Breakthrough in Fusion Power: Top Investors Pour Billions into Pioneering Startups Aiming for Limitless Energy

Over the past several years, fusion power technology has transitioned from a subject of jokes to an increasingly tangible and promising field that has drawn significant investment. The potential for this technology to harness nuclear reactions, similar to those that power the sun, and generate virtually limitless energy on Earth, has the capacity to disrupt trillion-dollar markets if commercially viable fusion power plants can be successfully developed.

The growth in the fusion industry can be attributed to three key advances: more powerful computer chips, more sophisticated AI, and high-temperature superconducting magnets with increased capabilities. These advancements have enabled more complex reactor designs, better simulations, and sophisticated control schemes.

In late 2022, a U.S. Department of Energy laboratory announced the achievement of a controlled fusion reaction that produced more power than the energy imparted by the lasers used to fuel the reaction. This development marked a significant step as it signified the crossing of scientific breakeven, though there is still a long way to go before commercial breakeven, where the reaction produces more power than the entire facility consumes, is reached.

The momentum in the private fusion sector has been strong in recent years, with startups driving rapid progress in the field.

Commonwealth Fusion Systems (CFS) has attracted about a third of all private capital invested in fusion companies to date. The company’s latest round, which concluded in August, added $863 million to its funds, bringing its total raised close to $3 billion. CFS’s Series B2 followed its $1.8 billion Series B in 2018, propelling the company into a leading position. Since then, the startup has been working tirelessly in Massachusetts on Sparc, its first-of-its-kind power plant designed to generate power at “commercially relevant” levels.

Sparc’s reactor is a tokamak design that resembles a doughnut. The D-shaped cross section is wrapped with high-temperature superconducting tape, which generates a powerful magnetic field when energized, used to contain and compress the superheated plasma. Heat generated from the reaction is converted into steam to drive a turbine. CFS collaborated with MIT on the development of its magnets, where the co-founder and CEO Bob Mumgaard worked as a researcher on fusion reactor designs and high-temperature superconductors.

CFS expects Sparc to be operational by late 2026 or early 2027. By the end of this decade, the company plans to begin construction on Arc, its commercial power plant capable of producing 400 megawatts of electricity. The facility will be built near Richmond, Virginia, with Google purchasing half of its output.

CFS boasts a long list of investors, including Breakthrough Energy Ventures, The Engine, Bill Gates, and others.

Founded in 1998, TAE Technologies (formerly known as Tri Alpha Energy) was spun out of the University of California, Irvine by Norman Rostoker. It employs a field-reversed configuration design, but with a twist: after the two plasma shots collide in the reactor’s center, the company bombards the plasma with particle beams to maintain its shape as a cigar. This improves the stability of the plasma, allowing more time for fusion to occur and heat to be extracted to spin a turbine.

In June 2023, TAE raised $150 million from existing investors, including Google, Chevron, and New Enterprise. The company has raised $1.79 billion in total, according to PitchBook.

Helion, based in Everett, Washington, has the most aggressive timeline among fusion startups. The company aims to generate electricity from its reactor in 2028, with Microsoft as its first customer. Helion uses a field-reversed configuration design, where magnets surround a reaction chamber that looks like an hourglass with a bulge at the point where the two sides meet. At each end of the hourglass, they spin the plasma into doughnut shapes that are shot toward each other, igniting fusion reactions. The neutrons released by the fusion reaction bombard a liquid metal blanket that surrounds the reactor, heating it up. The heated liquid metal is then cycled through a heat exchanger, where it produces steam to drive a turbine.

Like Helion, Zap Energy is based in Everett, Washington, and has raised $327 million, according to PitchBook. Bill Gates’ Breakthrough Energy Ventures, DCVC, Lowercarbon, Energy Impact Partners, Chevron Technology Ventures, and Bill Gates as an angel are among its backers. Instead of using high-temperature superconducting magnets or powerful lasers to confine its plasma, Zap Energy uses electric currents to generate a magnetic field that compresses the plasma about 1 millimeter, at which point ignition occurs. The neutrons released by the fusion reaction bombard a liquid metal blanket that surrounds the reactor, heating it up. The heated liquid metal is then cycled through a heat exchanger, where it produces steam to drive a turbine.

Most investors have favored large startups pursuing tokamak designs or some form of inertial confinement. However, stellarators show great promise in scientific experiments, including the Wendelstein 7-X reactor in Germany. Proxima Fusion is bucking the trend by attracting €130 million in Series A funding, bringing its total raised to more than €185 million. Investors include Balderton Capital and Cherry Ventures.

Stellarators are similar to tokamaks in that they confine plasma in a ring-like shape using powerful magnets. However, they do it with a twist — literally. Instead of forcing plasma into a human-designed ring, stellarators twist and bulge to accommodate the plasma’s quirks. The result should be a plasma that remains stable for longer, increasing the chances of fusion reactions.

Marvel Fusion follows an inertial confinement approach, the same basic technique that the National Ignition Facility used to prove that controlled nuclear fusion reactions could produce more power than was needed to initiate them. Marvel fires powerful lasers at a target embedded with silicon nanostructures that cascade under bombardment, compressing the fuel to the point of ignition. Since the target is made using silicon, it should be relatively simple to manufacture, leveraging the semiconductor manufacturing industry’s decades of experience.

The inertial confinement fusion startup is building a demonstration facility in collaboration with Colorado State University and expects it to be operational by 2027. Munich-based Marvel has raised a total of $161 million from investors including b2venture, Deutsche Telekom, Earlybird, HV Capital, and Taavet Hinrikus and Albert Wenger as angels.

First Light abandoned its pursuit of fusion power in March 2025, pivoting instead to become a technology supplier to fusion startups and other companies. The startup had previously followed an approach known as inertial confinement, in which fusion fuel pellets are compressed until they ignite.

First Light, based in Oxfordshire, U.K., has raised $140 million, according to PitchBook, from investors including Invesco, IP Group, and Tencent.

Though nothing about fusion can be described as simple, Xcimer takes a relatively straightforward approach: follow the basic science behind the National Ignition Facility’s breakthrough net-positive experiment, and redesign the technology that underpins it from the ground up. The Colorado-based startup is aiming for a 10-megajoule laser system, five times more powerful than NIF’s setup that made history. Molten salt walls surround the reaction chamber, absorbing heat and protecting the first solid wall from damage.

Founded in January 2022, Xcimer has already raised $109 million, according to PitchBook, from investors including Hedosophia, Breakthrough Energy Ventures, Emerson Collective, Gigascale Capital, and Lowercarbon Capital.