Nuclear-powered AI? Rolls-Royce thinks it’s the future ⚡🤖

Rolls-Royce announced its small modular reactors (SMRs) could power the energy-hungry data centres driving AI. If true, this would give the company a shot at becoming the UK’s most valuable company.

📢 What’s happening?

The UK government has picked Rolls-Royce to build the country’s first SMRs, investing £210m of public money, matched by £280m from private investors.

SMRs are compact, factory-built nuclear plants. They are twice as fast and 25% cheaper to build than traditional reactors, with the potential to power about 1.5 million homes per year.

To speed things up, the government have begun relaxing nuclear safety rules, arguing current regulations are slowing progress. This includes cutting out steps in approval processes, which critics warn could increase safety concerns and harm public confidence of nuclear projects.

So far, Rolls-Royce have already secured deals with the UK and Czech Republic, projecting the global SMR market to grow to over $1 trillion by 2050.

💡 Why does it matter?

If Rolls-Royce are right, SMRs could transform both energy and technology industries completely. They would give the UK a way to produce low-carbon power on a massive scale, while meeting the growing electricity demands of AI and other digital technologies.

Unlike renewable energy sources (wind, solar, hydropower), which only generate when the weather allows, nuclear power can run continuously. This makes SMRs a valuable source of ‘baseload’ power. The steady, 24/7 supply the grid needs to keep the lights on even when the wind isn’t blowing, or the sun isn’t shining. As we strive towards a renewable-heavy future, that reliability will be essential for balancing the grid and avoiding fossil fuel back-ups.

With faster build times and lower upfront costs, more countries will be able to afford nuclear power, opening up a multi-billion-pound export market for the UK. If successful, Rolls-Royce could become a leading supplier with first-mover advantage in a sector where long-term supply contracts last for decades.

This added stability could be a game-changer for the wider UK economy, creating thousands of skilled jobs, boosting local supply chains, and attracting more investment into manufacturing and infrastructure.

What does this mean for law firms?

🏗️ Projects & Infrastructure teams will be at the heart of SMR deployment. Each plant involves multi-billion-pound construction, complex procurement, and multi-year timelines. This means more work for:

• 🔍 Construction lawyers - Drafting and negotiating engineering & construction contracts, handling delay and defect claims, and managing risk allocation between contractors and the government.
• 📑 Procurement lawyers - Advising public bodies and private investors on compliant tender processes, contract awards and supply challenges under international procurement rules.

• 🛠️ Infrastructure finance lawyers - Structuring funding for SMR projects, which could combine government guarantees, private equity, export credit agencies, and green investment funds.

⚡ Energy & Regulatory teams will guide the legal framework for bringing SMRs online, ensuring compliance with nuclear safety, environmental, and energy market laws. This means increased demand for:

• ☢️ Nuclear regulatory lawyers - Securing site licences, safety case approvals, and liaising with the Office for Nuclear Regulation (ONR) to meet strict compliance standards.
• 🌱 Environmental lawyers - Managing environmental impact assessments, biodiversity offsetting, and long-term waste disposal obligations.
• 📊 Energy market lawyers - Drafting power purchase agreements (PPAs), navigating Ofgem regulations, and ensuring SMRs integrate smoothly with renewable-heavy grids.

🤝 Corporate & Commercial teams will also benefit as SMRs create a supply chain boom, especially in advanced manufacturing to tech partnerships. More work here for:

• 📜 Commercial contracts lawyers - Negotiating supply, distribution, and technology licensing deals for SMR components, including cross-border trade terms.
• 💻 Technology & IP lawyers - Protecting proprietary SMR designs, software, and fuel technologies while licensing them to overseas partners.
• 🏢 Corporate lawyers - Advising on joint ventures, equity investments, and acquisitions as companies position themselves in the SMR supply chain.

How UK & US Firms May Be Impacted?

SMR projects are so large and extensively regulated that only firms with proven experience in nuclear infrastructure, and high-value energy work will be instructed to act on them. Here are some firms in this space that may see work increase in SMR projects:

📌 3 UK Firms Likely to See an Impact

• A&O Shearman - Have a long track record in major UK nuclear projects such as Hinkley Point C, Wylfa Newydd, and Sizewell C, advising on financing, supply-chain contracts, and regulatory approvals.
• Burges Salmon - Specialist nuclear and SMR team advising across the full lifecycle, from licensing to decommissioning. Partner Ian Truman previously worked on EDF Energy’s Hinkley Point C and Sizewell C projects.
• CMS - Strong energy and infrastructure practice with recent hires to boost nuclear capabilities, including experience in SMR development, finance, and vendor selection.

📌 3 US Firms Likely to See an Impact

• Latham & Watkins - Recently advised advanced reactor developer X-energy on a $500m financing round for its Xe-100 SMR and fuel facility. Experienced in first-of-a-kind nuclear infrastructure transactions.
• Hogan Lovells - Long-standing nuclear expertise, including advising on U.S. export control laws for nuclear technology and working closely with the Nuclear Regulatory Commission on licensing and compliance.
• Hunton Andrews Kurth - Extensive global nuclear experience, from conventional reactors to SMRs. Advised RoPower Nuclear S.A. on deploying the first SMR in Europe (NuScale VOYGR-6 in Romania) in 2024.

🎯 Student Takeaway

The government’s backing of Rolls-Royce’s SMRs signals a major shift in the UK’s energy strategy. For law firms, that means a surge in work from financing and procurement to environmental compliance and cross-border licensing. This is a clear example of how policy decisions translate into legal demand across multiple practice areas.