Anduril Industries Inc. founder Palmer Luckey, a Lockheed Martin Corp. board member, Palantir Technology Inc.’s Shyam Sankar and other investors are putting $130 million into Valar Atomics, a nuclear startup that’s aiming to build thousands of advanced nuclear fission reactors within a decade.

The Hawthorne, California-based startup began construction in September in Utah on its first reactor and says it’s on track to demonstrate it can produce 100 kilowatts of thermal energy by July 4. Eventually, the company plans to mass manufacture small modular reactors and cluster them at so-called gigasites, where they will help power artificial intelligence data centers, industrial manufacturers and other customers.

The new funding round is being led by Snowpoint Ventures, the VC firm helmed by Palantir’s former head of global defense, Doug Philippone. Day One Ventures, Dream Ventures, Lockheed Martin board member John Donovan and others also participated in the deal which included $25 million in debt. The startup declined to disclose its valuation.

Valar is one of many startups hoping to meet growing U.S. energy needs with nuclear power. The data center boom and soaring electricity demand will drive $350 billion in U.S. nuclear spending by 2050, according to Bloomberg Intelligence. Valar is part of U.S. Energy Department’s Nuclear Reactor Pilot Program, which is seeking companies that can achieve a self-sustaining nuclear reaction by this summer. A self-sustaining reaction, also called criticality, means that a nuclear reactor is working in a steady state. “It’s a Series A goal to make critical power from a nuclear reactor we built,” said Valar Atomic Founder and Chief Executive Officer Isaiah Taylor.

Philippone, who is joining Valar’s board, said the startup’s technology and design position it in a “sweet spot” to meet demand from the Defense Department to provide reliable, off-grid energy on military bases. “If you had one of these you could power a whole base,” he said. “If we turn this on in six months and it works like we think it will, it sets the stage for a generational company.”

Investor appetite for nuclear startups has grown thanks to advances in technology, renewed government interest and rising demand for energy sources that don’t contribute to pollution and climate change. Corporate venture backing to the sector increased to more than $1 billion this year, according to data provider Global Venturing, and venture firms and individuals have continued to pile into fusion and fission efforts alike.

Billionaires have funded a number of small modular reactor companies, such as Bill Gates-founded TerraPower. Others, including Sam Altman and Jeff Bezos, have placed bets on fusion startups like Helion and General Fusion. Peter Thiel, an early backer of Helion through his firm Mithril, earlier this year backed longtime Founders Fund colleague Scott Nolan and his uranium enrichment company General Matter.

Still, it’s not clear whether advanced reactors will work the way researchers hope they will or that startups are best suited to tackle the problem. Stanford University adjunct professor Steve Blank, who helped pioneer the “Lean Startup” movement, has long pushed for more Silicon Valley startups to tackle major problems like national security and defense. But he said he was wary of those focused on nuclear.

“I don’t want to be the old guy saying get off my lawn,” Blank said. “But we should understand that for something that has half lives of thousands of years, the idea of moving fast and breaking things really shouldn’t apply here.”

Valar is among a group of companies that sued the Nuclear Regulatory Commission, challenging the agency’s years-long licensing process for small modular reactors. With only two small modular reactors in commercial operation in Russia and China, the industry still has a long way to go.

Founded in 2023, Valar Atomics employs 50 people and expects to roughly double its headcount over the next year, Taylor said. The company uses TRISO fuel, helium coolant and graphite, enabling its reactor to operate at 800 degrees Celsius, a temperature significantly hotter than traditional reactors. The heat will be used by industrial manufacturing customers making steel, cement and other items, the company said. The process also generates hydrogen, which Valar said it will combine with carbon dioxide onsite to create clean fuel compatible with much of today's infrastructure.

The startup’s ambitions are grand and the time scale is long, Taylor acknowledged. But he added that a successful prototype demonstration earlier this year was a turning point for the company.

“It showed the market we’re not just scientists with ideas,” he said. “We’re technologists and builders.”

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