U.S. May Build Too Much Nuclear Power

By Douglas McIntyre  •  October 2, 2025
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America needs as much nuclear power as its energy sector can provide. The electricity consumption of AI data centers is increasing by double digits year over year. OpenAI CEO Sam Altman said these centers may eventually require a third of the U.S.’s electricity. The Trump Administration is even making coal mining more financially attractive to compensate for what is becoming a growing energy shortage. However, some investors believe that nuclear power could become overbuilt.

According to Semafor, “A host of nuclear power startups — some developing fusion technology, others conventional fission but in smaller, more cost-effective packaging than traditional big reactors — are drawing billions of dollars in investment even though none are yet sending electrons to the grid.” Concerns have risen that there may even be some bankruptcies.

Fusion Won’t Work

However, the problem is overstated. Some sources of nuclear energy may do very well. Small modular reactors are in their infancy. However, they still use traditional means to produce electricity. Fusion is a different matter. It has not shown any hope, however slight, that it will be successful on even a microscopic scale.

A more likely set of problems is valuations. The entire sector’s valuations have been remarkably high. Recently, the value of OpenAI hit $500 billion. It still has very modest revenue and has not proven its revene will rise in the long term. Many companies and individuals have found that using OpenAI and its competitors is free of charge. If these companies pull back their expansion, electricity needs may slow, but almost no one thinks AI will continue to be energy-hungry. 

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