In a bold move, nuclear startup Deep Fission has announced a deal with data center developer Endeavour to build 2 gigawatts worth of subterranean nuclear power, marking a significant shift in the way nuclear energy is generated and utilized. By burying small reactors underground, Deep Fission aims to reduce the need for massive concrete structures and lower costs, making nuclear power a more viable option for data centers.

The concept of underground nuclear testing is not new, dating back to the 1950s when the U.S. began detonating nuclear bombs beneath the surface to minimize radioactive and sociopolitical fallout. Now, Deep Fission is taking this idea a step further by using depth as a substitute for traditional safety measures. The company's reactors will be lowered down a 30-inch, one-mile deep borehole, with a steam generator converting heat into steam that will be fed to the surface via pipes.

Deep Fission's approach is part of a growing trend in the nuclear industry, driven in part by the increasing energy demands of data centers running compute-intensive workloads for AI applications. Other nuclear startups, such as Kairos and X-Energy, have also partnered with tech giants like Google and Amazon to provide nuclear power for their data centers. Meanwhile, Meta is taking a different approach, inviting nuclear developers to submit proposals for its energy needs.

Most nuclear startups, including Deep Fission, specialize in designing small modular reactors that promise to lower costs through mass production techniques. These compact reactors are appealing to developers who want to maximize the number of servers on their properties. Deep Fission's reactors, in particular, are pressurized-water designs, a common approach used in nuclear submarines and massive power plants.

The deal with Endeavour is significant, with Deep Fission targeting a cost of between five to seven cents per kilowatt-hour, less than half what Lazard estimates new nuclear power costs today in the U.S. The company plans to switch on its first reactor in 2029, in line with other companies' plans. However, like most of its peers, Deep Fission has yet to receive a license from the Nuclear Regulatory Commission, a process it began in March.

A new law sets an 18-month timeline for the NRC to give small modular reactors a thumbs up or down, which could accelerate the licensing process. So far, Kairos is the only company to have successfully made it through the process. As the nuclear industry continues to evolve, it will be interesting to see how companies like Deep Fission navigate the regulatory landscape and bring their innovative approaches to market.

The implications of this trend are far-reaching, with the potential to transform the way data centers are powered and reduce the environmental impact of AI applications. As the demand for energy continues to grow, nuclear startups like Deep Fission are poised to play a significant role in shaping the future of sustainable energy.