Our thanks to Nadia Schadlow, Senior Fellow at the Hudson Institute, for the opportunity to participate in “The National and Economic Security Implications of Fusion Energy” panel discussion this week at their offices in Washington, D.C. The panel featured Jackie Siebens of Helion Energy, Caleb Barnes of the Special Competitive Studies Project (SCSP), Trent Bauserman of Commonwealth Fusion Systems, and Shaun Walsh of Peak Nano, and focused on the need to build an allied nation supply chain and deepen partnerships with friendly nations to both win the race for commercial fusion energy and develop the supply-chain industrial base to support a multi-trillion-dollar industry.

From Recovery to First-Mover: A New Manufacturing Paradigm

The panel dug into the challenges facing the U.S., including the current state of energy, infrastructure, and power availability, and gaps in the domestic supply chain, butJackie Siebens summed it up best, saying, “We must move from operating in a recovery strategy, which is how I would describe CHIPS and the Inflation Reduction Act, as those are not first-mover policies…The overarching framing I want everybody to take away from this: this is our moment with Fusion and AI to stop getting ourselves into situations where we're having to pass these enormous bills to recover things we never should have lost in the first place.”

• Be First, Don’t Play Catch-Up: The U.S. has the opportunity, and should be first in the fusion energy supply chain. We need to adopt a different strategy than we did with semiconductors, solar panels, and lithium batteries. If we act now to incentivize domestic production, we avoid the astronomical costs of future “recovery” efforts.
• Industrial Base as Deterrent: Building the manufacturing capability to produce fusion machines at scale is a strategy to ensure that the global industrial standards of the next century are rooted in American and allied soil.
• Capturing the Value Chain: Securing an allied supply chain will/can protect the “secret sauce” for every element of fusion energy systems, components, and source materials, such as advanced material coatings, new metallurgy, lasers, HTS magnets, and hundreds of thousands of other components. Today, we must ensure that the economic benefits of fusion stay domestic/allied rather than being offshored to adversarial nations.

Hyperscalers As Energy Giants: AI, Data Centers, and the New Grid

The confluence of fusion energy, artificial intelligence (AI), and quantum computing represents a once-in-a-century strategic opportunity for U.S. leadership. Hyperscalers (Microsoft, Google, Meta, Oracle, Amazon) are no longer passive consumers of electricity; they are transforming into active participants in power generation, distribution, and grid transmission.

Powering the AI Revolution

AI is outstripping the power grid’s capacity. A single AI query can consume ten times more energy than a traditional Google search, and hyperscale AI campuses now present concentrated, near-continuous loads reaching 1 GW or more—equivalent to powering a million homes.

Direct Generation and “Firm” Clean Energy

Hyperscalers are increasingly bypassing traditional utilities to secure “firm” (24/7) clean energy to meet their aggressive net-zero commitments:

• Microsoft and Helion: Microsoft signed a first-of-its-kind Power Purchase Agreement (PPA) with Helion Energy, aiming for grid-connected fusion power as early as 2028.
• Google and CFS: Google has partnered with Commonwealth Fusion Systems (CFS) and invested in Kairos Power for a fleet of small modular reactors (SMRs).
• Meta and Prometheus: Meta recently announced a 1 GW “Prometheus” AI cluster in Ohio, backed by nuclear deals with TerraPower and Oklo to provide nearly 7 GW of new carbon-free energy by 2035.

By investing in fusion and advanced fission, these companies are effectively financing the commercialization of first-of-a-kind energy technologies that will eventually add massive amounts of clean baseload power to the public grid and make them major power players in electricity.

The Strategic Funding Gap: China’s Outspending of the U.S.

The global competition for fusion supremacy is currently defined by a stark divergence in investment strategies. While the United States leads in private sector innovation through dozens of "fusion unicorns," a new $450M fund was announced this week by Inertia Enterprises, co-founded by Twilio’s former CEO Jeff Lawson, fusion physicist Dr. Andrea “Annie” Kritcher, and fusion power plant designer Prof. Mike Dunne. This again demonstrates private markets’ commitment to fusion energy, which must be matched by federal funds. Today, China is outspending the U.S. and EU in terms of capital, regulations, education, and supply chains, leveraging massive state-directed capital to build the foundational infrastructure and talent pool required to dominate the market.

By the Numbers: Public vs. Private Investment

The financial landscape shows a clear divide between the two nations:

• Public Funding Disparity: Consensus reports indicate that China invests between $1 billion and $1.5 billion annually from state budgets into fusion research, nearly double the U.S. government's typical annual fusion budget of approximately $800 million.
• State vs. Private Models: The U.S. model is heavily led by private capital, accounting for 94.5% of its total investment. In contrast, the Chinese fusion industry is 71.2% state-led, allowing for longer-term strategic coordination across its industrial base.
• Massive Capital Influx: In 2025 alone, China established the China Fusion Energy Corporation with a starting capital of $2.1 billion to serve as a national hub for industrializing its "artificial sun" projects.

The Infrastructure and Talent Advantage

China’s spending is targeted at achieving "China speed" through massive, multi-shift projects:

• Human Capital: China currently produces roughly 10 times as many PhDs in fusion science and engineering as the United States.
• Physical Infrastructure: Beijing has completed a massive fusion technology campus and launched a national consortium that integrates its largest industrial companies to streamline the transition from lab to grid.
• Patent Dominance: Since 2015, China has approved more fusion-related patents than any other nation, signaling a concerted effort to own the intellectual property of the next energy era.

The Risk of Falling Behind

Industry leaders warn that without a decisive shift in policy, the U.S. risks becoming a follower in an industry it pioneered.

• Stagnant Federal Support: While private U.S. companies have raised over $10 billion for fusion, federal funding growth has remained largely stagnant.
• Competitive Speed: Experts suggest that China’s ability to mobilize state resources, including 24/7 construction shifts, gives it a distinct advantage in building first-of-a-kind demonstration plants.
• Capturing the Export Market: If the U.S. does not match China’s scale and speed, the clean energy export industry of the future could be dominated by Chinese standards and technology, much as the current solar and battery markets are.

The SCSP Supply Chain Report

The Special Competitive Studies Project (SCSP) Fusion Supply Chain Report provides a strategic plan for how the United States can lead the "trillion-dollar" global race to commercialize fusion energy and secure its industrial base. Moving beyond traditional scientific research, the SCSP supply chain analysis underscores that fusion leadership is now a geopolitical necessity, a decisive factor in securing national security, energy dominance, and technological supremacy over strategic competitors such as China. 

Caleb Barnes from SCSP provided a sobering warning about the dangers of losing out on industrial leadership: "For decades, we lost our industrial capacity overseas in the pursuit of short-term profits. Fusion is far too important a technology to let this play out again. We need to organize now, while the future supply chains are being formed, to ensure the U.S.'s share in what will be a global technology, and protect ourselves from relying on hostile nations." 

• Preventing the Slip: Unlike the semiconductor or solar industries, the fusion manufacturing base is currently being born in the West. If we act now to incentivize domestic production, we avoid the astronomical costs of future "recovery" efforts.
• Industrial Base as Deterrent: Building the manufacturing capability to produce fusion machines at scale ensures that the next century’s global industrial standards are rooted in American and allied soil.
• Capturing the Value Chain: By securing the manufacturing of high-precision components today, we ensure the economic benefits of fusion stay domestic rather than being offshored to strategic competitors.

During the panel, Trent Bauserman commented, “When we started to build our SPARC demonstration machine, one of our largest supply chain challenges was finding enough high-temperature superconducting (HTS) tape to build our magnets. Ultimately, Commonwealth Fusion Systems successfully secured enough HTS tape to build the SPARC demonstrator, but the global supply chain is currently nowhere near the scale required for commercial.” He continued, “This is just one of many supply chain strategic risks for the fusion energy community. Without investment, thoughtful policy support, and cooperation, our industry could struggle to transition from a single experimental machine to a global fleet of thousands of ARC power plants in just a few decades.”

The Special Competitive Studies Project (SCSP) identifies the following critical vulnerabilities:

Component / Material	Risk Level	Current Market Reality
Enriched Lithium-6	High	Essential for breeding tritium fuel; no domestic commercial supply exists.
HTS Tape	Medium-High	Necessary for compact magnets; China has taken a lead in production volume.
High Power Switches	Medium-High	Critical for pulsed fusion; engineering expertise is currently spread globally.
Helium-3	Medium-High	Highly scarce; primarily sourced from tritium decay or lunar regolith.
Laser Diodes	Medium-High	Critical bottleneck for laser fusion; China leads in constituent materials like gallium.
Capacitor Dielectric Film	Medium-High	No U.S. supply for base plastic materials and no volume dielectric film manufacturing.

 

Building a Fusion Industrial Base in the U.S. and Allied Nations

To build a high-quality domestic supply chain, the U.S. must prioritize regulatory certainty and strong industrial incentives.

• 45X and 48C Parity: One of the most immediate policy needs is granting tax credit parity to fusion. Expanding manufacturing tax credits to include fusion-specific components—like HTS tape, specialized power electronics, and high-strength forgings—is a critical next step.
• The ADVANCE Act: Signed into law in July 2024, the ADVANCE Act codified the NRC's decision to regulate fusion under the byproduct materials framework rather than as fission reactors. This gives developers and investors a predictable licensing pathway and positions the U.S. as only the second country after the UK to enshrine fusion-specific regulations in law.
• Strategic Sourcing: The U.S. government should leverage the Defense Production Act to secure materials such as beryllium and tungsten to shore up supply chains that also serve the aerospace and defense sectors.

Setting the Global Standards and Coordination

Coordination and proactive engagement between international bodies such as the U.S., UK, EU, Japan, Korea, and Canada are vital to keeping fusion deployment aligned with democratic values.

• Democratic Standards: By collaborating with the UK on radiation-resistant robotics and fusion-grade steels, we can set global safety and operational standards that prevent a “race to the bottom” led by authoritarian regimes.
• Allied Resilience: Strategic partnerships with nations like Japan (HTS tape/gyrotrons), Germany (precision optics), and Canada (tritium) are vital to building a secure, non-adversarial supply chain.

It is Time for the U.S. To “Do,” Because China Is.

To paraphrase Yoda’s famous line, “There is no try, only do or do not.” Make no mistake... China is doing well and is determined to win. The time for academic curiosity is over; we are now in an industrial MMA fight for the future of global energy. The United States stands on the precipice of history: we can either lead and own this multitrillion-dollar industry by building a 21st-century manufacturing backbone, or watch China do it again, as they have in dozens of markets, because we want to innovate and engineer, but fail to build.

China is not waiting for "one more study" or "better data." They are pouring billions into 24/7 construction and massive state-led consortia to ensure they become the OPEC of the fusion era. If we let the fusion supply chain slip away now, there will be no "resharing" a decade from now; we will simply be an impoverished observer in a world powered by our competitors.

This is a once-in-a-century strategic window in which the arrival of AI, quantum computing, and fusion energy converge to offer the West an unassailable edge, but only if we treat this like the national security emergency it is. Industry is ready and willing to build, but it cannot fight a state-subsidized dragon with one hand tied behind its back by regulatory lag and stagnant federal support. We must stop playing catch-up with yesterday's technologies and start playing to win with tomorrow's technologies. 

How do we do it?

• Implement Immediate 45X Parity: The Fusion Advanced Manufacturing Parity Act (H.R. 5441 / S. 3088) is a bipartisan, bicameral initiative introduced in late 2025 to ensure the American fusion industrial base remains competitive against state-backed rivals such as China. This act will extend the Section 45X Advanced Manufacturing Production Credit for fusion-specific components such as HTS tape, high-voltage capacitors, and specialized forgings to provide the "demand signal" domestic suppliers need to scale today.
• Codify Regulatory Certainty: Congress must permanently codify the NRC’s decision to regulate fusion under the Part 30 framework for accelerators, ensuring that billion-dollar investments aren't stalled by a "fission-style" regulatory quagmire.
• Establish a National Fusion Fuel Reserve: Launch a strategic initiative to secure and stockpile critical materials, specifically Enriched Lithium-6 and Tritium, to ensure our domestic machines aren't held hostage by foreign supply chokepoints.
• Aggressively Fund the First-Mover Advantage: The U.S. government must immediately pass a one-time $10 billion supplemental appropriation, as championed by the Fusion Industry Association (FIA), to split funding between critical commercialization milestones and the large-scale infrastructure needed to outpace China’s state-led energy dominance.
• Strengthen an Allied Industrial Bloc: The U.S., UK, EU, Japan, Korea, and Canada must coordinate to set global standards for fusion deployment, ensuring the "manufacturing backbone" of the world remains aligned with democratic values and free from adversarial interference.

The race is on. We either build the future here, or we buy it from there. The choice is ours, and the clock is ticking.