Fusion industry attracts record US$4.5bn in race to commercial scale

A RECORD US$4.5bn in funding flooded into the global fusion industry this year, benefiting private and public firms alike.

Funding has more than doubled since 2021, and the sector now boasts 56 fusion companies and a workforce of more than 16,000 people, according to the annual Global Fusion Industry Report from the Fusion Industry Association (FIA).

All fusion companies have the goal of commercial viability by the 2030s but a new accelerator has been added to the race: energy demand from AI.

Andrew Holland, CEO of the FIA, said: “The need for a source of clean energy that can provide large amounts of power to drive the data centres fuelling the AI revolution has only grown.”

He added: “Fusion will be the solution. Its approach of turning abundant, energy dense fuel into power, without carbon emissions, make it the only source of energy that will be able to scale up to meet constantly growing demand.”

Private companies are projected to reach commercial-scale faster than public research firms due to an advantage of more funding avenues, the report says.

Fusion geography

The US still dominates the fusion sector, with 28 operating companies, five of which have raised more than US$1bn respectively.

But there is also an emerging fusion sector in Germany, where three companies, Proxima Fusion, Gauss Fusion and Marvel Fusion, have raised more than US$1bn collectively, and are leading the race in Europe.

China has also been pushing ahead with its fusion sector, with one new company added last year, taking its total up to four. Several other companies are believed to be in development in the region, though the FIA was unable to confirm this.

One strong fusion competitor in China is start-up Startorus Fusion. The company, founded in 2021, has accumulated more than US$138m in funding. Startorus is developing compact reactors that contain repetitive pulse operation and magnetic reconnection heating in tokamak systems.

Private companies to watch

Several companies have already declared the development of fusion plants by as early as 2026. This crop of companies include the US’s Commonwealth Fusion Systems, by far the most successful fusion firm to date, which has attracted US$3bn of funding alone and expects net fusion energy gain by 2027.

Another leader includes Type One Energy, based in Tennessee, US, which broke ground on its first pilot plant, called Infinity, this year, and is expected to send power to the grid by 2034.

The UK has also shown promise in the sector, both through its collaborations with other countries in fusion research, and in private development. A company that has attracted a lot of attention is Tokamak Energy based in Oxfordshire, which was selected as the technology partner for the UK government’s STEP Fusion programme.