Q2 2025 Fusion Energy Funding and Deals
A changing quarter for fusion companies
Since the start of The Fusion Report, one of the areas that we have reported on is funding events, especially private funding events, for fusion energy companies. According to our own accounting of these events, nearly $8.4 billion in private funding has been invested into fusion energy (this excludes private funding in China, where funding information is fairly opaque). Of these investments, over 80% have been in U.S. companies.
What makes this quarter different is that actual deals for electricity produced by fusion energy are starting to happen. Most notably, a deal between Google and Commonwealth Fusion Systems (CFS) for 200MW of energy from CFS’s planned Chesterfield County, Virginia Affordable, Reliable, Compact (ARC) fusion machine was announced on the last day of June 2025. While not the first “commercial” fusion deal (Helion’s May 2023 deal to sell 50MW of capacity to Microsoft in 2028 has that honor), the Google-CFS deal is seen by many as the first fusion opportunity with specific terms. We will explore this opportunity, as well as Q2 2025 funding that has occurred, below.
Q2 2025: Funding Slows as Economic Uncertainty Grows
While 2024 was not a “banner year” for fusion energy funding (that belongs to 2021), it wasn’t terrible – roughly $1.6 billion in private capital was raised (approximately $400 million per quarter). 2025 started out strong, with over $562 million raised. The “headliner” in Q1 was Helion Energy’s January 2025 $425 million funding round, which pushed Helion over the $1 billion mark in funds raised (it is almost certain that this deal was in the works since mid-2024). Q2 2025 however, is a different picture – only (slightly over) $300 million was raised, with Proxima Fusion raising $148 million, and TAE Technologies raising a similar $150 million. This puts 2025 slightly ahead of the pace of 2024, with $862 million raised in 1H 2025 – a little higher than the average per quarter in 2024.
While there are a lot of factors that may be responsible for this showdown in funding, two specific ones stand out:
Refocus of U.S. Government Energy Policy: To say that the focus of the Trump 2 administration’s energy policy differs from that of the Biden administration would be an understatement. The Biden administration was focused on investments in non-polluting energy like renewables and fusion, largely through the Infrastructure Investment and Jobs Act of 2021, and the Inflation Reduction Act (IRA) of 2022. The Trump administration has chosen to go in a radically different direction, reducing the Department of Energy (DoE) investment in new energy sources, cutting tax credits for renewables, and “streamlining” the permitting of large new oil and gas programs. While fusion energy has not been “targeted”, the change in direction certainly has a chilling effect on fusion investments.
Tariffs, Government Spending, Immigration, and Tax Cuts: While the overall effect of Trump’s policies is mixed, tariffs have significantly weakened investor confidence, which negatively impacts the venture capital (VC) markets, exclusive of artificial intelligence (AI) investments. Supply chain worries have also increased, further negatively coloring the overall investment picture.
The bad part of these trends is that Chinese investment in fusion energy has significantly increased, as shown in the illustration at the start of this article. This threatens the leadership of the U.S. (and western world) in the race for fusion energy.
A Positive Sign: Commercial Fusion Energy Deals
The most positive sign in Q2 2025 was the deal for CFS to sell Google 200 MW of electrical capacity from their upcoming Chesterfield, Virginia ARC fusion plant. This deal, which is for 50% of the plant’s capacity, greatly increases the likelihood of this plant’s success by “back-ordering” capacity. It also will help cement fusion energy’s position as an electricity supplier for data centers. The importance of this, which is reinforced by the Helion-Microsoft deal of a couple of years ago, is that data centers are the fastest growing electricity consumption sector in the U.S. economy. Given that data centers are expected to grow from 4.4% of U.S. electricity consumption in 2023 to up to 12% in 2028, the importance of powering data centers will be critical to the success of fusion energy.
Conclusion: A Mixed But Positive Outlook For Fusion Energy
While it is safe to assume that it will be a while before fusion again sees investments of the levels achieved in 2021, the importance of actual electricity deals for fusion will become more important, and will be the driver of late-stage fusion energy investments. In that sense, Q2 2025 is pivotal. Hopefully, this trend will continue, even if only for the larger fusion companies.
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