What The U.S.-Saudi Nuclear Deal Means for the American Nuclear Industry
Oversight and transparency Will Guide What Comes Next
By Spencer Toohill
Last night, the Trump Administration announced a series of diplomatic agreements with Saudi Arabia, including a long-anticipated civilian nuclear cooperation agreement. The announcement caps more than a decade of intermittent negotiations between the U.S. and Saudi Arabia over a potential civilian nuclear deal. While the defense and economic implications of the pledged deals will take center stage, the civilian nuclear agreement will not only influence Saudi Arabia’s economic development but also the strength and direction of the U.S. nuclear industry.
Key details about the deal have yet to be publicized, but the signed “Joint Declaration on the Completion of Negotiations on Civil Nuclear Energy Cooperation” is a further step towards finalizing a 123 agreement between the U.S. and Saudi Arabia. Agreements under section 123 of the Atomic Energy Act govern the transfer of U.S. civilian nuclear technology, equipment, and materials to foreign countries. These agreements require Congressional approval and are mandatory for American civilian nuclear technology to be exported.
Those opposed to a 123 agreement with the Saudis have raised the risk that a civilian nuclear program would pave the way for Saudi Arabia to acquire a nuclear weapon. Others have argued that a Saudi civilian nuclear program would also push Iran to complete the final steps to build a nuclear warhead.
But, the claim that a U.S-Saudi civilian nuclear deal is an accelerator to proliferation lacks credibility. By signing the Joint Declaration with the United States, Saudi Arabia is voluntarily opening their entire nuclear sector to American nonproliferation standards and international scrutiny; which would otherwise be lacking under a deal with another country. An agreement with the U.S. limits the possibility of turning civilian-grade nuclear materials into weapons because sensitive processes like enrichment and reprocessing are frequently checked, and can even be excluded if agreed upon by the parties.
Ultimately, inking a civilian nuclear deal that would see the United States export reactor technology to Saudi Arabia would be a boon for a U.S. nuclear industry that has been dominated by Russia in the global export market. Exporting reactors to Saudi Arabia would provide the industry with opportunities for more learning-by-doing, which can reduce overall costs of reactor construction and help to expedite domestic deployment of advanced reactors.
A Nuclear Deal Was a Long Time Coming
For more than a decade, Saudi officials have signaled that they view nuclear energy as central to the country’s economic diversification and long-term strategic positioning.
In President Trump’s first term, his administration pursued a deal to share U.S. nuclear technology with Saudi Arabia, allowing preliminary work on nuclear power as a precursor to a final nuclear cooperation agreement. Those efforts ultimately stalled when the Biden administration refrained from finalizing a deal with Saudi Arabia.
Given the Trump administration’s interest in exporting more nuclear technologies and competing for the global nuclear reactor market, the deal with Saudi Arabia should not be surprising. In May, President Trump signed a quartet of executive orders to spur the American nuclear industry. Notably, Executive Order 14299, Deploying Advanced Nuclear Reactor Technologies for National Security, acknowledged the importance of nuclear energy in American foreign policy and national security. The order specifically directs the Secretary of State to aggressively promote American nuclear exports through diplomatic engagement and negotiation of 123 Agreements.
Early in 2025, the Trump administration and Saudi officials hinted at revived talks on a possible 123 agreement, but no announcements were made and further negotiations were not publicized. Last night’s agreement is just the next step in that process. According to a White House fact sheet, the deal “builds the legal foundation for a decades-long, multi-billion-dollar nuclear energy partnership with the Kingdom; confirms that the United States and American companies will be the Kingdom’s civil nuclear cooperation partners of choice; and ensures that all cooperation will be conducted in a manner consistent with strong nonproliferation standards.”
With the Joint Declaration now complete, all that is left is finalizing the formal agreement under Section 123 of the Atomic Energy Act.
What Does the Deal Mean for U.S. Nuclear?
A civilian nuclear agreement with Saudi Arabia materially strengthens the American nuclear industry at a moment when global demand for new reactors is rising and international competitors, particularly Russia and China, are moving aggressively to capture emerging markets.
For U.S. reactor developers, the most immediate benefit is simple: reactor orders. The American nuclear sector has spent decades without new large-scale international customers, leaving companies trapped in a cycle where limited deployment constrains learning, which in turn keeps costs high and timelines long. A Saudi project, likely involving multiple reactors, would provide exactly the kind of operational learning that historically drives down costs and accelerates commercialization. A similar dynamic is already visible next door in the UAE, where the Barakah project—facilitated by the U.S.-UAE 123 Agreement—has shown how early reactor orders can build competence, reduce costs, and reinforce long-term industrial capability.
Saudi Arabia also has the capital to finance first- to nth-of-a-kind reactors, which can allow designs to move down the cost curve and become globally competitive. In the United States, utilities are structurally risk-averse when it comes to projects with very high upfront capital costs, whether it’s large gigawatt-scale plants or next-generation SMRs. American utility business models reward cost certainty, not technological ambition, and they face regulators who are understandably cautious about saddling ratepayers with multi-billion-dollar construction risks. As a result, many U.S. reactor developers find themselves trapped in a catch-22: they cannot achieve lower costs without deployment, but they cannot achieve deployment without lower costs. Foreign orders can break that cycle.
With the fiscal capacity and political will to finance early builds, Saudi Arabia can provide the market demand that allows U.S. designs to demonstrate performance, achieve serial production, and reduce costs through improved efficiency. A Saudi orderbook would help build up the U.S. nuclear supply chain. But, while a 123 agreement creates the legal pathway for U.S. exports, it does not dictate when or where the first reactors would be built. While the Trump administration could push for an early domestic success, Saudi Arabia could move more quickly than American utilities constrained by capital costs and regulatory risk. Ultimately, the combination of domestic and foreign demand is what rebuilds an industry that has gone decades without either. Multiple reactor projects create predictable, multi-year demand for steel, forgings, instrumentation and control systems, construction labor, and fuel production. That stability allows suppliers to scale, modernize, and invest while developers and end users are able to point to firm partnerships, projects, and prices.
Beyond the industrial benefits on U.S. soil, the Saudi nuclear partnership would strengthen America’s competitive position in a global market dominated by state-backed rivals. Russia, through Rosatom, is currently the dominant exporter of nuclear reactors, with major multi-reactor projects underway in Turkey, Egypt, and other countries. Such agreements guarantee long-term fuel, servicing, and financing packages that bind partner countries to Moscow for decades. China is moving in the same direction. Every country that opts for Russian or Chinese reactor technology creates a 100-year relationship between them. As global demand accelerates, the countries that show up with competitive offers will shape the next generation of nuclear markets.
The Deal Is Also a Win for Nonproliferation
Saudi Arabia was going to pursue a civilian nuclear program with or without the United States. Even with the agreement signed, Saudi Arabia can still buy reactors from the French, the Koreans, or maybe even the Chinese. And whether they signed or not, the Saudis could easily buy enrichment technology from the same place that Libya, Iran, and North Korea did: Pakistan.
That has been the largest sticking point over a deal with Saudi Arabia. But explicitly waiving enrichment and reprocessing technology is not necessary for a 123 agreement—it’s only been a stipulation in one previous agreement. The United States’ approach to nuclear cooperation agreements and nonproliferation standards has been steadfast. No matter the specific stipulations agreed to across different 123 Agreements, transparency and oversight to another country’s nuclear operation is demanded by any American 123 agreement. Not to mention, international oversight and safeguards have only improved since the U.S. started exporting civilian nuclear technology. Saudi Arabia has, after over a decade of negotiation, arrived at the signing table knowing the United States’ position on nonproliferation—suggesting the Saudi’s intent to uphold the deal.
The joint agreement signed yesterday gives the United States a role in setting conditions, imposing oversight, or influencing the direction of a Saudi nuclear program. Cooperation provides an opportunity to shape nuclear development toward transparent, peaceful use in the Gulf. Blocking engagement would not have eliminated Saudi Arabia’s long term strategic calculations; it would have only limited America’s visibility and leverage.
A U.S. 123 agreement will require Saudi Arabia to accept more stringent international safeguards and will produce a more transparent program than if Saudi Arabia had partnered with China or Russia. Those alternatives would have likely involved less rigorous oversight and higher proliferation risks, not to mention, a loss for U.S. industry.
Saudi Arabia values its links to the United States and has repeatedly signaled a preference for American nuclear technology. Riyadh likes the credibility and prestige that comes with U.S. partnerships. Building nuclear bombs while having U.S. reactor technology within a negotiated nonproliferation framework would have a very steep cost and would be technically difficult. And, Crown Prince Mohammed bin Salman’s comments suggest that if Saudi Arabia ever pursued a weapon, it would be a political decision, and it would not begin with a transparent, heavily monitored civilian nuclear program.
Crossing the T’s and Dotting the I’s
The “Joint Declaration on the Completion of Negotiations on Civil Nuclear Energy Cooperation,” secures a U.S. role in the growth and development of Saudi Arabia’s nuclear future. It preserves U.S. influence in the region and allows for the safeguarding of nuclear technologies. It also is the next step towards a new market for U.S. reactor developers who need reactor orders to secure financing, improve efficiency, and lower costs for the U.S. domestic market.
Next to come is the finalized and signed 123 Agreement, which President Trump will then send to Congress for review. The details of the agreement will carry enormous weight, setting the terms under which the United States can maintain influence, ensure transparency, and keep the program firmly within peaceful bounds. A well-crafted 123 agreement should build in safeguards, including prohibitions on reprocessing spent fuel, robust verification measures, and close cooperation with the International Atomic Energy Agency. It should also defer sensitive issues, such as domestic enrichment, until a future date or create an alternative mechanism, providing flexibility while keeping concerns in check.
Whether Saudi reactor orders materialize immediately or take shape over several years, the agreement gives American developers access to a new market with energy demands and plenty of capital—both of which are key to making the American nuclear industry competitive again.