Valar Atomics is in talks to raise as much as $1 billion in new equity funding at a valuation of approximately $6 billion, according to people familiar with the discussions. Sequoia Capital is expected to lead the deal, which would provide the nuclear startup with more capital to develop small reactors for data centers and industrial customers.
The Information first reported that Valar was seeking $1 billion at a $5 billion pre-money valuation. The discussions remain ongoing, and the final size, structure and valuation could change.
Valar and Sequoia Capital declined to comment on the reported talks.
Earlier Capital Was Raised at a Lower Valuation
Part of the reported $1 billion may include capital that Valar previously raised at a lower valuation. Bloomberg reported in March that the company secured $450 million, consisting of $340 million in equity and $110 million in debt, at a valuation of approximately $2 billion.
Fundraising rounds are increasingly being completed through multiple installments, with different investors sometimes buying shares at different valuations. This can make headline funding figures appear as though all the capital was committed at one price, even when the financing was assembled over several stages.
If the new terms are completed, Valar’s reported valuation would triple from the level attached to its earlier financing. The company was founded in 2023 by chief executive Isaiah Taylor and is based in El Segundo, California.
Its backers include Anduril founder Palmer Luckey and Palantir chief technology officer Shyam Sankar.
Startup Targets Power Demand From AI Data Centers
Valar is developing factory-built, high-temperature gas reactors that use helium as a coolant, graphite as a moderator and TRISO nuclear fuel. The company plans to deploy clusters of standardized reactors at large sites serving data centers, heavy industry and hydrogen production.
Its strategy is based on manufacturing the same reactor design repeatedly rather than developing individual plants as one-off infrastructure projects. Valar says this approach could reduce costs and make nuclear power easier to deploy at scale.
Earlier this month, the company demonstrated a reactor producing a small amount of electricity for an Nvidia AI chip. Valar and Nvidia also announced plans to explore nuclear power for future AI data centers.
The demonstration followed Valar’s Project NOVA criticality milestone, which the company said provided data for the continued development of its high-temperature gas reactor design. The experiment did not involve full-temperature operation or a grid connection.
Demand for nuclear energy has risen as technology companies search for reliable power for AI infrastructure. Utilities in many regions face long waits to connect new data centers, while solar and wind projects require storage or other sources of dependable generation.
Commercial Deployment Remains Unproven
Small modular reactors are intended to be cheaper and faster to build than conventional nuclear plants because components can be standardized and manufactured in factories. However, few designs have reached commercial operation, and it remains unclear whether the expected cost and construction advantages will materialize at scale.
Valar has also challenged how small reactors are regulated. The company joined other startups and several states in a lawsuit against the Nuclear Regulatory Commission, arguing that low-power experimental reactors should not face the same lengthy licensing process as large commercial nuclear plants.
The company’s official explanation of the lawsuit argues that current regulations slow testing and make it harder for U.S. reactor developers to compete internationally. The litigation has been paused several times, suggesting the parties may be discussing a resolution.
Valar says it ultimately wants to build hundreds of reactors to serve power-intensive industries. The proposed financing would give it significantly more capital to pursue that goal, but the company still has to prove that its reactor technology can move from early testing to safe and economical commercial deployment.
Featured image credits: Magnific.com
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