Rolls-Royce, the iconic British engineering firm, is betting big on the future of small modular nuclear reactors (SMRs) as a way to power the artificial intelligence (AI) revolution and potentially become the UK's most valuable company. With a string of recent deals, a surging share price, and growing political support for nuclear energy, the company finds itself at the center of a transformative moment in British industry—one that could reshape the country’s energy landscape and its standing on the world stage.
According to the BBC, Rolls-Royce has signed agreements to provide six SMRs to the Czech Republic and is developing three more for the UK. These reactors are designed to address the soaring energy needs of next-generation AI data centers, which have boomed in popularity since 2022 but raised serious concerns about their environmental impact and electricity consumption. The company’s chief executive, Tufan Erginbilgic, is bullish about the prospects, telling the BBC that Rolls-Royce has the “potential” to overtake the largest firms on the London Stock Exchange. “There is no private company in the world with the nuclear capability we have. If we are not market leader globally, we did something wrong,” he said.
SMRs are a new breed of nuclear technology—smaller, faster to build, and potentially cheaper than traditional plants, with each unit costing up to $3 billion (£2.2 billion). Erginbilgic estimates that the world will need 400 SMRs by 2050, representing a trillion-dollar-plus market. The company’s ambition is nothing short of dominating this new frontier, leveraging its decades-long experience supplying reactors for nuclear submarines to bring the technology ashore.
But the road ahead is not without obstacles. As of now, there are no operational SMRs, making the technology unproven at scale. There are also environmental challenges: both SMRs and the data centers they would power place significant demands on water supplies for cooling. Still, tech giants like Google, Microsoft, and Meta have already inked deals to source energy from SMRs in the US once they come online, signaling confidence in the technology’s future.
The UK government has thrown its weight behind the SMR push, with Great British Energy – Nuclear (GBE-N) selecting Rolls-Royce as its preferred partner for a government-backed initiative to construct the country’s first three SMRs. The precise location is still up in the air, but a recent job advertisement for a site manager at Wylfa in Wales has fueled speculation that this site may be the frontrunner. The job listing, posted by GBE-N on August 11, called for candidates with “knowledge of Welsh planning and environmental regulations” and fluency in Welsh, both of which point toward Wylfa rather than the competing Oldbury site in England. The listing also referenced coordination with local stakeholders such as the National Trust and ecological groups—relevant since Wylfa is near the Cemlyn National Trust nature reserve.
Despite these clues, GBE-N insists that no final decision has been made. “No decision has been made on site allocation,” a spokesperson told New Civil Engineer. Nevertheless, the prospect of new nuclear development at Wylfa has energized local and national leaders. Plaid Cymru MP for Ynys Môn, Llinos Medi, has been vocal in her calls for the UK government to commit to a clear timeline for the project. “Wylfa is the best site for new nuclear in the UK, yet under successive governments, it has been left in political limbo,” she said. Medi emphasized the urgent need for well-paying, long-term jobs in the region, while also insisting that “any development must work with our communities on Ynys Môn. From an economic, social and linguistic perspective, our local needs must be respected.”
The Welsh Government has echoed this support, noting the substantial contribution nuclear projects have made to high-value employment in North Wales over the past 60 years. Wylfa, once home to the largest Magnox gas-cooled nuclear reactor in the UK, ceased electricity generation in 2015, with decommissioning underway since 2020. The site’s legacy as a nuclear hub makes it a logical candidate for the next phase of the UK’s nuclear ambitions.
Yet, for all the excitement, the UK’s nuclear sector faces significant structural hurdles. On August 12, the Nuclear Taskforce released its first-ever interim report, calling for a “once-in-a-generation” radical reform to unlock the potential of British nuclear projects. The report, as highlighted by the Taskforce lead John Fingleton, found the current system to be “unnecessarily slow, inefficient and costly,” hampered by complex, overlapping regulations and a culture of excessive risk aversion. The Taskforce’s early proposals include streamlining regulatory processes, updating planning frameworks to support new technologies like SMRs, and fostering a more proportionate approach to safety and risk management. The final recommendations are expected in autumn 2025.
Prime Minister Keir Starmer has seized on the moment, framing the nuclear push as central to Britain’s energy security and economic revival. “This country hasn’t built a nuclear power station in decades. We’ve been let down, and left behind. Our energy security has been hostage to Putin for too long, with British prices skyrocketing at his whims,” Starmer said. He pledged to “change the rules to back the builders of this nation, and say no to the blockers who have strangled our chances of cheaper energy, growth and jobs for far too long.”
Meanwhile, Rolls-Royce’s fortunes have soared under Erginbilgic’s leadership. Since he took the helm in January 2023, the company’s share price has increased ten-fold, and it expects to make a profit of over £3 billion in 2025. Global headcount has grown from 43,000 to 45,000, reflecting renewed confidence in its future. The turnaround is attributed by industry veterans to a combination of Erginbilgic’s aggressive strategy, a post-pandemic rebound in commercial aviation (Rolls-Royce’s largest business is still aircraft engines), and increased defense spending following Russia’s 2022 invasion of Ukraine. Notably, unions have expressed mixed feelings about Erginbilgic’s approach—he drew criticism for job cuts in 2023, but union sources now admit there is “grudging respect” for the company’s recovery.
Looking ahead, Rolls-Royce is not only seeking to dominate the SMR market but also to break into the lucrative $1.6 trillion narrow-bodied aircraft engine sector, currently dominated by CFM International. Erginbilgic argues this is “the single biggest opportunity for the UK for economic growth,” challenging anyone to find a rival prospect. Despite its storied history and the challenges it has faced, Rolls-Royce’s name remains synonymous with British engineering excellence.
As the government, industry, and local communities converge around the promise of SMRs, the coming months will be pivotal. The hope is that, with the right reforms and continued momentum, the UK can reclaim its place as a leader in nuclear innovation—powering not just AI, but a new era of energy security and industrial strength.
