Venture capital firm Founders Fund, co-founded by billionaire investor Peter Thiel, is supporting a nuclear start-up which aims to develop a new production method for high-assay low-enriched uranium (HALEU), the Financial Times reported citing two people familiar with the matter. Although the venture is at an early stage, is already staffed by nuclear industry veterans and SpaceX engineers.
HALEU is widely used in advanced reactors and small modular reactors (SMRs) which tech groups from Amazon to Microsoft are hoping will supply their AI-related data centres, along with conventional NPPs. For example, Microsoft recently announced a 20-year power supply deal with Constellation Energy that will involve reopening the Three Mile Island NPP in Pennsylvania. However, HALEU is currently only produced commercially by Russia.
Thiel, the co-founder of PayPal and the first outside investor in Facebook, previously backed nuclear fusion start-up Helion, while Founders Fund supported Transatomic Power, which attempted to develop a molten salt reactor before closing down in 2018.The FT, referencing “one of the people”, said Founders Fund had committed funding to inject into the company, which it will receive once it has obtained approvals from the US Nuclear Regulatory Commission and Department of Energy.
Founders Fund is a US venture capital fund formed in 2005 and based in San Francisco. The fund has roughly $12bn in total assets under management as of 2023. Founders Fund was the first institutional investor in Space Exploration Technologies and Palantir Technologies, and an early investor in Facebook.
Founders Fund says it has to primary aims: “Finding ways to support technological development (technology is the fundamental driver of growth in the industrialised world)” and “earning outstanding returns for our investors.”
It noted: “A lot of money has poured into clean technologies. Investments that have focused on efficiency improvements have done well as a financial matter, but investments in alternative technologies for actually generating energy have not produced particularly good returns. We believe that this is because many companies pursue the wrong model – they seek to be almost as good as the default product, rather than (as should be the case generally) so much better than the default that customers will rush to switch.”
According to Founders Fund, “What we need are companies developing sources of energy that are as good as, or better than, conventional sources at lower prices and at scale. Unfortunately, relatively few companies research such sources, preferring instead incremental improvements on long-established alternative technologies (wind, solar) whose physical limitations mean they cannot satisfy these requirements. But there is no reason to believe that we can’t invent an alternative to alternatives.”
Venture is “a secretive industry and legal strictures cramp down on disclosures,” Founders Fund says. “We have data that suggests what doesn’t work (the status quo) and implies what might. But we have no direct evidence for the proposition that we ought to be investing in smart people solving difficult technical problems. In this sense, we are in the same position as our companies, which also operate with imperfect information. SpaceX had three failed launches before making history with its fourth. PayPal went through five business models before it found something that worked, and the history of Facebook’s initiatives is by no means an unalloyed record of success. Still, you have to run the experiment…. So, we will continue to invest in very talented entrepreneurs who are pursuing ambitious, challenging tasks. We will treat them with respect and hope for the best.”
Researched and written by Judith Perera
