Crusoe and Aalo Partner to Build Nuclear-Powered AI Factory
Strategic partnership aims to deploy small modular sodium-cooled reactors for high-density compute clusters
Crusoe and nuclear startup Aalo Atomics have entered into a strategic partnership to deploy the first small modular reactor-powered AI data center. The collaboration aims to bypass traditional grid-interconnection queues by generating clean, on-site energy directly for high-density AI workloads.
Key details
Under the strategic partnership announced in July 2026, the companies plan to build and test a nuclear-powered "AI Factory" data center. The collaboration is structured in two distinct phases to validate on-site nuclear energy for intensive AI model training and inference:
- 2027 Pilot Program: Aalo Atomics will initially power a 1 MWe Crusoe Spark modular data center unit running Crusoe Cloud. This proof of concept will be deployed on federal land at the Idaho National Laboratory (INL).
- Reactor Technology: The pilot will utilize Aalo's 10 MWe experimental Aalo-X reactor, a modular design that uses sodium as a coolant and low-enriched uranium dioxide as fuel. The Aalo-X test reactor achieved criticality on July 4, 2026, under the U.S. Department of Energy's (DOE) Reactor Pilot Program.
- 2029 Commercial Scale-Up: Following the INL pilot, the companies plan to deploy the 50 MWe Aalo Pod power plant at Crusoe’s commercial data centers by the end of 2029. Each Aalo Pod will house five factory-built, sodium-cooled Aalo-1 reactors.
Why this matters
The rapid rise of generative AI has created unprecedented demand for data center power, leading to years-long queues for standard utility grid connections. An on-site, behind-the-meter small modular reactor (SMR) offers an alternative that bypasses transmission constraints and avoids grid-interconnection queues entirely, while delivering continuous, carbon-free baseload power at a fixed cost profile once the reactor is constructed.
Context
This is Crusoe’s second major nuclear energy partnership, following a previous agreement with modular developer Blue Energy. It reflects a broader industry-wide push by hyperscalers and infrastructure developers to secure clean energy for AI. The International Energy Agency (IEA) has tracked a near-doubling of the global SMR pipeline tied to data center operators, surging from 25 gigawatts at the end of 2024 to 45 gigawatts in 2026. Other major players have pursued similar pathways, including Google's agreements with Kairos Power and Microsoft's nuclear supply plans.
Risks and open questions
The primary risk for Crusoe and Aalo lies in the transition from testing to commercial deployment. While Aalo's Aalo-X test reactor operated under a faster regulatory pathway on federal land at INL, scaling the 50 MWe Aalo Pod off government land will require navigating the Nuclear Regulatory Commission's (NRC) standard commercial licensing process, which has historically taken years. Additionally, factory-built modular reactors remain an unproven manufacturing model at scale, and the nuclear sector is historically prone to significant capital cost overruns.
What happens next
The initial 1 MWe Crusoe Spark modular unit is scheduled to begin operations at INL in 2027, serving as a live pilot to demonstrate the technical compatibility of SMR power with dynamic, high-density AI compute loads. Operators and energy analysts will closely monitor the pilot's performance and Aalo's progress toward securing NRC commercial licenses ahead of their 2029 commercial deployment target.
Source: Capacity Published on AI Usage Global, author: AUG Bot
