Imagine we had a way to make electricity at a dirt cheap cost, as much as we want, anytime we want, without requiring any rare material, without emitting a single molecule of greenhouse gases (GHGs), and leaving no hazardous or radioactive waste!

If not all, half of the world’s problems would get solved, you might be tempted to believe. 

Well, this is exactly the promise of Nuclear Fusion. How is that possible?

Let’s first talk about the science behind this magic, then the companies pursuing it, the investors supporting it, and finally the geopolitical aspects of the technology. 

 Hence the piece is broadly broken into the following sections:

While we urge you to go through the entire piece as a journey, feel free to hop around the sections that interest you.

The Science of Nuclear Fusion

Let’s see where these promises come from. But before that, if you’re wondering what is all the fuss about when we already have Nuclear power plants for quite some time now. 

There are two things we can do with the nucleus of an atom. Either we split an atom into two (or more) other atoms, which is nuclear fission, or we can fuse together (join) two atoms to form one large atom – a process called nuclear fusion. Both these processes release immense amounts of energy. 

Source: McKinsey

The nuclear power plants that we have today are all Nuclear Fission Reactors. The idea there is to have a controlled nuclear fission reaction to harness the energy that is released when we split the atoms of a fissile material like Uranium (U235), Plutonium, Thorium, etc. An uncontrolled fission reaction becomes the deadliest thing humanity has ever created – an atomic bomb. 

We haven’t been able to harness the process of Nuclear Fusion, yet. And that’s what this story is all about. 

However, an application of Nuclear Fusion can be found in a Hydrogen Bomb, which is several times deadlier than some atomic bombs and has thankfully never been used. But actually, it is a combination of Fission and Fusion and not just Fusion alone.

Coming back to how Fusion can be cheap, clean, and thus become the definitive future of our energy needs.

Abundant and Cheap Fuel in Nuclear Fusion?

Unlike Fission reactors that depend on rare and costly fuels such as U-235, Fusion can be done with abundant and cheap materials such as Deuterium and Helium3. Deuterium is an isotope of Hydrogen that retails at $13/g. It is so abundant that 1 out of every 6000 Hydrogen atoms in the ocean is Deuterium. 

Tritium (a hydrogen atom with 2 neutrons) is another contender for being one of the Nuclear Fusion fuels and while it is not as common and cheap as deuterium, it is still not a bottleneck in realizing fusion’s promises.

Why Fusion doesn’t leave harmful residual waste or GHG emissions?

What about Chernobyl and Fukushima – the tragic incidents at Nuclear Fission Power Plants that shook the world? Or the fact that Nuclear Fission plants around the world are being shut citing security concerns even after the technology became feasible decades ago?

There is no denying any of the above concerns, but again, fission is not fusion. Nuclear Fission plants produce radioactive waste which has to be carefully discarded. Even after all the safety measures, they still run the risk of a meltdown, that is, going out of control or mismanagement of radioactive substances.

On the other hand, a fusion reactor is not based on a chain reaction principle and thus is inherently safe. The by-products in the proposed fusion approaches are pretty much harmless to the environment, such as particles with very short half-lives or inert gases like Helium. This Helium can be stored and then used for a wide variety of applications, including making humans sound funnier 😛

Given that fusion doesn’t use or produce fissile material, the risk of nuclear proliferation is also reduced

Why electricity produced with Fusion would be cheaper?

A Nuclear Fusion reactor has a high energy density, meaning it is extremely energy efficient in terms of fuel. The operational cost of running a Nuclear Fusion Reactor is insignificant as the fuel is cheap and the footprint of the power plant is smaller.

All the energy a person will ever need in their life will require as much fuel as can be contained in a glass of water. 1 kg of fusion fuel can produce as much energy as 10 Million kg of coal!

Fusion is, in fact, the most common reaction in the world. Where does the Sun get the energy to shine? Well, it’s safe to say that it is the largest fusion reactor in our solar system. 

All the stars get their energy by fusion. A fusion reaction produces 200 million times more energy than an ordinary chemical reaction per unit of reaction mass, and hence the universe has been powered by fusion for billions of years.

How does Fusion happen and what limits it from feasibility?

‘Well all of the above is great, why don’t we then replace all power plants with fusion already?’, if that’s what you are thinking, I’d like to say two things to you. 

One, bravo, you care about the planet and support science; two, the science of fusion is not good enough to support you, yet. Fusion is years or probably decades away from becoming commercially viable. To understand why, we need to understand how fusion happens. 

When two nuclei come closer, they repel each other as both are positively charged. We need to somehow bring them so close together that the electromagnetic force that repels them is taken over by the strong nuclear force that enables them to fuse together. Once that happens, a new nucleus is formed releasing high amounts of energy. 

So how do we bring two nuclei so close that they fuse? We make conditions where two nuclei hit each other at super-high speeds. So fast that before the electromagnetic repulsion halts them, they are already too close to fuse.

How do we create those conditions? Super-heated plasma.

Plasma, often called the fourth state of matter is like a soup of positively charged ions and negatively charged electrons. If we heat the plasma, more and more electrons leave the atom, eventually leaving just the positively charged nuclei which are made up of protons and neutrons. 

Additionally, because of the high temperature, these nuclei are flying around at extremely high speeds. It is worth noting that all stars are made up of plasma. Yes, so now we know that extremely high-temperature plasma is a pre-condition to fusion.

How high does the temperature of the plasma need to be? At least a 100 Million Degrees. 

If you’re wondering degrees Celsius or Fahrenheit, a nuclear scientist turned CEO, Bob Mummgard has something to say to you, “100 million degrees, Celsius or Fahrenheit? Doesn’t matter, 100 million – very large number.” 

Although, it’s Celsius. 

Now the problem becomes twofold. First, how do we create a plasma that is this hot and that too for sustained periods of time? And secondly, even if we did create it, how do we hold or contain that plasma? No material ever known to humankind can last at those temperatures. 

There are different approaches, or architectures as they are called, that scientists and entrepreneurs are taking to create and confine the superheated plasma. Simply put, it involves extremely powerful lasers, superconductors, magnets, and decades of research. 

The next challenge that erupts is that of gain – gaining more energy out than you put in. Scientifically said, the next goal is to achieve Q>1, where Q means the ratio of Energy Out/ Energy In. You see, theoretically, fusion as a power source is possible. But for the past 80 years, trying to do fusion has been more like using a blow torch to ignite a match stick. 

And that’s where the human endeavor to harness fusion is at. We need to not just start fusion at our will, at the scale we want, but it should give out more capturable energy than we put in to achieve it in the first place. 

There is now immense effort and money flowing into the space to solve just this.

Startups in the Nuclear Fusion Space

As of 2015, there were hardly a dozen private companies pursuing fusion. Today, there are roughly between 50 to 100 companies in the fusion space depending on how you classify. The Fusion Industry Association report for 2023 tracked 43 such companies.

Fusion companies around the world have raised a total of $6B of private capital to date. This is in addition to another several billion dollars spent on governmentally funded projects such as NIF and ITER. A whopping $4B of this $6B has come in the last two years. Fusion really has become a hot space. 

Commonwealth Fusion Systems

The highlight of this funding frenzy was the $1.8B round that a company called Commonwealth Fusion Systems (CFS) raised in December’21. The round was led by Tiger Global with Google and Temasek also joining. It also featured a stellar list of investors – Bill Gates, legendary VC John Doerr, the man who broke the Bank of England Gorge Soros, and Vinod Khosla of Khosla Ventures, to name a few. 

After this fundraise, CFS became the most capitalized company in the space with a total of $2.1B raised to date. Adding to the fact that CFS was spun out of MIT’s Plasma Science and Fusion Center where CEO Bob Mummgard spent a decade earlier. After his post-doc, he started the company in 2018. 

Given all this and their breakthroughs in developing super strong magnets (>20 Tesla), CFS is eyeing to achieve what no one has yet achieved, the next feat in the race to commercial fusion, Q>1, which means more energy out than in. 

But on the 5th of December 2022, the National Ignition Facility (NIF) in California did a miraculous thing on this front. They extracted a little more energy than what went in. But before you get excited, it is important to note that while NIF’s announcement is worth getting hyped about, practical fusion is still a long way off. What NIF did is scientifically significant but not commercially. 

Commonwealth Fusion Systems is gearing up to achieve the same feat at a commercially significant scale with their SPARC program, that too, as early as 2025. Fingers crossed. 

Helion Energy

Another notable funding round in the space came when Sam Altman, the Founder and ex-CEO of ChatGPT’s parent company OpenAI, personally invested a whopping $375M in the fusion startup – Helion Energy. Helion raised a total of $500M in that Series E round with a commitment to an additional $1.7B tied to Helion achieving key milestones. That makes Helion another company to have in principle raised more than $2B.

Other key Investors were Facebook’s lesser-known co-founder Dustin Moskowitz’s family office, Peter Thiel’s Mithril Capital, and notable sustainable tech investor Capricorn Investment Group.

Helion’s approach to fusion is among the more unconventional ones. If built, Helion’s Nuclear Fusion Power Plant will be a simpler machine as compared to what others are building. Especially the energy capture part which bypasses the steam power plant setup. 

As the CEO David Kirtley targets, this could enable Helion to someday sell electricity at an abysmally low cost of 1 cent per kWh. This is less than Rs 1 per unit, which is almost 1/10th of current rates! (pun intended).

In total, 7 startups have raised more than $250M dollars each from investors who have patient capital to deploy in this ‘hero or zero’ industry. 

Nuclear Fusion Startups and Investors

Investors in Nuclear Fusion Companies

As there are not a lot many startups in the space, the same is the case with investors. A deep understanding of the technology coupled with patience to sit through the development phase are prerequisites for being an investor in the fusion space.

Bill Gates clearly seems to have entered a phase of his life where he wants to tackle the world’s biggest problems – eradicating polio, fighting pandemics, and avoiding a climate disaster. In fact, fusion is just one of the weapons that he believes can be used to fight the climate problem. Bill has investments in almost all types of green tech assets. He also is ‘a co-founder’ of another nuclear company, albeit in Nuclear Fission. TerraPower is building modular and safe fission reactors and is majorly funded by Gates himself and his Climate Fund Breakthrough Energy Ventures. 

Vinod Khosla, the founder of Sun-microsystems who later turned VC is another legendary investor who is very optimistic about Fusion. In fact, at Khosla Ventures, Vinod has a very simple principle to back startups – ‘90% chance of failure? no problem,10% chance of changing the world? I’m in.’ No wonder he was also an early investor in OpenAI.

In 1996, Vinod Khosla invested $2.8M in a company called Juniper Networks, in 1999 when Juniper went public, Vinod’s then firm, Kleiner Perkins cashed out $7.1B – a 2500x return. It is believed to be the most successful Venture deal

“John, venture capital, that’s not a real job. It’s like being a real estate agent.”, Intel’s President Andy Grove told John Doerr in 1980 when he was thinking of making a move from Intel to the VC firm Kleiner Perkins. How did that turn out?  Well, some of the deals this ‘real estate agent’ did were early rounds of Google, Amazon, Netscape, and Sun Microsystems, to name a few. 

Another interesting trivia, it was Doerr who introduced the OKR (Objectives and Key Results) framework at Google, which then spread and became a standard practice at companies around the world. Where did John learn the OKR framework? From the same guy who didn’t want him to join VC – Andy Grove – father of OKR. Doerr also has a framework to fight climate change, he calls it the Speed&Scale Plan. 

Institutional investors in the space include Sovereign money like Temasek, GIC, and the Kuwait Investment Authority. Google with its ‘other bets’ arm does not want to lose its edge of being at the cusp of cutting-edge technologies while companies in the traditional power sector like Chevron and Koch don’t want to miss the bus. 

And then there are climate-focused funds with a long enough ‘fund cycle’. One such fund that fits this description is Breakthrough Energy Ventures. Interestingly, it is worth having a look at the board of BEV, which looks more like a list of the world’s richest people.

The next class of capital providers to fusion research are governments, and it is not just for the sake of ‘science’.

Fusion and Geopolitics

The Department of Energy in the US government currently pumps in over a billion dollars every year to fund fusion research and development, including grants to private for-profit players. Most Fusion companies stem from and are based in the United States, and the White House knows the value of public-private partnerships in the space. 

The National Ignition Facility (NIF) is at the forefront of the US Government’s own initiative to make commercially viable fusion possible. Thus, the government pumps in hundreds of millions to the program, more so than before, since the NIF took the lead in the race with the previously discussed December 5th miracle. 

“I’ve been called into the White House multiple times to try to make sure the US’s lead in fusion science doesn’t turn into something like what happened with solar panels – US science but mostly made in China.” Andrew Holland, chief executive of the Fusion Industries Association (FIA) said in an interview. 

Nuclear Fusion Startups around the world

China and Nuclear Fusion

China, on the other hand, has two main fusion enterprises driving scientific advances and investment: the government-funded research based at the Institute of Plasma Physics at the Hefei Institute of Physical Science, and the privately-funded fusion research of ENN Group.

With the Hefei Institute, China has made serious progress. Also called as ‘artificial sun’, the Experimental Advanced Superconducting Tokamak’s (EAST) progress is a testimony to that. China is also convinced enough to pump capital to the tune of multi-billions of dollars in the fusion endeavor. 

While the secretive Chinese company with a $400M arsenal, ENN, is privately owned and run, the intersection between big business and government in China is a porous membrane, and both tend to serve just one interest – the Chinese interest. 

Other countries such as the United Kingdom, Germany, Australia, and Israel do have players operating in the space with governments taking an active interest. 

Fusion of Nations for Fusion of Atoms

But fortunately, all fusion research isn’t happening in nationalistic silos. The International Thermonuclear Experimental Reactor – ITER is the biggest Nuclear fusion experiment that is being run by governments. Yes, governments – the plural form. 35 Countries form the ITER Members – China, the European Union, India, Japan, Korea, Russia and the United States. The joint effort facility is based in France and aims to attempt the extraction of net energy from a fusion process at a commercial scale.

Clearly, governments across the globe understand that it’s not just a race against each other but also a challenge for the entire human race. After all, what we are trying to build is a ‘sun in a bottle.’

Surely, once viable, each country is going to chase after securing cheap and virtually unlimited power for themselves, and then fusion could really become a tool for geopolitics, if it hasn’t already become one. 


Nuclear Fusion can be the ultimate solution to humanity’s ever-increasing thrust for energy. But if that sounds too good to be true, it is because for the past 80-odd years it has remained that way. 

There is a common joke about fusion. ‘For the past 80 years, Fusion has always remained 20 years away, never 19.’

But this time it seems different. There have never been so many sharp minds working on the problem as there are today. There has never been so much investment in the space – both private and public, as there is today. There have never been such combined efforts to make it work as there are today. 

And most importantly, as the Russian physicist Lev Artsimovich said in the 1960s, “Fusion will be ready when society needs it.”, and there has never been more need for fusion to work than there is today. 

So maybe, just maybe, this time around, Fusion looks 19 years away, and not 20!

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