Venture capitalists in Silicon Valley and other tech hubs are investing money in nuclear energy for the first time in history. That’s changing its trajectory and pace of innovation.

“There’s not been a resurgence of nuclear power, ever, since its heyday in the late 1970s,” Ray Rothrock, a longtime venture capitalist who has personal investments in 10 nuclear startups, told CNBC.

Now, that’s changing. “I have never seen this kind of investment before. Ever.”  

Jacob DeWitte, CEO of micro-reactor startup Oklo, says the landscape has changed dramatically since he started raising money in 2014, when he was a part of the Y Combinator startup incubator.

“More investors are interested, more investors are excited by the space, and they’re getting smarter to do the diligence and know what to do here — which is good,” DeWitte told CNBC.

This surge of private investment will be a positive for the industry, agrees John Parsons, an economist and lecturer at MIT.

“I think having fresh perspectives is really good,” Parsons told CNBC. Nuclear energy is “a very complex science, and it’s been supported by the federal government and at these national labs. And so that’s a very small circle of people. And when you broaden that circle, you get a lot of new minds, different thinking, a variety of experiments.”

In any industry, there can be a “groupthink” or “narrowness” in the way things are done over time, Parsons said. With private investment in the space, “there will be out-of-the-box thinking,” he said. “Maybe that out-of-the-box thinking doesn’t produce anything useful. Maybe it turns out that the old designs are the best. But I think it’s really wonderful to have the variety of takes.”

Not everyone is so optimistic that the recent influx of venture dollars will lead to progress.

“Investors have often invested in stupid things that didn’t work,” Naomi Oreskes, a professor of the history of science at Harvard University, told CNBC. “Because the reality is that in a 75-year history of this technology, it has never been profitable in a market-based system.” If investors are putting money into nuclear now, that’s because they think they can make money, and “I can only think they believe they will make money because they think that there’s a big opportunity to have the federal government pick up a big part of the tab,” Oreskes said.

Nuclear investment by the numbers

From 2015 to 2021, total venture capital deal flow in the United States increased 54% in terms of deals closed and 294% by dollar value, according to data compiled by private capital market research firm Pitchbook for CNBC. In that same time, climate investing deal flow in the United States jumped by 214% in terms of volume and 1,348% by dollar value.

In the nuclear space, investment rose even faster — 325% by volume and 3,642% by dollar value, according to Pitchbook.

Some of the rapid pace of increase in investment in the nuclear sector is explained by its starting point — virtually zero.

“This is still pretty small compared to the private investments in renewables,” like wind and solar, for example, said David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis, a market research firm.

The venture market slowed overall in 2022, and nuclear investment is no exception. Concerns about the war in Ukraine, inflation, a wave of layoffs and murmurs of a recession have made investors nervous in the public markets and private alike.

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