceeding one gigawatt—sufficient to power approximately 200,000 homes. The university has requested $200 million from Texas legislators for this energy proving ground.
The announcement follows President Donald Trump’s formation of Stargate, a joint venture between Oracle, OpenAI, and SoftBank to build AI data centers, including facilities in Texas. While the Chinese AI company DeepSeek’s promise of cheaper, more energy-efficient models temporarily sent nuclear stocks plunging on January 27, they have since recovered.
Texas Governor Greg Abbott outlined a strategy in November with seven recommendations to make Texas a leader in advanced nuclear power, including establishing a new state office and energy fund dedicated to supporting such projects. Both Kairos Power and Natura Resources have received construction permits from the Nuclear Regulatory Commission for demonstration SMRs, though not yet for commercial-scale plants.
Key Quotes
Hopefully we’re the first of many places that have a proving ground for new energy technologies. Energy demand, not just in the state of Texas, but across the nation and globally, is rising at a very fast pace, particularly as companies construct data centers.
Joe Elabd, vice chancellor for research at Texas A&M, emphasized the urgency of developing new energy solutions to meet the explosive growth in electricity demand driven by AI data center construction across the United States and globally.
We need to demonstrate that you can license an advance reactor. That’s been one of the big concerns, particularly from the investment community.
Douglass Robison, founder and President of Natura Resources, highlighted the critical regulatory hurdle facing SMR development. Proving that advanced reactors can successfully navigate the licensing process is essential for attracting the investment needed to scale this technology for AI infrastructure.
Until now, there hasn’t been a suitable site for building clusters of nuclear reactors that can supply the power needed for AI innovation and other projects.
University officials explained that the Texas A&M site addresses a fundamental infrastructure gap—providing a location where multiple SMRs can be clustered to generate the massive amounts of electricity required by AI computing operations.
Our Take
This partnership represents a high-stakes bet on nuclear energy as the solution to AI’s power crisis. The timing is particularly significant given the Stargate announcement and the broader industry recognition that AI’s growth trajectory is unsustainable without new baseload power sources. What’s notable is the convergence of state government support, university research infrastructure, and private nuclear startups—a model that could be replicated nationwide.
However, the 5-15 year development timeline poses serious questions about whether SMRs can actually meet near-term AI infrastructure needs. Tech companies are building data centers now, not in a decade. This gap may force continued reliance on natural gas plants, undermining climate commitments. The NuScale cancellation in 2023 serves as a cautionary tale about cost overruns derailing SMR projects. Texas A&M’s success or failure will likely determine whether advanced nuclear becomes a viable pathway for powering AI’s future or remains a promising technology that arrives too late.
Why This Matters
This development represents a critical intersection of AI infrastructure needs and clean energy innovation. As artificial intelligence models become increasingly sophisticated and power-hungry, the technology industry faces a fundamental challenge: securing reliable, carbon-neutral electricity at unprecedented scales. Texas A&M’s initiative could establish a blueprint for meeting AI’s voracious energy appetite without exacerbating climate change.
The doubling of Texas power demand by 2030 illustrates how AI is reshaping energy infrastructure nationwide. Major tech companies like Google, Oracle, and OpenAI are investing billions in data centers, but their sustainability commitments require alternatives to fossil fuels. SMRs promise 24/7 baseload power without emissions—a unique advantage over intermittent renewables.
However, significant uncertainties remain. The 5-15 year timeline for commercial deployment may not align with AI’s rapid growth trajectory. Previous SMR projects like NuScale’s cancellation in 2023 demonstrate real risks of cost overruns and delays. If successful, this partnership could accelerate America’s advanced nuclear industry and provide a model for powering the AI revolution sustainably. If it fails, it may force the tech industry toward fossil fuels, undermining climate goals.
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Source: https://www.businessinsider.com/nuclear-startups-test-clean-power-ai-texas-a-and-m-2025-2