Home / Companies / Start-ups /  Nuclear-fusion startup lands $1.8 billion as investors chase star power

No one has been able to generate net energy by combining atoms, yet Commonwealth Fusion Systems has attracted Bill Gates and George Soros

Commonwealth Fusion Systems LLC said it has raised more than $1.8 billion in the largest private investment for nuclear fusion yet as startups race to be the first to generate carbon-free energy like the sun.

Big-name investors backing the latest funding round for the Massachusetts-based company include Microsoft Corp. co-founder Bill Gates and George Soros via his Soros Fund Management LLC. Some of Commonwealth Fusion’s competitors, including Helion Energy Inc., have also recently secured huge funding as investors pile into clean energy technologies amid growing concerns about climate change.

Nuclear fusion has long been the holy grail of the energy world. Fusion is the process of generating energy by melding atoms. Current nuclear power plants create energy through nuclear fission, or splitting atoms. Fusion has the potential to create nearly limitless energy using common elements such as hydrogen, and has the added benefit of generating little to no long-lived nuclear waste.

But despite decades of research, no one to date has been able to produce net energy through fusion—or more energy than it takes to create a fusion reaction. Private firms are vying to be the first not only to create net-energy machines, but to commercialize them by delivering electricity to the grid on the scale of a power plant.

“Everything is science fiction until someone does it and then all of a sudden it goes from impossible to inevitable," said Bob Mumgaard, chief executive of Commonwealth Fusion, which was spun out of the Massachusetts Institute of Technology in 2018.

The recent infusion of cash into fusion startups eclipses the roughly $1.9 billion in total that was previously announced, according to data tracked by the Fusion Industry Association and the U.K. Atomic Energy Authority.

Helion Energy announced in early November that it had raised $500 million, with another $1.7 billion committed that is tied to meeting performance milestones. Canada’s General Fusion this week closed a $130 million fundraising round that was oversubscribed, said Chief Executive Christofer Mowry. New investors included a state pension fund and the hedge fund Segra Capital Management.

“It’s a sign of the industry growing up," Mr. Mowry said. General Fusion plans to launch a larger fundraising effort next year.

Companies are pursuing different designs for fusion reactors, but most rely on fusion that takes place in plasma, a hot charged gas. In September, Commonwealth Fusion successfully tested the most powerful fusion magnet of its kind on Earth that would hold and compress the plasma.

Mr. Mumgaard said the magnet test and funding round allow it to move to the next big step in its evolution: building a net-energy fusion machine that it plans to demonstrate by 2025. It also plans to begin work on the first commercial fusion power plant that would produce electricity by the early 2030s.

New investors supporting Commonwealth Fusion’s most recent funding round include Alphabet Inc.’s Google, Inc. Chief Executive Marc Benioff’s TIME Ventures and Silicon Valley venture-capital firm DFJ Growth.

Vinod Khosla, co-founder of Sun Microsystems, was an early backer through his Khosla Ventures. He said he had the same reaction to the fusion company as he did to Impossible Foods Inc., the plant-based alternative meat maker, considering both critical for addressing climate change.

“My general view is there’s quite a few things in society that don’t get funded when they should, and frankly, some things in life are just too important to not fund," Mr. Khosla said. His interest isn’t philanthropic, though; he said he sees an opportunity for a big financial return on fusion.

“If you’re wrong, you lose one times your money. But if you’re right, you make 100 times your money," Mr. Khosla said. “Financially, it made sense."

Until someone proves it, though, fusion won’t shake its reputation as a technology that is always around the corner. The world’s largest fusion project is ITER, a $22 billion multinational government-funded project in France. Scientists say the project, which has experienced delays, is on track to create superheated plasma by the end of 2025. Full fusion would come a decade later.

There are many skeptics of fusion as a near-term source of electricity. Retired Princeton University research physicist Daniel Jassby, a frequent critic, calls the recent private investment trend a “fusion frenzy" and notes that no one has produced electricity from fusion yet.

“A lot of it is fake it ‘till you make it," Mr. Jassby said.

Tony Donné, program manager for a 28-country research consortium known as EUROfusion, said he likes the industrial approach of private companies, but thinks getting fusion power to the grid is likely to take 20 to 30 years.

David Kirtley, Helion’s chief executive, said he once counted himself among the skeptics. After studying fusion in graduate school, “I actually said, I quit," Mr. Kirtley said. “I didn’t see a path where in my lifetime we were going to build a real system and get it out there."

He pivoted to building spacecraft propulsion systems, but improvements in fields like fiber optics and computing convinced him that there was a path forward for commercial fusion.

This summer, Helion published results confirming it had become the first private firm to heat a fusion plasma to 100 million degrees Celsius, which it called the ideal temperature for a fusion power plant. It also broke ground on a facility in Everett, Wash., where it says it will demonstrate net electricity generation by 2024.

The company’s recent funding round included commitments from Facebook Inc. co-founder Dustin Moskovitz and Sam Altman, the former head of tech incubator Y Combinator.

Adam Stein, a senior nuclear energy analyst at the Breakthrough Institute, a California-based research center, said he expects successful demonstrations of net energy this decade by some of the leading private fusion companies. But he also thinks some firms will fail.

“Net positive energy is a long distance away from net positive power, which is a system that can put out more power than it uses, ultimately as electricity on the grid," Mr. Stein said. “These are still demonstration projects we’re looking at."


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