US wants to quadruple nuclear capacity by 2050, but past failures cast long shadows

The US wants to quadruple its nuclear power capacity by 2050 to meet the electricity demands of AI data centers. But cost overruns, missing licenses, and skeptical investors are casting doubt on the plan.

On the shores of Lake Michigan, hundreds of workers are trying to accomplish something never done before in the US: bringing a decommissioned nuclear plant back online. The Palisades plant in Michigan, shut down by Entergy in 2022 for economic reasons, is set to start generating power again within weeks, according to a Financial Times report.

Holtec International, which originally bought the facility for decommissioning, received $3.2 billion from the US government. The funds will finance upgrades and construction of two small modular reactors (SMRs) to boost capacity to 1,400 megawatts.

AI power hunger drives nuclear ambitions

The forces behind this nuclear renaissance are the exploding power demands of AI data centers and the reshoring of industrial production to the US. Microsoft and Google have signed long-term power contracts to bring shuttered plants in Pennsylvania and Iowa back online. Nuclear delivers clean power without the variability of solar and wind.

President Trump set a goal in May to quadruple US nuclear capacity by 2050. In October, Washington signed an $80 billion partnership with private equity firm Brookfield and reactor manufacturer Westinghouse to build eight large reactors. In 2024, a record $3 billion in private investment flowed into SMR startups, according to the FT.

Past cost explosions and bankruptcies loom large

Expert skepticism stems from recent history. The last two large reactors built in the US at Plant Vogtle in Georgia came online in 2023 and 2024 - seven years late and $18 billion over budget. Construction costs hit $15,000 per kilowatt, roughly five times higher than in South Korea or China, and the losses drove Westinghouse into bankruptcy in 2017.

Utilities like Duke Energy are demanding government guarantees against cost overruns before committing their own capital. An agreement between industry, tech companies, and the Trump administration remains elusive. Julien Dumoulin-Smith, an analyst at Jefferies, doubts the federal government will step in as guarantor, the FT reports.

Small modular reactors face hype-versus-reality gap

Small modular reactors are seen as the great hope. Google signed its first binding contract with Kairos Power, and Oklo - backed by OpenAI founder Sam Altman - reports 14 gigawatts in power delivery agreements. Meta is also betting big on the technology in its latest mega-deal. But none of the more than 50 SMR technologies developed in the US has received an operating license from the Nuclear Regulatory Commission. Only NuScale has design approval.

Former NRC chair Allison Macfarlane considers Trump's goal basically impossible to achieve. Speeding up approval processes could increase accident risk, she warns. Adam Stein of the Breakthrough Institute sees it differently, pointing to the best market conditions ever: tax incentives, loans, rising demand, and private investment distinguish the current situation from the failed nuclear renaissance of the 2000s.