Billion-Dollar Investments Fuel the Race for Commercially Viable Fusion Power Plants

Over the past few years, fusion power technology has evolved from a subject of jokes to a realistic and promising sector that has attracted significant investment. The potential for commercial-scale fusion power plants to disrupt trillion-dollar industries is now a tangible possibility, driven by advancements in computer chips, artificial intelligence, and high-temperature superconducting magnets.

The progress within the industry can be attributed to these three key areas: more powerful computing capabilities, sophisticated AI applications, and advanced high-temperature superconductors. These developments have led to improved reactor designs, better simulations, and more complex control systems.

The turning point for fusion power came at the end of 2022 when a US Department of Energy laboratory achieved a controlled fusion reaction that generated more energy than the input from the lasers used in the experiment. This event marked scientific breakeven, signifying a significant step towards commercial viability, although there is still a long way to go until full commercial breakeven is reached.

In recent years, private companies have built on this momentum and accelerated the development of fusion technology at an impressive pace. One notable example is Commonwealth Fusion Systems (CFS), which has raised about a third of all private capital invested in fusion companies to date. CFS’s latest funding round, closed in August 2023, added $863 million to their funds, bringing their total investment close to $3 billion.

CFS’s flagship project is Sparc, a first-of-its-kind power plant designed to generate power at commercially relevant levels. Sparc utilizes a tokamak reactor design, featuring a doughnut-shaped chamber surrounded by high-temperature superconducting tape. When energized, these magnets create a powerful magnetic field that contains and compresses the superheated plasma. Heat generated from the reaction is converted to steam, driving a turbine to produce electricity.

CFS aims to have Sparc operational by late 2026 or early 2027, with construction of their commercial power plant, Arc, scheduled for later in the decade. Arc will be located near Richmond, Virginia, and Google has agreed to purchase half its output. The company is backed by numerous investors, including Breakthrough Energy Ventures, The Engine, Bill Gates, and others.

Another significant player in the fusion industry is TAE Technologies (formerly known as Tri Alpha Energy). Founded in 1998, this company uses a field-reversed configuration to achieve fusion, with a unique twist involving particle beams that maintain plasma stability and improve its spinning motion. This enhances the time available for fusion reactions and allows more heat to be extracted to drive turbines.

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

Helion is the most aggressive fusion startup in terms of timeline, aiming to produce electricity from its reactor by 2028. Its first customer will be Microsoft. Based in Everett, Washington, Helion uses a field-reversed configuration with a magnetic reactor chamber resembling an hourglass. Plasma is injected into the reaction chamber and compressed through a fusion process that generates electrical current within the reactor’s magnetic coils. This electricity can then be harvested directly from the machine.

Helion raised $425 million in January 2025, around the same time it turned on Polaris, a prototype reactor. The company has raised a total of $1.03 billion, according to PitchBook. Investors include Sam Altman, Reid Hoffman, KKR, BlackRock, Peter Thiel’s Mithril Capital Management, and Capricorn Investment Group.

Pacific Fusion entered the scene with a significant $900 million Series A funding round in 2023. The company will use inertial confinement to achieve fusion, utilizing coordinated electromagnetic pulses instead of lasers to compress fuel. Pacific Fusion is based in California.

Tokamak Energy’s ST40 prototype produced an ultra-hot, 100 million degree C plasma in 2022, while their next-generation Demo 4 prototype is currently under construction and aims to test the company’s magnets in fusion power plant-relevant scenarios. Tokamak Energy raised $125 million in November 2024 to continue its reactor design efforts and expand its magnet business.

Zap Energy, based in Everett, Washington, is another player in the fusion market, utilizing electric currents to compress plasma and generate its own magnetic field for confinement. The company has raised $327 million in funding, according to PitchBook. Investors include Bill Gates’ Breakthrough Energy Ventures, DCVC, Lowercarbon, Energy Impact Partners, Chevron Technology Ventures, and Bill Gates as an angel investor.

While most investors favor large startups using tokamak designs or inertial confinement approaches, Proxima Fusion is breaking the mold with a €130 million Series A round, bringing their total funds raised to over €185 million. Investors include Balderton Capital and Cherry Ventures.

Stellarators are similar to tokamaks in terms of plasma confinement using powerful magnets but offer greater stability by adapting the magnetic field to accommodate the plasma’s quirks. Marvel Fusion follows an inertial confinement approach, utilizing a laser system to compress fusion fuel pellets until they ignite. The target is made using silicon, which simplifies manufacturing due to decades of experience from the semiconductor industry.

Marvel Fusion is building a demonstration facility in collaboration with Colorado State University and aims to have it 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 shifted its focus to technology supply for fusion startups and other companies in March 2025, after initially pursuing an inertial confinement approach. Based in Oxfordshire, UK, First Light has raised $140 million in funding, according to PitchBook, from investors including Invesco, IP Group, and Tencent.

Xcimer takes a straightforward approach by redesigning the technology behind the National Ignition Facility’s breakthrough net-positive experiment from the ground up. The Colorado-based startup aims for a 10-megajoule laser system, five times more powerful than NIF’s setup. 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.