Texas Energy Provider Suggests Turning Navy Reactors Into AI Data Centers

A Texas-based power developer is proposing an unconventional approach to meeting the surging electricity demands of artificial intelligence data centers by repurposing retired U.S. Navy nuclear reactors from aircraft carriers and submarines to provide continuous carbon-free power.

HGP Intelligent Energy LLC has outlined the concept in filings with the U.S. Department of Energy, where it is seeking a federal loan guarantee under the government's energy financing programs. The proposal, known as the "CoreHeld Project," would deploy two decommissioned naval nuclear reactors at a purpose-built data center campus near Oak Ridge National Laboratory in Tennessee.

According to the proposal, the reactors would be used to deliver steady baseload electricity to support large-scale AI training and inference workloads, which require uninterrupted and predictable power.

The reactors under consideration are naval pressurized water reactors that have powered U.S. aircraft carriers and submarines for decades. These systems are designed for long operational lifetimes and have a track record of safe operation within the Navy's nuclear propulsion program.

HGP estimates the reactor would produce approximately 450 and 520 megawatts of power, with the total project cost projected to fall between $1.8 billion and $2.1 billion, translating to roughly $1 million to $4 million per megawatt.

If those estimates are accurate, the project could come in well below the cost of constructing a new conventional nuclear plant or deploying next-generation small modular reactors.

Despite the technical feasibility of repurposing naval reactors for civilian power generation, the proposal faces significant regulatory challenges. Naval reactors typically use highly enriched fuel and are designed as sealed systems, features that do not easily align with existing Nuclear Regulatory Commission licensing frameworks for commercial nuclear facilities.

Current regulations were not written with the reuse of military nuclear reactors in mind.

Still, HGP executives argue that the technical and operational experience already exists to carry out the project safely. In a statement to Bloomberg, HGP Chief Executive Gregory Forero said the company is confident in its ability to execute the plan, citing established nuclear expertise and backing from investors and strategic partners.

Whether HGP's plan can navigate the regulatory landscape remains uncertain, but the project highlights the lengths developers are willing to explore as demand for reliable power accelerates alongside the growth of artificial intelligence.