FusionXInvest: Cheerleading, Portfolios, and Hard Questions
The FusionXInvest Conference for 2025 took place this past week (Feb 11-14, 2025) at the Computer History Museum in Mountain View, CA, where we were surrounded by the history of some of the most significant innovations of the 20th century as we discussed one of the groundbreaking technologies for the 21st century. This was as much an energy investment event as a venue to discuss (not really a debate, folks played nice) the approaches to commercializing fusion, which was hosted by the FusionX Group, based in London, United Kingdom (UK).
Fusion Investment Cheerleading
It should not surprise anyone that the team at “The Fusion Report” are champions for fusion energy. The speakers on stage represented billions of dollars invested in fusion energy and were there to let other investors know they should join them. They also were clear that the time to invest is now because once the commercial versions are proven, this market will be worth “trillions of dollars,” and members of the audience, who are young investment bankers, want to get the fees for those IPOs. The big question was this: what will 20-25% of the energy market be worth in 10-15 years? The consensus is that it is going to be big. As big as AI will be, you can’t power the future of AI without electricity.
$12B Fusion Energy Industry Portfolio Approach
Interestingly, all of the major investors that spoke at the conference were hedging their bets across multiple companies and fusion machine technologies to find a winner when we get from dozens of First-Of-A-Kind options to 2-3 leaders we can build an industry around. Fusion energy research was primarily the realm of research universities and government laboratories from the 1950s until about a decade ago. In 2021, the fusion energy industry reached a record ~$5B in funding, according to FusionX, including the $1.8 billion Series B round for Commonwealth Fusion Systems. While 2022 through 2024 yearly investments were less than in 2021, they show a steady rise over pre-2021 levels, reaching roughly $3 billion in 2024 and a cumulative total of $12.9 billion. This amount, which includes committed funding, equity, and non-diluted investments, is a considerable number given that fusion energy has not put a single kilowatt of electricity on the public grid yet, and it shows how high expectations are for fusion energy.
The Triple Product Challenge
One of the significant focus areas of FusionXInvest was progress towards energy break-even, especially when compared to nuclear fission power. There are several “physics” reasons that fusion energy is so far “behind” nuclear fission energy as far as commercialization goes:
Fission is Self-Sustaining, While Fusion is Not: One of the good things about fusion is that it can never be a runaway chain reaction like nuclear fission can. One bad thing about fusion is that it is not self-sustaining, at least in earthly conditions.
Recreating the Conditions Required for Fusion is “Really Hard”: The only places in the universe (that we know of) where fusion has resulted in the net creation of energy are stars and thermonuclear weapons. For fusion to occur, the right combination of temperature, pressure/density, and containment time, known as the “triple product” (also known as the Lawson Criteria), must be achieved.
Fusion Energy Requires Many Technologies That Are Just Emerging: Achieving the right conditions requires a combination of technologies just becoming available. These include high-temperature superconductors, high-power lasers, extreme vacuum pumps, and thermal blankets (just to name a few).
While there are several competing approaches to achieving sustained fusion energy, including magnetic confinement fusion (MCF), inertial confinement fusion (ICF), and some hybrid approaches such as stellarators, Z-pinch machines, and others, the most critical measure of how far along each of these approaches are is how close they are to achieving the “triple product.” While only one approach has made it so far (the National Ignition Facility), several approaches are creeping closer to exceeding what NIF achieved. Moreover, these approaches are not just shooting for an “ignition event” as NIF reached – they are looking for sustained fusion energy conditions.
The Top Fusion Companies and When They Will Achieve Fusion
The other item that was clear from FusionXInvest is that in the fusion energy world, size matters – specifically, the total size of the investment. The five biggest fusion energy companies by investment are:
Commonwealth Fusion Systems (CFS): With over $2 in funding from sources such as Bill Gates’s Breakthrough Energy Ventures, Eni, Khosla Ventures, and Tiger Global, CFS is by far the most well-funded player in fusion energy today. CFS’s SPARC fusion machine and its successors are expected to achieve fusion by the 2030s.
TAE: TAE has been in the fusion game since 1998 and has raised $1.32 billion for its efforts. Its variation of the reversed-field approach is supported by several “spin-off” like product lines.
Helion Energy: With over $1B in investments, Helion is arguably the most aggressive of the top fusion players. It expects to achieve fusion by 2028.
Pacific Fusion: One of the newest fusion energy companies and only slightly behind its $1B+ compatriots, Pacific Fusion has raised $900 million in their Series A funding raise. They expect to achieve scientific breakeven next year (in 2026).
General Fusion: With over $441 million in total funding, General Fusion is pursuing an approach known as magnetized target fusion. They expect to achieve scientific break-even by 2026.
Zap Energy: Zap Energy, which is developing a novel approach to fusion energy using sheared flow, has raised $327 million in funding. Its modular reactors are expected to achieve scientific break-even in the early 2030s.
Each of these companies is developing not only its fusion systems but also several of the technologies required to commercialize fusion energy. This is not only one reason that fusion energy is taking so long but also why these companies need as much funding as they have achieved.
The Hard Questions of Fusion Energy
FusionXInvest also focused a couple of sessions on potential downsides for fusion companies. The two most essential caveats for fusion energy companies and investments are:
Diversify Your Revenue Sources, but Stay On the Roadmap: If a fusion company can create secondary products producing revenue before achieving fusion, it de-risks the investment. Like the space program and defense breakthroughs, fusion energy can and has spawned many “spin-off” technologies that have value outside of fusion energy. The most “prolific” of these spinoff technologies is high-temperature superconductor (HTS) tapes, which can be used to build next-generation medical imaging devices, extremely low-loss power transmission lines, and other profitable products. However, the key to making these “side hustles” work is not having them impact your fusion roadmap.
For Supply Chain Companies, Your Risks May be Greater: There is an old saying in venture capital: “A startup that has another startup as one of its key customers and/or suppliers is most likely to fail.” This is a critical issue for supply chain companies – those who build components for fusion energy companies. While the investors in fusion energy companies (hopefully) know and understand their risks, the same cannot always be said for supply chain companies that provide products. For producers of existing products for multiple markets, this is not (necessarily) a big issue. Still, it is a genuine concern for supply chain companies focused on building new products for fusion. Fusion supply chain companies must also have parallel markets to drive revenues and capture the fusion energy market when it arrives in full force.
Fusion: A “Hot” Investment
On the positive side, fusion energy appears to be the type of power source the Trump administration seeks – broadly available, high reliability, dispatchable power. Finally, the fact that private investments in fusion energy far outweigh federal investments by roughly 10:1 means that fusion is relatively immune to the whims of federal research and development funding. It looks like fusion energy is still a “hot topic” regarding next-generation energy resources.