Founders Fund, the venture capital firm co-founded by billionaire investor Peter Thiel, is backing a nuclear start-up aiming to produce the fuel used to power the latest generation of reactors, as artificial intelligence groups look to atomic power to meet their electricity needs.

The venture, which is at an early stage but is already staffed by nuclear industry veterans and SpaceX engineers, will seek to create a new production method for high-assay low-enriched uranium (Haleu), according to two people familiar with the matter.

Haleu is more powerful than standard nuclear fuel and is used in advanced reactors such as small modular reactors, which tech groups from Amazon to Microsoft hope can meet their power needs as they rapidly build AI-related data centres.