Bill Gates Says China Is Outspending the World on Nuclear Power

China is emerging as a fierce competitor to the US in the race to build small modular reactors and fusion that can help power data centers.

In the race to develop the next generation of nuclear reactors, China is increasingly challenging the US and other countries for dominance, according to tech billionaire Bill Gates.

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“Their fusion and fission work is very impressive,” the Microsoft Corp. co-founder said of China’s nuclear innovation efforts. The country is investing more in fusion “than the rest of the world put together, times two,” he added.

China has a commanding lead in developing and manufacturing a wide range of green solutions, including electric cars, solar panels and batteries, as well as materials essential to the energy transition like rare earth minerals. Advanced nuclear reactors are one of the few areas where it has yet to attain a similar major advantage.

There are many hurdles for the nuclear industry globally, including regulatory approvals, building a supply chain for next-generation fuel and, in the case of fusion, delivering net-energy in the first place.

Yet there’s growing interest in small modular reactors as well as nuclear fusion as countries scramble to find new power sources to meet growing data center demand. In the US, data centers are expected to make up roughly 9% of the total electricity usage by 2035, more than double 2024 levels, according to an April report published by BloombergNEF. That rising demand will drive $350 billion boom in spending on nuclear power, according to a recent Bloomberg Intelligence report.

Gates sees nuclear power as a way to provide data centers with the power they need as well as to lower electricity costs. Artificial intelligence is driving up utility bills, a trend Gates said will be compounded by more widespread adoption of heat pumps and electric cars. While the US has abundant natural gas resources — the fuel accounted for nearly half of the country’s power generation in 2023 — “we don’t have infinite natural gas,” he said.

In the long run, “probably either fission or fusion will be the cheapest way to make electricity,” he added. For now, though, both fusion and advanced fission technology remain costly and unproven.

Breakthrough Energy Ventures — a climate investment firm Gates founded — has bankrolled several nuclear startups, including fusion pioneer Commonwealth Fusion Systems and TerraPower, which is developing next-generation fission reactors. The latter was also founded by Gates.

Unlike other carbon-free energy sources such as wind and solar, nuclear power has the support of the Trump administration. When speaking at a Utah summit in October, US Energy Secretary Chris Wright told his audience that “nuclear is going to become sexy again.” He served on the board of Oklo Inc., a small modular reactor startup, prior to joining the Energy Department.

A growing number of big tech companies from Microsoft to Alphabet Inc.’s Google have inked power purchase agreements with nuclear startups to secure future electricity supply. But Gates says there is still a long way off for those startups to deliver electricity at scale.

“Nuclear as a whole won’t be a gigantic contributor to data center electricity until 2035, and that’s assuming everything goes well,” he said.