The U.S. Department of Energy is betting that building a robust domestic supply chain for small modular reactors (SMRs) is just as important as deploying the reactors themselves. On May 15, 2026, the DOE announced $94 million in cost-share funding distributed across eight companies, marking a strategic shift toward securing the manufacturing backbone needed to power the nation's growing AI infrastructure.

This Tier 2 disbursement under the Generation III+ SMR Pathway to Deployment Program represents a smaller but more targeted investment compared to last year's $800 million round, which went to two major projects: a GE Vernova Hitachi Nuclear Energy (GVH) BWRX-300 reactor at Clinch River in Tennessee and two Holtec SMR-300 units at the Palisades site in Michigan. The newly announced recipients span different regions and focus on critical gaps in the nuclear supply chain, from fuel fabrication to reactor component manufacturing.

Why Is Supply Chain Development So Critical Right Now?

The nuclear industry faces a fundamental challenge: deploying SMRs at scale requires not just reactor designs, but an entire ecosystem of domestic manufacturers capable of producing specialized components. Without this infrastructure, the U.S. risks delays in deployment and dependency on foreign suppliers. The DOE's latest awards directly address this bottleneck by funding equipment upgrades, facility expansions, and quality certifications across the supply chain.

The timing aligns with surging demand from tech companies and data center operators seeking reliable, carbon-free power for AI workloads. Amazon's $650 million acquisition of a 960-megawatt nuclear-powered data center from Talen Energy in March 2024 signals how seriously hyperscalers are pursuing nuclear partnerships. As AI model training and inference consume ever-larger amounts of electricity, utilities and tech firms are turning to nuclear as a solution that can run continuously, unlike intermittent renewables.

"Advanced light water SMRs will give our nation the reliable, round-the-clock power we need to fuel the president's manufacturing boom, support data centers and AI growth, and reinforce a stronger, more secure electric grid," said DOE Secretary Chris Wright.

Chris Wright, Secretary of the Department of Energy

How Are These Funds Being Deployed Across the Industry?

The $94 million in awards split into two categories: site preparation and supply chain development. Two companies received funding for licensing and site selection, while six others focused on manufacturing capacity and component production.

• Site Preparation: Constellation SMR Development LLC received $17.3 million to pursue a Nuclear Regulatory Commission (NRC) early site permit (ESP) for a future SMR site in New York, while Nebraska Public Power District secured $27.9 million for an ESP in Nebraska.
• Reactor Pressure Vessels: BWXT Nuclear Energy Inc. received $21.4 million to acquire equipment for final assembly of reactor pressure vessels and large component manufacturing at its Mount Vernon, Indiana facility.
• Fuel Fabrication: Framatome U.S. Government Solutions LLC obtained $8.8 million to expand its Richland, Washington fuel fabrication facility, adding approximately 200 metric tons of uranium annual capacity and increasing ceramic pellet production lines.
• Fuel Rod Production: Global Nuclear Fuel Americas received $3 million to establish a second production line for fuel rod fabrication at its Wilmington, North Carolina facility, including automated pellet inspection and storage systems.
• Large Component Forgings: North American Forgemasters Company received $2.9 million to procure a new furnace at its New Castle, Pennsylvania facility for domestically producing large-component forgings for Generation III+ SMRs.
• Precision Machining: Scot Forge Company secured $12.3 million to procure and install a large vertical turning lathe and gantry-style milling machine at its Spring Grove, Illinois facility for manufacturing large components.
• Quality Assurance: Container Technologies Industries LLC received $547,900 to expand nuclear quality assurance certifications at its Helenwood, Tennessee facility for producing steel for SMR deployments.

This geographic diversity is intentional. By distributing awards across New York, Nebraska, Indiana, Washington, North Carolina, Pennsylvania, Tennessee, and Illinois, the DOE is building redundancy and resilience into the supply chain. No single facility becomes a bottleneck, and regional manufacturing hubs can support local deployment efforts.

What Does This Mean for AI Data Centers?

The connection between SMR deployment and AI infrastructure is explicit in the DOE's messaging. AI training and inference operations demand enormous amounts of electricity, often requiring dedicated power sources that can operate 24/7 without interruption. Traditional power grids struggle to meet these demands, especially in regions where renewable energy is intermittent. SMRs offer a solution: they can be deployed at smaller scales than conventional nuclear plants, potentially located closer to data centers, and they provide the consistent baseload power that AI workloads require.

Framatome's expansion is particularly noteworthy because it includes approval for fuel enrichment above 5 percent uranium-235, with manufacturing scheduled to begin in 2027. This higher enrichment level allows SMRs to operate more efficiently, reducing the amount of fuel needed and lowering operational costs. For data center operators, this translates to more affordable, reliable power.

The DOE noted that approximately $900 million in total funding through the Generation III+ SMR Pathway to Deployment Program was originally offered in 2024 under the Biden administration, but the solicitation was modified in 2025 to align with the Trump administration's energy policies. This continuity across administrations suggests that nuclear-powered AI infrastructure has become a bipartisan priority, driven by national security and economic competitiveness concerns.

When Can We Expect These Investments to Translate Into Deployed Reactors?

The timeline varies by project. Site preparation efforts in New York and Nebraska are pursuing early site permits, a process that typically takes several years. Meanwhile, supply chain investments should yield results more quickly. Framatome's fuel fabrication expansion is expected to begin production in 2027, providing capacity for multiple SMR deployments. Equipment acquisitions at BWXT, Global Nuclear Fuel, North American Forgemasters, and Scot Forge should be operational within 12 to 24 months, enabling faster assembly and manufacturing of reactor components.

The DOE indicated that another round of Tier 2 awards may be issued if additional funds become available, suggesting this is not a one-time investment but the beginning of a sustained effort to build out domestic nuclear manufacturing capacity. For AI companies and data center operators, this means the path to nuclear-powered infrastructure is becoming clearer, though still years away from widespread deployment.