Key Takeaways:
The nuclear energy renaissance is about more than powering AI data centers — the fuel supply chain behind it represents a multibillion-dollar investment opportunity that investors are only beginning to price in.
Artificial intelligence and the subsequent data center boom have been the primary catalysts for renewed investor enthusiasm in nuclear equities and exchange-traded funds such as the ALPS Nautilus SMR, Nuclear & Technology ETF (SMRF). But the investment thesis extends well beyond electricity demand, reaching deep into the fuel fabrication and enrichment supply chain that must scale dramatically for next-generation reactors to become commercially viable.
"The nuclear renaissance is a supply chain story as much as a power generation story," said Joel Duling, President of TRISO-X, a subsidiary of X-energy. "Oak Ridge stands as a cornerstone of nuclear innovation, and we are proud to carry its legacy forward."
X-energy is building what it calls one of the world's largest commercial-scale nuclear fuel fabrication campuses at the Oak Ridge Horizon Center in Tennessee. The campus comprises three facilities: TX-1, the first purpose-built commercial TRISO fuel fabrication plant in the US, currently under construction since November 2025; TX-2, a larger facility expected to create more than 1,000 permanent jobs with enhanced automation; and TX-L, a dedicated fuel fabrication laboratory focused on innovation and testing.
Together, the three facilities are designed to produce enough TRISO-X fuel to support approximately 55 of X-energy's Xe-100 advanced small modular reactors, representing nearly 4.5 gigawatts of new advanced nuclear capacity — enough to power 3.3 million US households. The fuel campus is being developed with support from the State of Tennessee's Nuclear Energy Supply Chain Investment Fund, established by Governor Bill Lee in 2023.
The Fuel Technology Gap
TRISO — tristructural isotropic — fuel consists of small spheres of enriched uranium coated with multiple layers of carbon and ceramic materials, forming a robust shell that can withstand high temperatures. The fuel uses high-assay low-enriched uranium, or HALEU, which contains between 5 percent and 20 percent fissile uranium-235. That compares with 3 percent to 5 percent enrichment in conventional reactor fuel used today.
In February 2026, TRISO-X received a 40-year Special Nuclear Material License from the US Nuclear Regulatory Commission, enabling commercial manufacturing of HALEU fuel under a single license covering both TX-1 and TX-2. The fuel is also undergoing irradiation testing at Idaho National Laboratory's Advanced Test Reactor, with testing ongoing to qualify TRISO-X fuel for use in the Xe-100 and expand the performance envelope for TRISO fuels more broadly.
The first commercial deployment of the Xe-100 is planned in partnership with Dow Inc at Dow's Seadrift site on the Texas Gulf Coast, with additional deployments expected to follow.
Investment Implications
For investors, the nuclear fuel supply chain represents a structural growth opportunity that is distinct from reactor construction. While data center operators such as Amazon, Microsoft and Google have signed power purchase agreements with nuclear developers, the fuel fabrication segment remains early in its scaling phase with fewer public market vehicles to capture the theme.
The SMRF ETF provides diversified exposure across the nuclear ecosystem, including reactor developers, fuel fabricators and engineering firms. But the TRISO-X campus illustrates that the nuclear investment thesis has multiple layers: reactor technology, fuel supply, regulatory licensing and site development each carry their own risk-return profiles and timelines.
X-energy's fuel development program began in 2016 with a pilot facility at Oak Ridge National Laboratory, meaning the current construction represents nearly a decade of qualification work before reaching commercial scale. That timeline underscores the barriers to entry in nuclear fuel manufacturing — and the potential pricing power for the first movers that clear regulatory and technical hurdles.
This article is for informational purposes only and does not constitute investment advice.
