Some of the Trump administration’s policy support is specifically geared at fostering faster commercialization of SMRs. In addition to the incentives that apply to traditional nuclear fission, the administration has ordered the deployment of an SMR at a Department of Energy facility by November 2027 and at a military base by September 2028. In having the government take on the regulatory and technical risks associated with early deployments, the administration can help provide real-world validation of the technology that facilitates further investments. Jumpstarting deployment can also help create demand for parts of the nuclear fuel supply chain that have been underinvested in.
The advantages of SMRs are revealed in their nomenclature. SMRs are significantly smaller than nuclear fission plants, with the largest SMRs around 300MW. They are also modular: unlike giant fission reactors, SMR components can be mass produced in factories and then assembled on site. In theory, this should make SMRs cheaper and faster to build than traditional fission plants, translating to less risk and easier financing. Their smaller size also means siting is more flexible, which could make them easier to deploy for behind-the-meter or off-grid loads, including potentially AI data centers. Most SMRs are also advanced reactors, meaning they use innovative technologies to replace the light-water cooling used in traditional fission reactors. Finally, many (but not all) SMR designs use a different type of nuclear fuel called High-Assay Low-Enriched Uranium (HALEU). HALEU fuel uses uranium that is enriched between 5-20%, higher than the LEU that fission reactors use. Higher enrichment translates to higher efficiency, meaning plants can run for significantly longer before refueling is needed.
As with most new technologies, commercialization is not without its challenges. Goldman Sachs Research estimates that the levelized cost of energy (LCOE) for SMRs is likely to be cheaper than that for gas-powered or coal generation once the technology hits a steady state, but estimating construction costs for nascent technology is inherently difficult. Both Russia and China’s operational SMRs experienced cost overruns of 300-400% over initial estimates, and this is likely to be typical until economies of scale develop.
The supply chain for HALEU is another threat to the commercialization of SMRs in the United States. Today, Rosatom’s subsidiary Tenex is the only commercial producer of HALEU in the world. Uncertainty over the availability of HALEU has held back some companies from committing to their reactor designs, which in turn impedes investment in domestic HALEU production. US attempts to ramp up domestic supplies began in 2019, when the Department of Energy awarded Centrus Energy Corporation a contract to begin enriching HALEU with government-owned assets. Today, all domestic HALEU production is controlled by the Department of Energy, which can then award part of its stockpiles to advanced nuclear companies. Fostering a fulsome domestic industry will eventually require investments in specialized facilities for commercial production, given the higher risks associated with higher enrichment.
The Next Wave: Fusion Could Revolutionize Nuclear Energy
Beyond fission, the Trump administration has also indicated interest in another advanced form of nuclear energy—fusion. The Department of Energy ‘s secretarial order designed to “unleash the golden era of American energy dominance,” included increasing R&D support for fusion energy. The administration’s One Big Beautiful Bill has preserved the Inflation Reduction Act’s “technology-neutral” production and investment tax credits for nuclear power (with tighter Foreign Entity of Concern Provisions) and added a nuclear energy bonus tax credit for advanced nuclear facilities.
Though also a form of energy derived from the nuclei of atoms, fusion is drastically different from fission and circumvents the historical concerns that fission faces. While nuclear fission involves splitting atomic nuclei, fusion is the reaction in which two light atomic nuclei instead combine to form a single heavier one, which releases massive amounts of energy–the same process that occurs in the sun. Fusion produces four times more energy per unit of mass than fission, and nearly four million times more energy than oil or coal. Harnessing a fusion reaction on earth requires stabilizing an ionized gas called plasma at extreme pressures and temperatures of over 100 million degrees Celsius. Unlike with nuclear fission, the difficulty of maintaining these conditions means there is no risk of a runaway chain reaction or meltdown risk, because any disruption to these conditions stops the fusion reaction. And unlike the enriched uranium used to power fission, most of the fuels used in fusion are far less radioactive, or not radioactive at all, and cannot be weaponized. These attributes insulate fusion energy from some of the risks associated with fusion. As such, the US Nuclear Regulatory Commission has declared it will regulate fusion energy under the same regulatory regime as particle accelerators, rather than under the stricter regime that covers nuclear fission.
Despite these advantages, fusion technology isn’t quite here yet. There are several technological and engineering challenges that need to be overcome before fusion energy is commercialized: maintaining plasma stability at high temperatures; developing materials for the reactor that can withstand the heat and potential radiation of the fusion reaction; reducing fusion’s LCOE; and, depending on the fuel type used, managing the fuel cycle. Fusion companies are approaching these challenges in different ways, with growing conviction that the 2030s will be a definitive decade for the commercialization of fusion energy.
Fusion is Steadily Progressing Towards Commercial Energy Production
There has been a huge acceleration in progress over the last three years. In 2022, US scientists at Lawrence Livermore National Laboratory (LLNL) first achieved “ignition,” generating more energy from a fusion reaction than was put in and providing scientific evidence that fusion energy on earth is possible. Scientists are learning how to stabilize plasma for longer: in February of this year, the WEST reactor in France set a plasma duration record of over 22 minutes, smashing the record set by the East reactor in China just a month earlier of over 17 minutes. And researchers are using AI to enhance fusion simulations to better predict plasma behavior and optimize reactor designs, which could further speed up progress.
As the prospect of fusion energy on the grid becomes tangible for the first time, fusion companies are setting their sights on commercialization. Like SMR companies, today fusion companies are laying the groundwork for commercial expansion even as they work towards hitting key milestones. In 2023, Microsoft signed a 50MW PPA with US-based private fusion company Helion, marking the first-ever commercial fusion contract. Helion expects the plant to be online by 2028. In 2025, Google signed a 200MW PPA and Eni signed a 400MW PPA with Commonwealth Fusion Systems (CFS), another US-based private fusion company that expects that their inaugural power plant will generate electricity by the early 2030s.
There are three main approaches being pursued in the race for fusion energy:
- Magnetic confinement, which uses strong magnetic fields created by high-temperature superconducting magnets to confine and stabilize fuel and induce a fusion reaction.
- Inertial confinement, which uses powerful lasers to compress fuel until a fusion reaction occurs.
- Magneto-inertial fusion, which uses magnetic confinement to contain plasma fuel but inertial confinement to compress them together and achieve a fusion reaction.
The approach taken informs the type of fuel that is used and the way electricity is generated. Most approaches harness heat from the reaction to generate steam to power turbines, but some, namely Helion, are attempting the direct capture of electricity.
Beyond these differences in technological approaches, there are macro-level distinctions in how fusion research is being conducted across the globe, opening an additional arena for global competition.
Historically, fusion research has been carried out in labs at the national and multilateral level, with ambitious international projects like ITER. But as the commercialization of this technology nears, countries are now in an intense competition to develop commercial fusion power, with the United States and China at the forefront. In the United States this effort is led by private start-ups, whereas in China the government is building up a state-backed fusion program.
The United States has arguably the world’s strongest private fusion sector, boasting 25 of the world’s 45 private fusion companies surveyed by the Fusion Industry Association (FIA), and around 80% of the over $6 billion in equity investments into private fusion companies. The United States is also home to three fusion companies widely regarded as the front-runners – Commonwealth Fusion Systems (CFS), Helion Energy, and TAE Technologies – who have some of the most aggressive timelines to commercialization. They also have prominent backers, including Sam Altman for Helion and Bill Gates’ Breakthrough Energy Ventures for CFS.
China has consistently used its ability to fund, build, and scale projects quickly to become a global leader in clean energy technologies, from solar panels to electric vehicles. Now, it is applying a similar strategy to fusion, by using enormous amounts of state funding to build up domestic players who will be able to compete for domestic and international market share in the future. Despite joining the game later, China is now spending ~$1.5bn a year on fusion, nearly double US government funding. They also have ten times the number of PhD graduates in fusion as the United States, and are attracting even more talent. China has built multiple fusion facilities, and has more in the works, including a new laser-based facility in Sichuan that has a similar design as the California-based National Ignition Facility but is roughly 1.5 times larger.
The Chinese state-backed capital being deployed is patient, without needing to respond to near-term demands for returns by investors and shareholders. With patient capital, fusion as a national priority, and more consolidated control of the industry, China is well-positioned to weather the longer development timeline needed to reach commercialization. In addition, stronger government involvement allows China to pursue projects that might face regulatory hurdles elsewhere, such as the world’s first hybrid fusion-fission power plant on Yaohu Science Island that aims to produce 100MW of continuous electricity and be connected to the grid by 2030.
In the United States, some worry that China will outpace the US in fusion. Although hyperscalers are showing a willingness to invest in fusion by signing PPAs, most are not taking on development risks. This has led to calls for the US government to up its fusion funding, with industry and expert groups calling for a one-time infusion of $10 billion for fusion commercialization to “ensure American energy dominance.”
China’s Fusion Supply Chain Advantage
Although the fuel used in fusion reactions is not subject to the same constraints as uranium, the broader supply chain presents additional areas for competition. Some of the most important components of fusion reactors include high-temperature superconducting materials (HTS), especially rare-earth barium copper oxide (REBCO) tape, and high-powered lasers. There are questions about whether the fusion supply chain is capable of meeting current and future commercial demand. A recent report from the Fusion Industry Association stated that fusion supply chain spending increased from $250 million in 2023 to $434 million in 2024. However, 63% of the companies surveyed were uncertain that the supply chain could keep pace with future demand without investments to make the supply chain more robust.
Part of the issue is that without firm long-term commitments from fusion companies, suppliers are unwilling to spend the capital needed to scale production. Most fusion companies are currently operating in accordance with a milestone-based roadmap, launching one pilot reactor at a time, making it difficult to commit to large future orders. A weak supply chain could hinder the ability to commercialize at scale when the time comes. Though the US Department of Energy is funding the development next-generation materials for fusion reactors to some extent, China’s dominance in raw materials and advanced manufacturing capabilities, buoyed by strong state support, gives them another leg up in this area of the fusion race. To secure their supply chains and insulate themselves from geopolitical risks, some western fusion companies are investing purposefully on building a supply chain without exposure to China and adapting production lines from other heavy industries.
Whoever is able to commercialize fusion at scale first will be able to shape how this technology advances globally, how supply chains develop, and what norms guide its spread. Commercial partnerships based on exporting fusion technology could be even longer and more durable than those based on nuclear fission. Thus, perhaps the most important differentiator is that China has built a network of development finance and export credit institutions that dwarfs that of the US and gives the country a framework for not only exporting its commercial technology but leveraging development finance for strategic gains. To compete, the US will need a revitalized strategy for strengthening the global reach of its nuclear industry, including innovative capital solutions for first-of-a-kind technologies like fusion energy.
A Nuclear Energy Transition Will Have Wide-Reaching Geopolitical and Commercial Implications
The mainstream adoption of nuclear energy—whether fission, SMRs, or fusion, or most likely a combination of the three—will have real consequences for geopolitics. Changes to the industry may happen suddenly as new technologies are commercialized, necessitating a framework for scaling up nuclear power, both in the United States and abroad.
For traditionally energy-rich countries like the oil and gas producers of the Arab Gulf, the potential impacts of nuclear energy on global oil demand underlines the importance of economic diversification. Traditional energy exporters may also lose a key source of geopolitical leverage. Countries like Russia, which have sought to weaponize Europe’s dependence on their natural gas supplies for political gain, would see such leverage diminished in a world where nuclear energy is unconstrained by geography.
Conversely, for energy-importing countries, nuclear energy offers a path towards energy self-sufficiency. Nuclear power offers protection from supply disruptions and price volatility, while helping countries meet their net zero goals. Countries that have slowed investments in nuclear energy over the last several decades are now investing once more. Japan has already restarted 14 reactors since Fukushima, and the government has committed to increasing the share of nuclear energy in the country’s electricity mix to 20% by 2040. The UK government announced in July 2025 that it would invest $51 billion in building the country’s first nuclear plant since 1995.
A renaissance in nuclear power will create new competitive dynamics. Control over nuclear supply chains—from uranium enrichment to reactor components, regulatory standards, and export financing—represents an emerging arena of great power competition. Meeting future demand requires building an entirely new ecosystem: stronger supply chains, modernized regulatory bodies, and investors willing to back long-duration, capital intensive projects. Strategic stockpiling of nuclear fuels, workforce development, and international collaboration on safety standards will determine which nations lead—and which lag behind—in this transition.
The nuclear energy renaissance is underway, but success will depend on whether nations can build the infrastructure and partnerships necessary, with the right capital solutions in place, to support a robust nuclear industry.
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