Nvidia and Google Back Nuclear Fusion Start-Up

Commonwealth Fusion Systems is a nuclear fusion start-up based in Massachusetts. (Courtesy Commonwealth Fusion Systems)

Nvidia, Google, and billionaire investor Stanley Druckenmiller are all pouring money into a start-up aiming to commercialize nuclear fusion, a novel energy source that is starting to attract billions of dollars in capital.

Commonwealth Fusion Systems, a Massachusetts-based start-up, said it raised $863 million in its latest round of fund-raising from a swath of investors around the world, mostly in technology and finance. Commonwealth has now raised nearly $3 billion and is the best-capitalized fusion company in a field that includes dozens of other start-ups.

These companies are all chasing an elusive goal—to turn nuclear fusion, a far-out science experiment, into a steady source of carbon-free energy that can generate electricity for everything from homes to artificial-intelligence data centers. Other players in the industry include TAE Technologies and Helion Energy. Collectively, fusion companies have raised around $8 billion to date.

Commonwealth’s equity raise is one of the five largest fund-raising rounds in the history of climate technology, according to Charles Boakye, energy transition strategist at Jefferies.

“It’s a big number, and it’s impressive that it’s gone to fusion technology, which folks don’t think of being as advanced as other climate tech solutions,” he said. In general, climate tech companies have had trouble raising money in recent months, Boakye said.

The fact that Nvidia’s venture capital arm and Google are investing in fusion doesn’t surprise Boakye, given the increasing importance of energy for powering tech applications like artificial intelligence.

“I would have been surprised if they weren’t involved,” he said.

There aren’t direct ways to play fusion in public markets, and Commonwealth said it isn’t eyeing a near-term initial public offering.

Commonwealth also raised money from a consortium of Japanese companies and from Emerson Collective, the company founded by Laurene Powell Jobs.

“For the first time in history, we have a real opportunity to commercialize the long-held promise of fusion power,” Jobs said in a statement.

Fusion hasn’t been proven to be a commercially viable energy source. All of the world’s nuclear energy today is generated from fission, the process of splitting the nucleus of an atom. Fusion, by comparison, involves combining nuclei, similar to how the sun generates energy. In 2022, a federal lab in California was able to generate more energy from a fusion reaction than it took to start the reaction in 2022, but no company has replicated the feat yet. If successful, fusion reactions are expected to be safer than fission ones, which have long raised worries about meltdowns. They’re also more energy-dense, potentially generating four times as much energy as fission, according to the International Atomic Energy Agency.

Commonwealth, which emerged out of research at the Massachusetts Institute of Technology, projects that it can prove it’s got a viable technology by 2027. The company says this equity raise will allow it to complete and demonstrate successful fusion energy at a plant called SPARC in Massachusetts, and advance its first commercial plant in Virginia, which it expects to be operating by the early 2030s. Google has already agreed to buy power from that plant.

Write to Avi Salzman at avi.salzman@barrons.com