Big tech, governments pour billions into nuclear fusion development

The global race to commercialise nuclear fusion is gathering pace as governments and private investors pour billions of dollars into the technology, driven by soaring electricity demand from artificial intelligence (AI) and the broader electrification of the global economy.

According to the International Energy Agency (IEA), the fusion energy sector could be worth more than $350 billion (€307 billion) by 2050, reflecting growing expectations that the technology could provide a virtually limitless source of carbon-free electricity, DW writes.

Unlike conventional nuclear fission, which generates energy by splitting atoms, nuclear fusion produces power by fusing light atomic nuclei together, releasing heat that can be converted into electricity. The process produces no greenhouse gas emissions during operation, generates no long-lived radioactive waste and carries a significantly lower risk of major accidents.

While large government-backed projects such as the International Thermonuclear Experimental Reactor (ITER) in southern France continue to face delays and rising costs, private investment in fusion technology has accelerated rapidly.

According to a report by the European Union's Fusion for Energy (F4E) agency, around 77 companies worldwide are now working to commercialise nuclear fusion. More than half are based in the United States, while China and the United Kingdom also host growing numbers of fusion startups. Germany is home to four companies in the sector: Focused Energy, Marvel Fusion, Proxima Fusion and Gauss Fusion.

Private investment in fusion research reached nearly €13 billion by the end of 2025, excluding public funding, with investments increasing by 30% since June 2025, according to the F4E report. More than half of the funding has gone to U.S. companies, while about one-third has been invested in Chinese firms.

The report notes that the remaining funding—just over €700 million—has been directed to European companies, with Germany's Marvel Fusion and Focused Energy receiving the largest investments.

The rapid growth of the sector has also raised concerns in Europe that the United States and China could dominate another strategic technology, as they have in fields such as artificial intelligence, semiconductors and electric vehicles.

In the United States, major technology companies have become key investors in fusion startups. Google has invested heavily in TAE Technologies and Commonwealth Fusion Systems, while Microsoft has signed an agreement to purchase electricity from Helion Energy. OpenAI Chief Executive Sam Altman is also among Helion's backers.

Despite the funding gap, Markus Roth, professor at Germany's Technical University of Darmstadt and co-founder of Focused Energy, believes Germany remains well positioned.

"Even though other countries are currently investing significantly more, we have a stronger ecosystem to build on," Roth said.

Focused Energy is developing a laser-based fusion approach that gained momentum after researchers at the U.S. National Ignition Facility achieved the first successful fusion ignition in 2022, producing more energy from a fusion reaction than the laser energy delivered to the target.

The company recently received an additional €60 million in funding from German energy company RWE, which also plans to host a prototype fusion power plant at the site of its former nuclear facility in Biblis.

Roth said one of the industry's biggest challenges remains building manufacturing capacity for highly specialised laser systems.

"In Germany, we need to learn to build laser systems the way we build cars, on an assembly line but with high precision," he said.

Germany has identified nuclear fusion as one of six strategic technologies under its High-Tech Agenda and has pledged more than €2 billion in public funding during the current legislative term.

Focused Energy aims to complete a prototype commercial reactor by 2037, with the first commercial fusion power plant expected in the early 2040s.

By Sabina Mammadli