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Home COUNTRY DACH

What Europe needs to win the nuclear fusion race

Siftedby Sifted
March 17, 2025
Reading Time: 4 mins read
in DACH, GREEN, UK&IRELAND
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“We need fusion,” Sam Altman told delegates at Davos last year. Given the vast amounts of electricity consumed by the data centres that power the AI revolution, one can understand the demand. Predicting that the “two currencies of the future” would be compute/intelligence and energy, the OpenAI chief executive added: “There’s no way we get there without a breakthrough. It motivates us to go invest more in fusion.”

Altman’s actions have certainly matched his words: he has personally sunk $375m into Helion Energy, a US nuclear fusion company that has already signed distant supply contracts with Microsoft. Bill Gates has also invested heavily in the sector, backing MIT spinout Commonwealth Fusion Systems, which has raised $2bn of private funding to date, by far the most in the industry. 

Investment in fusion, which is unlikely to produce energy on a commercial scale before the end of the 2030s, appears to have become the latest financial fashion among several other billionaires, including Jeff Bezos, Eric Schmidt and Peter Thiel. They’re enticed by the prospect of generating cheap, abundant, non-radioactive energy to the world and combating climate change.  “What better legacy is there than to believe you’re helping save humanity?” says one industry observer. 

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According to a report last month from industry intelligence platform FusionX, the nuclear fusion industry had attracted a total of $12bn of private sector funding by the end of 2024. Of the top 10 best-funded companies, 6 are based in the US, 2 in the UK (Tokamak Energy and First Light Fusion) and one apiece in Canada and Germany (Marvel Fusion). Is this yet another example of an industry that was largely pioneered in Europe being outmuscled by better capitalised US rivals?

“Is there a gravitational pull of available and mobilisable capital in America that is not available in Europe? Absolutely,” says Stuart Allen, chief executive of FusionX.

FusionX estimates that more than $60bn is needed over the next 15 years to develop a commercial fusion power plant. “Bridging the funding gap over the next decade or so is likely to require the type of state-backed, semi-rational ambition seen in previous generations around space travel and perhaps today with AI,” the report concluded. 

The US unquestionably boasts the most powerful money mobilisation machine. But Europe still holds some strong cards when it comes to nuclear fusion. France hosts ITER, the multinational nuclear fusion mega-project led by the EU, which has nurtured a whole supply chain of specialist manufacturers in Europe. National governments have also been supportive of the industry. 

Earlier this year, the British government pledged £410m of investment in the sector. The incoming German CDU-led coalition government has also promised further support for the industry. “We have agreed together that we would like to see the world’s first fusion machine in Germany,” said Friedrich Merz, the incoming chancellor.

However, Allen argues there may be a second-mover advantage in the industry, just as there was in the passenger jet market in the 1950s. “Being first is not winning,” he says. “As with any technology, the first of a kind fusion machines may be pretty shonky.”

Munich-based start-up Proxima Fusion is placing its hopes in second-mover advantage. Even if Commonwealth Fusion Systems builds the first prototype fusion plant in the US, Proxima believes it could leapfrog rivals by developing a superior type of stellarator fusion plant. It’s aiming to complete a stellarator model coil demonstration magnet in 2027, which, if successful, could lead to the construction of  a €1bn pilot plant in 2031.

“We are jumping a generation of superconductor technology,” says Francesco Sciortino, Proxima’s chief executive. “If we manage to make that magnet we will change the world.”

Rational investors may be rightly wary of committing too much capital to such unproven technology. But the industry is developing apace, partly thanks to AI-enabled modelling. There is little doubt that fortunes will one day be made by those with deep enough pockets and sufficient vision — and patience.

Read the orginal article: https://sifted.eu/articles/europe-win-nuclear-fusion-race/

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