Nuclear Startup Deep Fission to Launch Second Public Offering—Unresolved Questions Remain!

This week, a news story caught my attention as it felt oddly familiar. The nuclear startup Deep Fission has announced plans to go public, aiming to raise funds for developing underground reactors designed to power AI data centers.

Wait, didn’t I cover this before? I could have sworn I did.

Oh yes, that’s correct; I did. In September, Deep Fission unveiled its plans for a public offering through a reverse merger with Surfside Acquisition, a Delaware-based shell company. This strategy allowed the private firm to amalgamate with an existing public entity for market entry, and they raised $30 million through a concurrent private placement at $3 per share. Now, they are looking to secure $157 million via a Nasdaq IPO, with initial share prices projected between $24 and $26 each. It’s easy to see how this could cause some confusion.

It appears that the previous public listing was somewhat misleading. Despite completing the merger with Surfside, which established Deep Fission as a reporting entity with SEC obligations, its stock has yet to be publicly traded. The company intended to list on the OTCQB, which is designed for developing firms that do not meet the requirements of larger exchanges like the NYSE or Nasdaq. However, searches for Deep Fission on OTCQB yield no results, and the company noted in its S-1 filing that its shares have never been publicly traded.

When TechCrunch reached out for comments, Deep Fission declined to respond, citing its quiet period prior to the IPO.

Deep Fission’s upcoming Nasdaq offering takes a more traditional IPO route, potentially valuing the company at up to $1.66 billion—a significant advancement for a firm that struggled to finalize a $15 million funding round just a year ago.

What’s even more puzzling is the less favorable outlook in the S-1 submitted on May 20 compared to the previous filing in December with the SEC. The schedule for launching its first reactor has faced delays, and although the company previously aimed for criticality—where a nuclear chain reaction becomes self-sustaining—by July 2026, no updated timeframes have been provided.

Deep Fission does assert that it is presently drilling a test well, but it has encountered notable financial challenges.

One constant: The new S-1 still includes the “going concern” warning first highlighted in the December filing, suggesting that if Deep Fission fails to execute the IPO, it may deplete its funds within the next year.

Indeed, the startup’s financial condition has worsened, with its deficit escalating to $88.1 million from $56.2 million as of March. Over the past month and a half, the company’s cash and cash equivalents have diminished by $6.4 million, or approximately 7%.

Technically, Deep Fission claims its focus is now on drilling, implying that this process is more intricate than it appears.

The company began drilling its first of three test wells in March. This well aims to collect data “up to 6,000 feet deep.” Sporting an eight-inch diameter, it is considerably smaller than what will be required for commercial operations.

Transitioning from a test well to full commercial scale is likely to be challenging. Deep Fission mentions the need for boreholes between 30 to 50 inches in diameter and extending up to a mile deep, although the exact dimensions remain unresolved. Even at the minimum size, these boreholes would surpass typical dimensions used in the oil and gas industries. Until Deep Fission determines the appropriate borehole size, finalizing its reactor design will be difficult.

So, what has shifted since December that might justify a larger offering at a nine-figure valuation? The firm has secured an $80 million equity investment, which includes $20 million from data center developer Blue Owl, which also signed a non-binding MOU for future power plants. However, this hasn’t been adequate to remove the going concern warning. It’s possible that Deep Fission possesses undisclosed positive information not reflected in the S-1, although, given the stakes of the IPO, that seems improbable.

It’s more likely that the company and its investors are keen to take advantage of the growing interest in fission power. Just last month, nuclear fission startup X-energy successfully completed an IPO. However, in contrast to Deep Fission, X-energy is generating revenue and is considerably further along in the licensing process with the Nuclear Regulatory Commission—underscoring that in a field where enthusiasm can often overshadow technical and regulatory realities, valuation and progress are not synonymous.

While it remains unclear what is motivating Deep Fission toward its IPO, it does not seem to be based on substantial technological or commercial progress.