Aalo Atomics Lands $100 Million to Launch Nuclear Reactors to Energy AI

One Austin-based startup could have the reply to a vital drawback that the AI business remains to be caught on: the right way to energy all of it.

Aalo Atomics says the reply is not the hulking nuclear vegetation of a long time previous. As a substitute, it is betting on mass-manufactured smaller reactors constructed to sit down beside the information facilities they’re going to gasoline.

That pitch earned the corporate a hefty test. Aalo just lately closed a $100 million Sequence B, CEO Matt Loszak instructed Enterprise Insider. Valor Fairness Companions led the spherical, and Harpoon Ventures, Alumni Ventures, and others participated, bringing Aalo’s complete funding to north of $136 million.

The startup’s trajectory reveals simply how tightly AI and vitality are actually linked. Aalo CEO Matt Loszak stated he cofounded the startup “hand-in-hand” with the AI growth.

“After we began the corporate, we had information facilities excessive up on our record,” he instructed Enterprise Insider. “Very quickly, we had been like, ‘OK, we’ve got to focus your entire firm round this.'”

Loszak and Yasir Arafat, the corporate’s chief know-how officer, based Aalo in 2023 to make mass-manufactured nuclear energy vegetation. The corporate’s important product is the Aalo Pod, a small modular reactor constructed to energy information facilities. Aalo says one Pod can energy roughly 50,000 houses, or one information middle, Loszak stated.

“Nuclear actually is the last word underdog,” Loszak stated. He referred to as it “essentially the most misunderstood know-how I’ve ever seen in my life,” citing skepticism of the protection of nuclear energy.

In August, the Division of Vitality chosen Aalo to check the corporate’s experimental energy plant Aalo-X, which it plans to finish building for in 2026, at Idaho Nationwide Laboratory underneath the Trump administration’s Nuclear Reactor Pilot Program. This program goals to hurry up testing of superior reactor designs and authorize deployment at websites past nationwide labs.

Aalo is not the one firm getting a lift from Washington. Ten nuclear corporations—together with Antares Nuclear, Radiant Industries, Valar Atomics, and Sam Altman-backed Oklo—have been tapped for the DOE’s initiative.

Massive Tech corporations have additionally more and more grow to be all in favour of leveraging nuclear energy to gasoline AI ambitions.

Aalo plans to take its know-how international

Aalo goals to finally take its factory-built mannequin international. Sooner or later, Aalo hopes to mass-produce reactors in giant amenities like its 40,000 square-foot Austin manufacturing facility, ship them to websites all over the world, and assemble them on location. Over time, Loszak stated, the corporate hopes to work with a community of accomplice builders who would deal with set up and operation of the Aalo Pods.

For now, the corporate hopes to accomplice with prospects “keen to pay a premium as a result of they worth the velocity,” Loszak stated, specifically, cloud giants with information middle initiatives within the works. The corporate declined to reveal which hyperscalers it is working with.

Aalo additionally plans to finally “carry prices as little as attainable to assist carry extra vitality to everybody,” Loszak stated. In the end, it goals to chop vitality prices to round three cents per kilowatt hour, although Aalo’s costs are at present increased than this, Loszak stated. Vitality prices can range enormously relying on location, and electrical energy throughout all sectors within the US averages about 13 cents per kilowatt hour as of Could 2025, in line with the US Vitality Info Administration.

Aalo will use the brand new funding to double its employees, rising from about 60 staff now to 120 throughout the subsequent yr. It’s going to concentrate on hiring engineers and manufacturing expertise. That is a pointy improve for a startup that was simply Loszak and Arafat lower than two years in the past.

Betting on nuclear energy

Loszak’s curiosity in nuclear energy is private. He stated he developed bronchial asthma whereas rising up in Canada attributable to coal-plant smog. As soon as the nation expanded nuclear energy, although, Loszak stated his signs disappeared.

“Lo and behold, smog days went to zero, and my bronchial asthma went away,” Loszak stated. “I believed, ‘my God, this know-how is unbelievable.'”

Beforehand, Loszak cofounded Humi, an HR software program startup that Employment Hero acquired for over $100 million in January.

Arafat, Aalo’s cofounder and CTO, brings the nuclear chops. He began his profession at Westinghouse Electrical Firm and later labored on MARVEL, a complicated nuclear reactor on the Idaho Nationwide Laboratory. Arafat earned his Ph.D. in nuclear engineering at North Carolina State College.

“Once I met him, I simply knew he was the proper man to accomplice with. We had actually related values, the same imaginative and prescient for what nuclear ought to grow to be, and even the same humorousness, which is vital as a result of we spend a whole lot of time collectively,” Loszak stated of Arafat.

Loszak stated Aalo’s investor, Valor, is a “particular accomplice” for the startup due to its relationships with large information middle initiatives.

Valor backed Elon Musk’s xAI in a $6 billion Sequence B in 2024, and the funding agency is in talks with lenders to safe as much as $12 billion for xAI’s plan to purchase a big sum of Nvidia chips for a brand new mega-sized information middle, The Wall Road Journal reported in July. Valor additionally participated in AI infrastructure firm Crusoe’s $600 million Sequence D in late 2024.