Austin Company Tackles Data Center Power Demands With Nuclear Plants

Austin-based nuclear energy company Aalo Atomics revealed its prototype for the industry’s first fully modular nuclear plant and reactors designed specifically for artificial intelligence and data centers.

Aalo Atomics invited investors, industry partners, government officials and more to this week’s opening of its 40,000-square-foot manufacturing facility. During the event, leadership discussed the story behind its modular pod nuclear plants and its non-nuclear reactor designed specifically for data centers.

“All the past nuclear plants that have ever been built were bespoke, like one-off things,” said Matt Loszak, Aalo Atomics CEO and co-founder. “Right now is this really unique point in time where we have the right kind of demand and public support and government support to pull off a reactor, nuclear plant factory. The whole advantage of a factory is it becomes much more repeatable and predictable on cost and timeline; you can lower the cost a lot over time as well. The big unlock for this right now is this AI boom.”

While a renewable and cleaner form of energy, nuclear power suffers from high costs and long lead and construction times.

Loszak and co-founder Yasir Arafat, the company’s chief technology officer, wanted to address those issues while also meeting data centers’ power demands.

Enter the Aalo-1 reactor, unveiled as a full-scale, functional prototype at Monday’s event. This reactor is the core component of the Aalo Pod XMR, a 50-megawatt modular power plant designed for data centers.

Loszak said each pod will contain five of the 10-megawatt reactors and is built to be modular so the pod can scale to gigawatts.

Aalo’s pod is designed to have a relatively small physical footprint, with no need for external water sources, as a way to address cost and construction time delays. It can be colocated on-site with the data center it serves. The reactors are sodium-cooled and use low-enriched uranium fuel, which is readily available. They’re less expensive than the fuel and cooling systems traditionally used by nuclear reactors and plants.

Aalo purchased and began scaling its manufacturing facility, located off Texas 71 at 5900 E. Ben White Blvd., just six months ago. The goal is for the factory to mass manufacture and ship its reactors and pods to shorten installation times and to reduce costs. Loszak said the factory initially can produce about 16 reactors a year.

Data centers, which are used by organizations to remotely store, process and distribute large amounts of data, require large amounts of power.

An October study by Bain & Co. said data centers could consume 9 percent of U.S. electricity generation by 2030, and U.S. utilities might increase annual energy generation 7 percent to 26 percent above 2023 levels to meet the demand. As of December, data centers could be responsible for roughly half of new power demand in Texas, which is expected to drive summer grid peaks from 86 gigawatts today to 150 in 2030.

Data centers in Texas accounted for 4.5 percent of the total state electricity consumed in 2023, according to the nonprofit electricity researcher the Electric Power Research Institute, or EPRI. EPRI also projects that data centers could consume up to 9 percent of U.S. electricity generation annually by 2030. In Texas, that number would be up to 10.64 percent.

Pablo Vegas, CEO of the Electric Reliability Council of Texas, told lawmakers in June that grid capacity needs to grow from 85,000 to 150,000 megawatts in the next six years as Bitcoin mining and data centers will account for more than half of the added growth on the Texas grid.

Aalo is working with data center industry partners, like Crusoe who currently is building a 200-megawatt data center in Abilene, and researchers to test and scale its products.

Loszak said his hope is that Aalo’s reactors and pods will be deployed commercially and at different data center sites by 2028 or 2029, with Arafat saying they want their reactors and pods to eventually be built at a pace similar to automobiles and planes.

Nuclear energy is traditionally not mass manufactured due to high construction costs, long timelines, safety concerns, complicated plant requirements and more. Arafat said that even before founding Aalo, he had wanted to address those issues while working in the nuclear energy industry.

Loszak said Aalo has purchased a plot of land in Bastrop County for non-nuclear testing. In about 12 months, the company plans to break ground on its first nuclear reactor.

The company also was selected as one of four partners working to develop up to 1 gigawatt of nuclear energy generation capacity at Texas A&M University’s RELLIS campus in Bryan-College Station. The university project, “The Energy Proving Ground,” aims to look at the future of energy delivery in the U.S. and is allowing four nuclear energy companies, including Aalo, to bring reactors to the 2,4000-acre tech innovation campus in Bryan.

Along with its testing and facility in Texas, the U.S. Department of Energy has identified a piece of land at the Idaho National Laboratory, a lab that researches nuclear power alongside commercial partners, for a potential new reactor facility.

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