"Artificial Sun" queues for listing, last year fusion startup financing reached a record high

As the nuclear fusion industry gradually approaches commercial reality, related startups are accelerating their transition from the laboratory to the capital market, with leading companies speeding up their SPAC listings.

According to data from PitchBook cited by the Financial Times, venture capital firms participated in 43 rounds of financing in the nuclear fusion sector last year, setting a historical record; the total investment reached $2.3 billion, the highest level since 2021. Investors are pouring into this field, hoping that this promising technology will ultimately prove economically viable in providing cheap, abundant, and carbon-free energy.

Although most of the funding still comes from private markets, leading companies have begun seeking public listings to support billion-dollar projects.

General Fusion announced last month that it will go public through a merger with a SPAC, with a valuation of approximately $1 billion, and is expected to complete the transaction by mid-2026, becoming the first publicly listed pure nuclear fusion company. Additionally, TAE Technologies has also indicated plans to seek a public listing through an all-stock merger with Trump Media & Technology Group, with a valuation of $6 billion.

Capital Influx and Listing Frenzy

Nuclear fusion technology aims to replicate the reactions that produce energy in the sun by forcing atomic nuclei to combine under extreme temperatures or pressures to generate energy. Unlike fission, which produces nuclear waste, fusion is seen as the "holy grail" of clean energy. Although no private nuclear fusion company has yet achieved commercially viable fusion—proving that the electricity generated exceeds the electricity consumed—this has not deterred capital flow.

Market data shows that investor interest in the industry has extended to retail investors. Kristi Marvin, founder and CEO of data provider SPACInsider, stated that retail investors "love anything futuristic." She noted that although the commercialization prospects of these companies are still very distant, retail investors are undeterred.

The structure of General Fusion's public listing transaction also reflects the market's optimistic sentiment. As part of the SPAC transaction, PIPE funding from institutional investors is priced not only above the offering price but also values the company at the $1 billion level, marking a shift in the industry from mere concept validation to a deeper stage of capital operations.

Industry Differentiation and Construction Cycle

With the influx of funds, the financing dynamics within the nuclear fusion industry are beginning to show differentiation.

Currently, the most financed nuclear fusion company—Commonwealth Fusion Systems (CFS)—has raised approximately $3 billion. The company's Senior Vice President Ally Yost pointed out that the industry is undergoing a transformation: while new entrants are increasing their rounds of financing, the amounts per round are smaller; meanwhile, mature leading companies are entering a phase of "higher capital intensity." This shift stems from companies moving from the PPT conceptual stage to the expensive physical machine construction phase. Most frontrunners are developing demonstration devices, which are scaled-down versions of future power plants, aimed at proving the feasibility of the technology.

According to Yost, CFS is building pre-commercialization devices and plans to construct its first commercial power plant in the early 2030s in the United States. Another well-funded company, Helion Energy, has set a more aggressive goal of achieving its first electricity sales by the end of 2028. General Fusion is also currently testing its pre-commercialization device.

Different Betting Strategies and Market Skepticism

Faced with enormous funding needs, each company's strategy varies.

General Fusion CEO Greg Twinney stated that while the company faces financing challenges in 2025, it has adopted a more cautious approach than its competitors. Instead of making "billion-dollar bets" on a single machine, the company chooses to test individual components on a smaller scale. Twinney believes this approach can achieve similar milestones with "one order of magnitude less capital."

However, there remains significant skepticism in the market regarding such high valuations. As nuclear fusion is still an unproven technology and the road to commercial application is long, some financial professionals have issued warnings.

Ted Brandt, founder and CEO of clean energy investment bank Marathon Capital, pointed out that these unproven technologies are years away from generating cash flow yet have received "crazy valuations." He questioned the rationale behind this phenomenon, stating that it essentially means the market "is funding the next SpaceX."

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