The optimism usually radiating from billionaire Bill Gates when it comes to climate change is starting to fade on one of his biggest technology bets: nuclear power.

Driving the news: The Microsoft co-founder has focused much of his time lately on climate change and energy innovation. In an exclusive interview with Axios, Gates said that setbacks he is facing with TerraPower, a nuclear technology firm he co-founded in 2006, has got him questioning the future of that entire energy source.

The big picture: At 10% of global power supply, nuclear power is the second-largest electricity source (after hydropower) that emits no carbon dioxide. It’s declining in most places around the world, including the U.S., due to aging reactors, cheaper energy alternatives and public unease about radioactive risk — despite its benefits to addressing climate change.

The industry’s future is riding on largely unproven technologies like that of TerraPower because they’re smaller and deemed safer than today’s huge reactors.

“Without this next generation of nuclear, nuclear will go to zero,” Gates said during an interview in Washington last month. Germany is shutting 22 nuclear plants, France — a leader in clean-burning nuclear power — has plans to shut down some of its reactors and a similar trend is underway in the U.S. due to economic conditions, said Gates, before adding with a sigh: “So yes, it is daunting.”

Flashback: Gates announced in December that TerraPower was scrapping plans to build a demonstration reactor in China, largely due to the Trump administration deciding that fall to crack down on technological agreements between the two nations.

“There are times like when TerraPower gets told not to work in China, you’re thinking, ‘Boy, is this thing going to come together or not?’ ” Gates said in what are his first public comments on the matter since it happened. “That was a real blow.”

Where it stands: Gates is now trying to build TerraPower’s demonstration reactor in the U.S., calling on the Energy Department and Congress to more aggressively support advanced nuclear power through more funding and new legislation. Such a plant could cost anywhere between $3-$6 billion, say experts and Gates’ energy advisers.

Bellevue, WA-based TerraPower is opening a new 65,000-square foot facility in the same region later this year to expand its research and testing, which is currently done in a lab 1/6th that size.

Gates, whose net worth is roughly $100 billion, hasn't disclosed how much money he has put toward the company, but experts think it's at least $500 million.

“If at the end of the day we don’t find a country that wants to build an advanced nuclear power plant, then TerraPower will fail. I’m going to keep funding it for a period of years. And working with the U.S. is our strategy right now.”

— Bill Gates

What they’re saying: While Gates believes TerraPower has the most viable technology with the best chance of succeeding right now, numerous companies, led by NuScale, are pursuing other kinds that experts say could succeed where TerraPower isn‘t.

On strategy:

TerraPower made a big bet in 2015 working in China and with a government-owned entity. The thinking was that China has two things America doesn’t — growing electricity demand and a long-term strategic energy plan. But…

“TerraPower made a specific decision to focus on China for their first product and it hurt them when the current administration drew hard lines on U.S.-China collaboration,” said Todd Allen, a nuclear energy expert at the centrist think tank Third Way. “Companies like NuScale that have a U.S. focus for their first deployment do not have the same issue.”

On technology:

TerraPower’s technology, called the traveling wave reactor, would produce far less waste than current ones because it converts depleted uranium already considered a waste into fuel instead of creating new waste like today's tech.

Producing less waste is a big plus because big disagreement persists on how best to store radioactive waste.

But its technology is more unproven and more complex than its counterparts, experts say, and it’s ran into specific technical challenges, The Washington Post reported earlier this year.

By contrast, the Oregon-based NuScale uses technology more rooted in today’s type, which means it doesn’t need to build a demonstration plant, its chief commercial officer, Tom Mundy, said in an interview Friday.

“TerraPower’s traveling wave may prove to be an example of a very ambitious attempt to solve a very challenging problem that has turned out to be too expensive and too difficult,” said Chris Gadomski, head of nuclear research at Bloomberg New Energy Finance. “There are other simpler, easier ways to introduce advanced technology with less technology risk and financial burden.”

What I’m watching: NuScale, the first company to work with federal regulators in this area, is expecting a key review to be done by year’s end, final design approval by the second half of next year and — if all goes as planned — a reactor operating by 2026.