Tech Titans: Funding and Building the Safest Nuclear Reactor with Matt Loszak, Aalo Atomics

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:00:00) I think it's just worth saying that nuclear really will be the cheapest energy source by far. Its equivalent energy content to 2,000,000 barrels of oil and gas. For our technology, we're really trying to make these reactors as safe as a university research reactor. So a lot of people don't realize there are around 30 nuclear reactors on university campuses. And, you know, students walk by these things without even knowing they're there. And the reason that is is because it has this special fuel called uranium zirconium hydride.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:00:43) Most research reactors use this fuel, which has this kind of incredible safety mechanism where the hotter the fuel gets, the less reactive it gets. So it's essentially, you know, inherently meltdown proof. And so, you know, for no good reason, and there are some interesting kind of subtle subtleties to this we can get into here, but this fuel has not been used for power production before. And so the idea is, you know, if you want to make nuclear ubiquitous and make these small reactors in a factory that can be deployed all over the place, it should be, you know, as safe as a university research reactor that can just go in your backyard, and you can feel great about that. So that's essentially what we're trying to do is make, you know, factory-made small nuclear reactors that can be deployed anywhere, from, you know, to power data centers, desalination plants, maybe even one day small communities with not only power, but also the residual heat powering those communities.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:01:39) And I could go on, but that's the kind of core premise. It's interesting. We're taking the venture funding route. And so we've raised a good amount of money relatively quickly. We raised a $6,000,000 seed round within a few months of our inception.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:01:56) And then that was about a year and a few months ago. In the past month, we closed a $27,000,000 Series A, and that might go up a little bit higher. We'll see. We still have a few active—we might bump that up a little bit more. Some more to come there. But then, you know, the plan is to raise more next year for a Series B. And so essentially, you know, if you look at the roadmap here, with the Series A, we'll be building a non-nuclear prototype.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:02:31) This will also consist of a number of other subsystem testing, and that's going to be happening over the next essentially six to twelve months. But our goal is to get approved to start construction on the first real nuclear version in 2026. This is our internal goal. And so, you know, obviously, to fund that reactor, we'll be announcing more on this later. It'll be a mixture of venture funding, and we're also, of course, going after non-dilutive government capital for this as well.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:03:08) And when we announce more on this, it'll become more clear why that is. But, you know, you're right. There is a lot of capital that has to be raised for this kind of business. I think one interesting thing there is that people don't often realize, you know, if you look at how much money certain companies in software have raised, like, you know, Uber or Airbnb and others, it's relatively on par with companies like SpaceX or Tesla or other, you know, deep tech companies, in terms of how much venture was raised. And so, you know, at scale, it's kind of a comparable amount of money.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:03:47) But I think the thing is just that there are more ways to fail in a deep tech startup than there are in a software company. My last company was a software company. I think, you know, if you can sell software to one business, 10 businesses, a hundred businesses, you'll always survive. You'll just make, you know, different amounts of revenue as a business and so on. Whereas in deep tech, you have to clear a lot more existential hurdles before you actually get to the promised land of, you know, in this case, bankability, and being able to actually, you know, project finance a reactor project consistently.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:04:24) There's no doubt that to pull something like this off requires a ton of experts in probably a wider array of fields than a lot of other spaces. So, you know, anything from the nuclear physics of it to the manufacturing of it, to the financing of it and the kind of financial modeling that goes behind that, to the construction, I mean, the ongoing operations and maintenance, and so on. So, you know, there are a ton of different aspects to this that we need to bring on the top people in the world to help achieve this. Because, you know, especially in nuclear, it's critical that you get a lot of stuff right the first time around. You know, as much as in rocketry, you can, you know, blow up a few rockets as you're learning.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:05:15) In nuclear, you can't really blow up a few reactors on your way to learning there. So hiring is critical. My co-founder, our CTO, he's the project lead and chief architect behind the MARVEL program at Idaho National Lab. And he joined as co-founder and CTO late last year after the MARVEL team achieved this pretty historic milestone, which was they became the first reactor design that the DOE has ever authorized for construction. So the DOE was formed in 1977. Until this past October, they had not authorized a new nuclear reactor design for construction.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:06:00) And so that was a big milestone. MARVEL is under construction right now. It'll go live in the next year or two. But, you know, so that's an incredible derisking for us on our pathway to commercializing this reactor. The closest thing to a small reactor operational in the States today would be these research reactors, but they are not power producing.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:06:23) There is a history of smaller reactors that were experimented with by the military several decades ago. So, you know, some of these were mobile. You could place them down, pick them up, move them somewhere else, place them down, and power a base. Some were stationary. So, you know, there was one really cool one that was kind of under, you know, 10 or 20 feet of snow that powered a, you know, kind of a winter northern base and offered both power and heat, and kind of created a small little town around that reactor.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:07:04) So, you know, these things have been done, but as of late, you know, a lot of the experimentation happened in that first atomic age in the 1950s and '60s. And I think a lot of this momentum today will result in some pretty exciting deployments in the years to come. There's also been a real shift in the public narrative, and it's really, you know, palpable. I mean, if you talk to pro-nuclear advocates who have been in this space for 10, 20 years, or longer, in some cases, I mean, Rod Adams is one of our investors, Nucleation Capital, and he's been writing about nuclear for, you know, many, many decades now, and he's got an incredible blog for those who are interested. But point being, the past five years is a real difference.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:07:55) I mean, five or ten years ago, if you spoke about deploying more nuclear energy, you would have gotten a dirty look or people would really, you know, think you're crazy. It's really shifted. And so in the past five years, people now—it's slowly permeated the investment community. It's permeated the news, it's permeated the government. And now everyone is kind of saying like, yeah, you know, we should probably deploy more nuclear energy, or we should definitely deploy more nuclear energy to help hit our, for example, 2030 or 2050 climate goals.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:08:31) Our goals around the energy transition. The idea is, you know, for example, for a data center, nuclear, especially small modular nuclear, is a really beautiful fit because it's baseload, it's clean. But the interesting one that doesn't get talked about all the time is if you do a fleet of small reactors instead of one large reactor, then you can do what's called an N+1 configuration where you have one or two extra reactors of the small kind that are kind of a backup. And when you're refueling or doing maintenance on one of the other reactors, you bring online one of the backup ones. And, you know, in doing so, you could essentially completely remove the requirement for any grid interconnection.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:09:21) And, you know, the grid is like this really interesting thing because it's like this crazy complex, you know, old machine that spans transmission, distribution across, you know, huge swaths of land, and there's all sorts of balancing and everything. And, you know, the cost of electricity that we pay for in our homes, for example, is roughly half from the cost of this T&D side of things, transmission and distribution. And moreover, for these data center companies, it takes a long time to get a grid interconnection. And, you know, they want to deploy yesterday. They want to deploy a lot of new capacity very quickly.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:10:04) And, you know, it's this really interesting thing. A lot of—you know, I've spoken to a lot of the leaders at some of these, you know, Microsoft, Google, Amazon, you know, and the leaders who are looking to deploy this energy infrastructure. And they're kind of scratching their heads a little bit because, like, nothing seems to be just right. I mean, you know, natural gas is quick and cheap, but it's not clean, right?

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:10:29) And then you've got hydro and geothermal, and these are clean, but they don't work everywhere. They have really strict geography constraints, right, based on where those energy sources are going to be. And then solar is cool and it's getting cheaper, but you need to do batteries and overbuilding to make it reliable, which adds a lot of cost. It's not as cheap when you do all that to actually get—to resolve the intermittency issue. And then also it uses a lot of land. And, you know, some people say, oh, you know, all you have to do is cover 7% of the country with solar panels and you're good.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:11:06) And it's like, is that really what we want to do? Like, that's a lot of land that comes out. I'd rather have nuclear. Yeah. Yeah.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:11:13) I mean, it just seems like a better solution. And so, you know, with nuclear, it works anywhere. It works all the time. It's clean and it's as safe as solar and wind. So, but the reason that utilities—sorry, the data center companies are, or the big tech companies are scratching their heads is because they're like, okay, well, nuclear is great, but then we can't wait ten or fifteen years to have a new gigawatt-size plant built.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:11:39) So this is our, you know, incredible window of opportunity for us right now because, you know, we've just moved into this 40,000 square foot factory here in Austin. We've raised a good amount of venture capital so far, and we'll have to raise a lot more to execute this vision. But the idea here is small nuclear can be this amazing solution for them because they can parametrically scale their data centers with these reactors. So install one of the 10-megawatt ones alongside part of the data center and then keep expanding the data center, keep expanding the power production. And you do that in series.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:12:12) And that way you don't have to, you know, worry about, or wait until a full gigawatt scale plant is built. You just start to turn things on as each smaller plant is built. Plus the idea of doing the N+1 configuration, which removes that need for a grid interconnect, which saves time and money as well. So it's really potentially a perfect solution for, you know, arguably the largest source of new load growth in maybe in history. I think it's just worth saying that nuclear really will be the cheapest energy source by far when it's fully baked out.

(Guest (Nuclear Reactor Startup Founder/CEO) at 00:12:49) And, you know, a good case study of this is natural gas. Like, a hundred years ago, it was thought of as a waste product, and people thought would never be cheap. But, you know, when we started to invest in it and build up the infrastructure of the pipelines all around the country and the better fracking methods to source the fuel, lo and behold, the cost went way down. And it's kind of insane to say, like, oh, nuclear is inherently expensive, because it is the most energy dense source, fuel source that we've ever discovered by a factor of several million. So, like, you know, if you take one barrel of uranium, it's equivalent energy content to 2,000,000 barrels of oil and gas. So Aalo means the light, and this has a few different meanings for us, but one is that we really, you know, we believe in a bright future. We want to push towards a bright, optimistic future because there are, you know, lots of people out there who are relatively pessimistic and don't think humanity is going in the right direction. And we really want to help push humanity in that positive, bright, optimistic, you know, future kind of thing where humanity is growing and flourishing. But also maybe one other way I'll mention that we—this resonates with us—is we really try to hire really smart but also humble optimists because, you know, in our view, there's really nothing more dangerous than a well-spoken pessimist.

(Joel Beasley at 00:14:25) Thank you so much for listening. And if you found this episode useful, please share it with a friend or colleague who you think would get value from it. And if you have topics that you would like to hear discussed on the podcast, either add me on LinkedIn or send me an email, [email protected]. Every time I get an email or LinkedIn message, it absolutely makes my day and inspires me to keep going.