The U.S. government has long had an on-again, off-again relationship with the fusion power sector. As of last week, it’s definitely back on. Helion and Commonwealth Fusion Systems (CFS) received awards totaling $260 million from the Department of Commerce under the CHIPS and Science Act, the 2022 law that funds domestic semiconductor development, to develop advanced semiconductors used to help power and control their reactors.
Helion landed $175 million, while CFS reeled in $85 million. But as with many recent government awards, these come with strings attached. Helion and CFS have agreed to give the government non-voting shares in return.
With these awards, the fusion industry is finally getting the government’s attention, though maybe not the sort it envisioned. In the past, government support for a startup meant non-dilutive capital, meaning money that doesn’t shrink existing investors’ ownership percentages, while giving the company a bigger war chest. Investors loved the deals because it meant their startups got more money without them having to pony up.
The government doled out the cash to boost American innovation, though it also meant that, in most cases, the government didn’t directly benefit when it picked a winner. The Trump administration has been pushing to change that calculus. For both companies, the total dollar amount pales in comparison to how much each has raised.
CFS has raised about $4 billion, while Helion is close behind with $3.2 billion in committed capital. The awards are perhaps more important as signals that, after years of cutting and then trickling out fusion funding, the U.S. government is back in the game. Fusion. which generates power by fusing atoms together as the sun does, is an expensive endeavor, requiring exotic materials, sophisticated computer modeling, and complex manufacturing.
Progress over the last decade has attracted private investors who have bet more than $14 billion that one or more companies will be able to put a power plant on the grid. Yet according to the Fusion Industry Association, the sector’s trade group, that’s still not enough to beat other countries in the race. Last year, the trade group called on the federal government to inject a one-time infusion of $10 billion into the sector, with $5.4 billion intended for fusion startups.
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