Regular readers are aware that one of our biggest concerns with the AI supercycle, and the entire AI arms race between the US and China, is that when push comes to shove, not only is there mounting grassroots opposition to data center build out across the US but, more importantly, the US is badly lagging China when it comes to the rollout of much needed energy to power the hundreds of Gigawatts of energy needed to power up the hundreds of data centers that are coming on line. 

Consider that as we noted two weeks ago, China is currently building 37 nuclear reactors while the US is building zero.

Meanwhile, the stopgap measure of using gas power as data center energy sources, while prudent, is about to hit a wall as much of the future buildout is rapidly approaching its maximum capacity. Which means that unless nuclear energy is fast-tracked, there will be a massive energy gap preventing the future construction of data centers, something we noted in "More Than Two-Thirds Of The Power Sought For US Data Centers Will Never Materialize."

Which is why we have been keeping a close eye on the rollout and commercialization of modular reactors which are a much more credible long-term energy source for the AI revolution, and were pleasantly surprised to read this morning that Nano Nuclear Energy, a leader in the commercialization of US modular reactors, announced the signing of a strategic commercial framework with Tillman and its global data-center platform, Tillman Digital Gateway, to advance the future deployment of Nano Nuclear's Kronos MMR Energy Systems across Tillman's planned AI industrial zones in the United States.

The framework identifies Nano Nuclear as Tillman's anticipated preferred nuclear technology provider and establishes a structure for the parties to collaborate on the evaluation and development of nuclear generation opportunities across Tillman's growing U.S. data-center pipeline, with a parallel opportunity to expand to certain international markets.

In connection with the proposed collaboration, the parties are targeting 2 GW or more of advanced nuclear capacity by the mid-2030s and 6 GW or more by 2040, subject to general and site-specific definitive agreements, customer commitments, financing, regulatory approvals and other project requirements.

“Power availability is becoming one of the defining constraints on the continued expansion of AI infrastructure, and addressing this challenge will require both near-term execution and long-term planning,” said James Walker, CEO of NANO Nuclear Energy.

“For NANO Nuclear, this framework represents an important potential commercialization pathway that connects our technology with an anticipated multi-gigawatt-site pipeline of power demand,” said Jay Yu, Founder and Chairman of NANO Nuclear Energy. “Importantly, the structure is intended to align both organizations around measurable project-development and commercial milestones as individual opportunities progress. We believe combining Tillman’s infrastructure-development capabilities with our nuclear technology, regulatory licensing pathway and deployment model can create a scalable foundation for future nuclear-powered AI infrastructure.”

“Meeting the extraordinary power requirements of next-generation AI infrastructure requires us to plan not only for what our campuses need today, but for the resilient, scalable power architecture they will require for decades to come,” said Sachit Ahuja, Co-President of Tillman Global Holdings. “We view NANO Nuclear as an emerging leader in advanced nuclear whose progress to date, commercially focused strategy and modular technology platform make it a compelling potential solution for our medium- and long-term power requirements. This framework combines Tillman’s infrastructure-development platform and relationships with large-scale technology customers and NANO Nuclear’s advanced nuclear capabilities, creating a pathway to benefit from the integration of nuclear generation into future Tillman campuses as our portfolio expands.”

Below are the listed key elements of the proposed framework: 

• Preferred nuclear technology relationship: The framework identifies NANO Nuclear as Tillman’s proposed preferred nuclear technology provider for potential advanced nuclear energy deployments across Tillman’s planned U.S. AI industrial zones.
• Joint project development: Tillman and NANO Nuclear intend to evaluate candidate sites for future nuclear energy deployment and collaborate on site diligence, development and licensing planning, customer engagement and project structuring as individual opportunities advance.
• IPP-style deployment model: For qualifying projects, the parties contemplate an independent-power-producer-style structure under which Tillman or its affiliates would finance, develop and own project power infrastructure and NANO Nuclear would develop, support operations, and supply the reactors and fuel, with specific commercial arrangements to be negotiated on a project-by-project basis.
• Milestone-Based Warrant Arrangement and $5 Million Initial Equity Grant: The framework contemplates the proposed issuance to Tillman of fully milestone-vesting warrants to purchase up to $100 million of NANO Nuclear common stock. A majority of the warrants would vest only upon future binding reactor purchase commitments. The remaining portion of the warrants would vest only upon achievement of specified project-development milestones. The framework also contemplates an initial restricted common stock grant to Tillman with a notional value of $5 million, a portion of which would vest upon execution of definitive equity grant agreements, with the substantial majority vesting only upon achievement of specified project-development milestones.
• Project-level equity participation: The framework also contemplates potential rights for NANO Nuclear to participate alongside Tillman in a portion of the equity of certain project-level entities associated with future nuclear generation and corresponding data-center development once qualifying nuclear projects reach specified development milestones. Any such participation is subject to separately negotiated project-specific terms and definitive agreements.

To be sure, this is still woefully insufficient to plug the full gap of roughly 763 GW of uncommitted or unconfirmed energy needed for data center power builds, but it is a welcome start and we believe that more data centers will need to follow in Tillman's footstep to arrange precisely the kind of long-term energy deals that advanced nuclear companies like Nano Nuclear make possible.