The U.S. Department of Energy on Monday awarded $2.7 billion to three companies to expand domestic uranium enrichment, aiming to reduce reliance on foreign fuel, support nuclear reactors, and meet rising power demand from AI-driven data centers.
US Uranium Enrichment Funding Targets Fuel Security and Advanced Reactors
The Energy Department said it will award $900 million each to American Centrifuge Operating, Orano Federal Services, and General Matter to strengthen US uranium enrichment capacity. The funds will be distributed through task orders over the next 10 years under what the department called a “strict milestone approach.”
The effort is designed to reduce dependence on foreign nuclear fuel, particularly from Russia. Russia controls about 44% of global uranium enrichment capacity and supplies roughly 35% of U.S. nuclear fuel imports, according to the department.
Energy Secretary Chris Wright said the awards mark a turning point for the industry. “Today’s awards show that this administration is committed to restoring a secure domestic nuclear fuel supply chain capable of producing the nuclear fuels needed to power the reactors of today and the advanced reactors of tomorrow,” Wright said in a statement.
The United States operates 94 commercial nuclear reactors, which currently rely in part on imported enriched uranium. Officials say expanding domestic capacity is critical to maintaining energy security as nuclear power gains renewed attention.
AI Data Centers Drive Power Demand
The announcement comes as electricity demand surges from the rapid expansion of artificial intelligence data centers. Major technology companies, including Microsoft, Google, Meta and OpenAI, are building large facilities that require vast and steady power supplies.
Those energy needs are straining local grids and prompting policymakers and utilities to reconsider nuclear power as a long-term, carbon-free option. The Energy US uranium enrichment said reliable access to enriched uranium is essential if nuclear plants are to meet future demand.
Congress first allocated the funding in a 2024 government spending bill passed during the Biden-Harris administration. That year, six companies were selected for contracts allowing them to compete for future enrichment work.
The United States also banned imports of Russian nuclear fuel, though the Energy Department retains authority to issue waivers through 2028 to avoid supply disruptions.
Companies Split Work on HALEU and Traditional Fuel
Under the awards announced Monday, American Centrifuge Operating, a subsidiary of Centrus Energy, and General Matter will focus on producing high-assay low-enriched uranium, known as HALEU. The specialized fuel is required for advanced nuclear reactors now under development.
Orano Federal Services will work on expanding production of traditional low-enriched uranium used in existing reactors.
General Matter is a startup founded last year by Scott Nolan, a partner at Founders Fund, the venture capital firm founded by billionaire investor Peter Thiel. The company raised $50 million in a funding round led by Founders Fund, which added Thiel to its board.
The startup already has access to federal resources. In August, the Energy Department leased about 100 acres at the former Paducah Gaseous Diffusion Plant in Kentucky to General Matter for a private enrichment facility. The agreement also provides access to at least 7,600 cylinders of uranium hexafluoride for future re-enrichment.
Construction at the Paducah site is expected to begin this year, with operations planned by the end of the decade. The US uranium enrichment said the combined projects are intended to rebuild a domestic fuel cycle that has declined for decades.
