The “Yin and Yang” of Fusion Funding
Private investment surges as governments take diverging paths
Three important announcements related to the commercialization of fusion energy occurred this week. Unsurprisingly, these announcements point in very different directions regarding the future of fusion energy. Let’s examine each of these, and what they mean for fusion energy.
Helion Announces a $425 Million Funding Round
Yesterday, Helion announced closing a Series F funding round for $425 million from Lightspeed Venture Partners, SoftBank Vision Fund 2, and existing investors. This funding round, made at a post-money valuation of $5.4 billion, and raises the total money raised by Helion to over $1 billion. “We are on the brink of delivering a transformative energy solution that can meet the world’s increasing electricity demands while preserving U.S. energy leadership,” said David Kirtley, Helion’s co-founder and CEO. “Our mission has always been focused on rapidly developing and deploying safe, reliable fusion generators that provide abundant, affordable electricity. Earning the support of such a prestigious group of investors is a testament to our progress in both solving hard scientific and technical challenges and tackling the practical realities of building hardware to commercialize a brand-new technology.”
Helion has recently demonstrated Polaris (its 7th generation system), which they expect to demonstrate the first electricity to be generated from fusion energy. If successful, this will put Helion in a great position to deliver on its agreements to deliver power to Microsoft from a 50 MW power plant starting in 2028, as well as providing a 500 MW power plant to Nucor Steel in the 2030s. The biggest positive of the Helion funding announcement is that it closed roughly a week after Donald Trump’s inauguration, and a day after…
Donald Trump’s OMB Announces Freezing of Federal Grants and Loans
Two days ago, Donald Trump instructed his Office of Management and Budget (OMB) to freeze all federal grants until the OMB can review them. These federal grants also appear to include those to fund fusion research programs through the Department of Energy. The freezing of these funds appears to be a clear violation of the Nixon-era Impoundment Act (at least according to most legal scholars), and has itself been blocked by federal judge Loren AliKhan in response to a lawsuit by a number of nonprofit groups. However, given recent rulings by Trump’s Supreme Court that appear to ignore previous precedent, an appeal of this could eventually end up in favor of Trump’s administration. Of course, the scope of this freeze primarily falls upon a vast number of programs, and fusion research grants are only a small part of the grants affected; however it is entirely possible that these grants will be re-activated. Which brings us to the third announcement this month…
UK AeA Awards a Record Investment for Development of Fusion Energy
Going the other (apparent) direction of the Trump Administration, UK Energy Secretary Ed Miliband announced the award of £410 million for fusion energy development in 2025 and 2026. The UK government sees fusion as being critical to accelerating technological growth in Great Britain, and not only by providing large amounts of clean power through leadership in fusion energy. “After scientists first theorized over 70 years ago that it could be possible, we are now within grasping distance of unlocking the power of the sun and providing families with secure, clean, unlimited energy,” said Miliband. Slightly earlier in the week, the UK government also announced the UK’s first AI growth Zone at Culham, Oxfordshire to deliver the UK’s first fusion plant, known as the Spherical Tokamak for Energy Production (STEP).
What Does All of This Mean for Fusion Energy?
There are two key takeaways from these announcements:
The Private Sector Believes in the Potential of Fusion Energy: Note that the investment in Helion is a late-stage investment (Series F), and comes on the heels of Trump’s election to the US presidency. Furthermore, private investments in fusion in 2024 totaled $6.7B, far in excess of US government investments by at least an order of magnitude.
Regardless of the US Federal Government’s Position, Other Countries Are Investing in Fusion Energy: It is clear that other countries see the potential in fusion energy. In addition to the US, other western European countries, Japan, and Korea are all investing considerably in fusion. Additionally (and more worrisome), China is expected to invest between $1B and $1.5B per year into fusion.
A slowdown (or stoppage) of US government investments in fusion is not likely to have more than a minor impact on the commercialization of fusion energy. The more likely outcome would be a negative impact to international fusion research efforts such as ITER, but that would damage the perception of US leadership in this area, providing China with at least a perceptual (and possibly political) advantage as fusion comes of age.
Finally, commercializing fusion energy is clearly both difficult and challenging. As Dr. Marcus Roth, Chief Science Officer of Focused Energy (a US/German private fusion company) stated, “Fusion isn’t rocket science – if it were, it would have been done in the 1960s. Fusion is much harder!”. From an investment standpoint, it has more risks than many investments, but it also has far greater returns if successful, something the private sector and many countries realize.