Improving nuclear reactor power system designs and fuel-processing technologies for safer and more efficient operation requires the development of new component designs. In particular, many of the advanced reactor designs such as the molten salt reactors and high-temperature gas-cooled reactors have operating environments beyond the capability of most currently available commercial components. To address this gap, new cross-cutting technologies need to be developed that will enable design, fabrication, and reliable operation of new classes of reactor components. The Advanced Sensor Initiative of the Nuclear Energy Enabling Technologies initiative is investigating advanced sensor and control designs that are capable of operating in these extreme environments. Under this initiative, Oak Ridge National Laboratory (ORNL) has been developing embedded instrumentation and control (I&C) for extreme environments. To develop, test, and validate these new sensing and control techniques, ORNL is building a pump test bed that utilizes submerged magnetic bearings to levitate the shaft. The eventual goal is to apply these techniques to a high-temperature (700°C) canned rotor pump that utilizes active magnetic bearings to eliminate the need for mechanical bearings and seals. The technologies will benefit the Next Generation Power Plant, Advanced Reactor Concepts, and Small Modular Reactor programs. In this paper, we will detail the design and analysis of the embedded I&C test bed with submerged magnetic bearings, focusing on the interplay between the different major systems. Then we will analyze the forces on the shaft and their role in the magnetic bearing design. Next, we will develop the radial and thrust bearing geometries needed to meet the operational requirements of the test bed. Finally, we will present some initial system identification results to validate the theoretical models of the test bed dynamics.