Only several years ago, few could imagine a short-term path to widespread commercialization of fusion energy. Research was largely sustained by government funding, and the technology was widely seen as perpetually decades away from commercial viability.
“If you walked into a room of fusion scientists in 2018 or 2019 and said there were going to be fusion startups, and venture capital funding to the tune of $9 billion, you would have been laughed out of the room,” says Nuno Loureiro, the director of MIT’s Plasma Science and Fusion Center (PSFC).
The fusion landscape today is entirely different, thanks to research breakthroughs that have sparked an unprecedented infusion of investment dollars. Commonwealth Fusion Systems (CFS) recently closed an $863 million Series B2 funding round, bringing the MIT spinoff’s total capital raised to nearly $3 billion. The UK government recently announced a £2.5 billion commitment to fusion development, Germany committed €2 billion, and the Shanghai government has created a ¥10 billion fund to support fusion research. And in October, the U.S. Department of Energy published a roadmap identifying key steps the U.S. needs to take by the mid-2030s to lead the world in commercial fusion energy deployment, including expanded public-private partnerships.
When CFS announced its latest funding round in August, investors talked about fusion as a potentially world-changing technology. “Achieving commercial, affordable fusion power would be one of the most transformative milestones in human history—delivering clean, limitless energy to help strengthen energy security and improve global living standards,” said Carmichael Roberts, managing partner at Breakthrough Energy Ventures.
By 2100, fusion could provide anywhere between less than 10% to about 50% of global electricity generation in a “deep decarbonization” scenario, according to a 2024 MIT Energy Initiative report. More immediately, fusion could serve facilities like data centers, whose operators are willing to pay a premium for a reliable source of clean energy.
“If we had power plants today, we could sell them all day, every day,” says Ally Yost, the senior vice president of corporate development at CFS. “The demand is just through the roof.”
From demonstration to commercialization
Fusion is the process of combining two light atomic nuclei to form one heavier nucleus. It’s the same process that fuels stars, and it releases a massive amount of energy. Unlike traditional nuclear energy (produced in a process called “fission”), fusion does not create long-lived nuclear waste or pose significant safety risks. For decades, many have seen fusion as eventually becoming the ultimate clean energy option.
In 2021, CFS and MIT’s PSFC made a major breakthrough when they demonstrated that their high-temperature superconducting (HTS) magnet technology could produce a magnetic field strong enough for the design of compact fusion devices. The next year, an experiment at the National Ignition Facility at Lawrence Livermore National Laboratory in California achieved fusion ignition, meaning that the reaction produced more energy than the amount of laser energy used to create the reaction.
These results, combined with a growing ability to rapidly simulate experiments at a low cost using artificial intelligence, have led to increased expectations—and increased funding—for fusion, since many of the most fundamental science questions about the technology have already been answered.
“The way I look at it, fusion is not a science problem,” says Randall Field, the director of research at the MIT Energy Initiative. “It’s really an engineering problem.”
CFS is hoping to solve that engineering problem in the coming years. In 2027, the company expects that its SPARC demonstration device in Devens, Massachusetts will become the “world’s first commercially relevant” fusion machine to achieve net energy generation. In parallel to finishing SPARC, CFS is working on permitting, project development, and design for ARC, the company’s first commercial generation plant, located in Virginia. CFS plans to connect ARC to the grid in the early 2030s.
Fusion has the potential to be one of the lowest-cost sources of energy, Yost says. “We think that even our early power plants will be economical,” she said.
As commercial generation plants come online, the fusion industry will start to see costs decline due to economies of scale—supply chains will become more efficient; manufacturing will scale; and innovations will result in more durable parts, reducing downtime and lowering overall operating expenses.
The road ahead
Yost notes that around $1 out of every $12 in the world is spent on energy, making it the largest sector of the economy. “The market is massive,” she says. “People are literally arguing over how many trillions it is. In my view, there is plenty of room for more than one winner to deliver power plants at the same time, but being first has its benefits.”
Loureiro calls CFS “very serious,” but he also says it’s an “open question” whether it is realistic to expect that fusion power will become commercially viable by the early 2030s. He notes that fusion startups are racing not only against each other, but also with the advances being made in other sources of clean power. “All of these companies are pursuing very aggressive timelines, because it’s a competition with advanced nuclear and geothermal,” he says.
Loureiro notes that the race for fusion also has geopolitical implications, with China and others striving to be the first to produce fusion energy at scale. Despite the influx of private capital, U.S. government funding for fusion has been largely flat for two decades, he says, with annual spending hovering around the same amount as the CFS Series B2 round.
“This is a very advanced technology, and whatever nation masters it first is going to have an incredible advantage,” Loureiro says. “There is a moonshot opportunity here, a version of the Apollo program. But you cannot fund a disruptive technology with non-disruptive levels of money.”
“Disruptive” could be an understatement. Depending on the eventual cost of building fusion power plants, the facilities have the potential to “increase societal value today” by between $3.6 trillion and $8.7 trillion, states the 2024 report from the MIT Energy Initiative. “These benefits provide economic and social justification to invest in developing cost-effective fusion energy,” write the report’s authors, who include Field.
Although many see the current moment as an inflection point, Field says that fusion’s story will play out not over just the next few years, but over decades. “People sometimes ask, will fusion come too late? And the answer is no, it won’t come too late, because the movement to clean energy will be happening throughout the century,” he says. “But the sooner we get it, the better for the business, and the better for society.”