Valar Atomics, a startup building small modular nuclear reactors (SMRs) — essentially miniaturized, factory-built power plants designed to be cheaper and faster to deploy than traditional reactors — is in talks to raise a new round of capital, according to three sources familiar with the company. The three-year-old company is seeking a valuation of about $6 billion, and Sequoia is expected to lead the deal, the people said.

The Information was the first to report the funding discussions, including that the El Segundo, California, startup is raising a $1 billion equity round.

Part of that capital has been raised previously at a lower valuation, the people told TechCrunch. Specifically, Valar has raised $450 million — including $340 million in equity and $110 million in debt — at a $2 billion valuation, per a Bloomberg report in March.  

Deals structured in multiple installments at varying valuations, occasionally executed at different times, are becoming increasingly common in today’s AI-fueled fundraising environment. These deals can create the perception that capital was invested at a single, uniform valuation. In reality, investors in the same round can end up paying different prices for the same company — a distinction that matters more than ever as outsiders try to benchmark red-hot startups against one another.

Sequoia and Valar Atomics declined to comment.

Earlier this month, the company showed that its nuclear reactor provided a small amount of power to an Nvidia AI chip.  Concurrently with that proof-of-concept demonstration, Valar and Nvidia announced a partnership to explore the development of nuclear energy to power future AI data centers.

Valar’s rise is playing out against a broader demand crunch. Data center electricity needs are projected to grow sharply over the next several years, and utilities in many regions are years away from adding enough new capacity. That vacuum has turned nuclear power — long plagued by cost overruns and regulatory bottlenecks — into one of the more closely watched corners of the AI infrastructure boom.

Valar counts Palmer Luckey, the Anduril founder, and Shyam Sankar, Palantir’s chief technology officer, among its backers. Others chasing the opportunity include Kairos Power and TerraPower (backed by Bill Gates), which are building next-generation reactors aimed at tech and industrial customers, and NuScale Power, the only SMR developer with U.S. regulatory design approval. (Last year, it won approval for an upgraded, higher-output reactor design.)

Valar’s technology is based on a helium-cooled, high-temperature gas reactor. The company says it eventually plans to build hundreds of SMRs to power data centers. But while SMRs are theoretically cheaper to manufacture than traditional reactors, the technology is still nascent and it’s not at all clear how long it will take to be deployed at industrial scale.

In the background, Valar has taken an aggressive legal stance toward its regulator. Last year, it joined several states and rival startups in suing the Nuclear Regulatory Commission, arguing the agency wrongly applies the same lengthy licensing process to small test reactors that it uses for full-size commercial plants. (The case hasn’t been unresolved, with both sides repeatedly pausing litigation, which suggests some kind of settlement is in the works.)

The company was founded by Isaiah Taylor, who dropped out of high school when he was 16. The now-27-year-old has said he launched two startups before Valar and proudly shared that his great-grandfather worked as a nuclear physicist on the Manhattan Project.