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Getting a commercial reactor online by the 2030s doesn’t sound as crazy as it used to.
There’s a reason they call a seemingly impossible technological reach a “moonshot.” Over the years, the term has been used to refer to virtual reality, self-driving cars, and biometric identification such as DNA fingerprinting. Now, it’s fusion’s turn.
“Where we are on fusion is kind of where we were on getting to the moon when Kennedy gave his speech,” Phil Larochelle, a founding partner at Breakthrough Energy Ventures who leads its fusion investment strategy, told me, referencing John F. Kennedy’s 1962 speech about putting a man on the moon by 1970. “Did they have any idea how they were going to make a guidance computer that was actually going to get on the moon? No. Did they have the rockets that they needed that were strong enough to get to the moon? No. And so it’s kind of like that in fusion.”
There have already been some high-profile milestones over the past few years. Toward the end of 2022, the National Ignition Facility at Lawrence Livermore National Lab beat breakeven, creating a fusion reaction that produced more energy than it took to heat up the fusion plasma. Or when the startup Commonwealth Fusion Systems, a.k.a. CFS, announced that it had developed a new type of extremely powerful magnet to better contain and control superheated plasma. Now, startups and investors think the next decade will be critical for commercialization.
“When we started BEV, we kind of assumed that fusion was going to be too far off,” said Larochelle. But after talking with CFS and learning more about the company’s magnet tech, minds changed. Breakthrough invested in the company — and eventually three other fusion startups, too. “These better magnets matter a lot,” Larochelle told me. “It matters as much as the transistor did to a computer. It’s that level of component level breakthrough that totally changes the game.”
For the ordinary optimist, fusion energy might invoke a cheerful Jetsons-style future of flying cars and interplanetary colonization. For the cynic, it’s a world-changing moment that’s perpetually 30 years away. But investors, nuclear engineers, and physicists see it as a technology edging ever closer to commercialization and a bipartisan pathway towards both energy security and decarbonization.
To some extent at least, the data backs them up. According to the Fusion Industry Association, over 60% of all private fusion companies were founded in 2019 or later. And in the past three years alone, fusion companies have brought in over $5.1 billion, over 70% of the sector’s total funding since 1992.
“We would hope to see a breakeven moment by private companies in the next two to three years, by 2028-ish,” followed by a commercial reactor in the mid-2030s, Julien Barber, an investor at Emerson Collective, told me. Thus far, Emerson, which is headed by Laurene Powell Jobs, has invested in two fusion companies, CFS and Xcimer Energy.
The major players in the startup ecosystem say they’re on track to get there. “The progress has actually been faster than Moore’s law,” Ally Yost, senior vice president of corporate development at CFS, told me, “but people weren't looking at that.”
Moore’s law is a prediction — largely validated for decades — that the number of transistors on a microchip, and thus a computer’s processing speed, would generally double every two years. The performance of fusion reactors, especially the donut-shaped tokamak reactors that CFS uses, has historically improved at an even faster rate. But due to some midcentury researchers and technology enthusiasts overpromising on the near-term feasibility of fusion, cynicism remains. It also doesn’t help that the large, intergovernmental fusion megaproject known as ITER has consistently faced delays and huge cost overruns due to the technical complexity of the project, as well as the difficulty of wrangling 35 countries to work together.
Thus far, though, the private sector is faring better. CFS has raised over $2 billion, more than any other private company in the space. It uses an approach known as magnetic confinement fusion, which involves using strong magnets to confine fusion fuel in the form of a plasma. If you can keep the plasma dense enough and hot enough for long enough, atoms start fusing together, releasing a vast amount of energy in the process. ITER, as well as startups including Type One Energy, Thea Energy, and Renaissance Fusion are pursuing the same fundamental route, though with their own technical twists.
Lawrence Livermore, on the other hand, achieved its breakthrough fusion reaction (which it’s since repeated several times) using an approach known as inertial confinement, in which powerful lasers fire at a pellet of fusion fuel, causing rapid compression and heating that leads to nuclear fusion. But the national lab is not aiming to create a commercial reactor. So when the founders of the startup Xcimer Energy saw that the National Ignition Facility was closing in on its goal, they jumped to get inertial confinement tech ready for market.
“In August of 2021, NIF achieved a fusion gain of about 0.6,” Xcimer’s President and CTO, Alexander Valys, told me, referring to the ratio of the energy generated by the fusion reaction to the energy required to heat the fusion plasma. An energy gain of one constitutes breakeven, so the moment didn’t get any mainstream press to speak of. “But inside the field, everyone knew that the previous NIF shot record was effectively a gain of like 0.01,” Valys said. The massive jump indicated to him that, “If we’re going to do this, we have to do it now.” Since then Xcimer has gotten backing from the biggest names in the space, including BEV, Lowercarbon Capital, and Emerson Collective, as it looks to build lasers at lower cost and higher power.
One thing that ties fusion’s various technical approaches together is the fact that they’ve all benefited tremendously from advances in supercomputing, which allows researchers to better model plasma physics and rapidly simulate fusion experiments. “It’s really taken the advent of modern computational methods and supercomputers to be able to model that process with sufficient accuracy, that you can actually develop a machine that recreates those conditions,” Christofer Mowry, CEO of the magnetic confinement startup Type One Energy, told me.
At this point, many leading companies say that the problem is no longer about basic science, but cost. Clea Kolster, head of science at Lowercarbon Capital, told me that once CFS turns on its demonstration reactor, the company knows its fusion gain will be “at least greater than two.” (Lowercarbon is a CFS investor.) That said, there’s still loads of uncertainty around the reactor’s performance, as outside studies project that its energy gain will be more like 11 — although even that might not be enough for it to make economic sense.
So while the economics of fusion are a large part of what venture capitalists are betting on these days, private investment in the industry has actually fallen over the past two years, after peaking in 2022 at $2.8 billion. “A step change in growth will be required once private companies deliver results on their prototype machines,” Andrew Holland, CEO of the Fusion Industry Association, said in a statement, adding that last year’s $900 million in funding “will not be enough to deliver fusion’s ambitious goals.”
To date, government funding has comprised a mere 6% of the industry’s total, but contra the private funding trend, that figure has been ticking up as of late. Last year, the Department of Energy announced $46 million in funding for eight private fusion companies to help the administration reach its goal of demonstrating fusion at pilot scale within a decade.
All the companies I spoke with were awardees, and all agreed that much more would be needed, pointing to the public-private partnership between NASA and SpaceX as a model for how the government could more deeply support commercialization of fusion. That partnership was the product of NASA’s Commercial Orbital Transportation Services program, designed to catalyze the development of private spacecraft and funded to the tune of $800 million.
China, meanwhile, is outspending the U.S. on fusion, just as it’s done with solar, and launched a national fusion consortium at the beginning of this year.
“We are about to harness the sun a second time, and we can’t make that mistake again. We have to get serious about building this industry here in the United States,” Clay Dumas, a partner at Lowercarbon Capital, told me. The firm has a dedicated $250 million fusion fund, and has invested in a total of eight companies in the space, spanning a wide array of technical approaches. “That is going to take the combined efforts of investors and entrepreneurs and policymakers and energy companies and governments to make sure that we can drive this forward on the timeframe that it needs to happen.”
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Whichever way you cut it, this has been an absolute banner year for nuclear deals in the U.S. It doesn’t much matter the metric — the amount of venture funding flowing to nuclear startups, the number of announcements regarding planned reactor restarts and upgrades, gigawatts of new construction added to the pipeline — it’s basically all peaking. Stock prices are up across all major publicly traded nuclear companies this year, in some cases by over 100%.
“This year is by far the biggest year in terms of nuclear deals that has occurred, probably, since the 70s,” Adam Stein, the director of nuclear innovation at The Breakthrough Institute, told me. “It’s spanning the gamut from bringing a 40-year-old reactor back to things that have not even been proven scientifically yet.”
To name just a few announcements from this year: planning for a 4.4-gigawatt nuclear power complex is now underway in Texas; South Carolina’s state-owned utility is seeking buyers to restart construction on two partially built AP1000 reactors; New York governor Kathy Hochul is looking to build a new reactor in upstate New York; The Tennessee Valley Authority submitted a construction permit for a small modular reactor; Google signed a power purchase agreement with Commonwealth Fusion Systems; and another fusion company, Helion Energy, raised a whopping $425 million round of venture capital. On top of all that there’s the Palisades nuclear power plant in Michigan, which is targeted to restart by year’s end, bringing 800 megawatts of new nuclear power online.
Heading into the second Trump term, there were plenty of indications that the administration would support this technology with increasingly bipartisan appeal. So it wasn’t exactly a surprise that while the One Big Beautiful Bill eviscerated tax credits for solar and wind, it preserved them for both existing and new nuclear facilities. Now that this support is assured, Stein expects the nuclear announcements to keep rolling in. “We might have seen more deals earlier this year if there wasn’t uncertainty about what was going to happen with tax credits. But now that that’s resolved, I expect to hear more later this year,” he told me.
How much of this is, I asked him, is due to data centers and their seemingly insatiable demand for clean, firm power? “Most of it,” he said simply. By way of example, he pointed out how data center load growth has changed the outlooks for two small modular reactor companies in particular. “NuScale has been trying to find their first project for a long time now, after they had to cancel their [Utah Associated Municipal Power Systems] project. Kairos didn’t have a clear buyer for its first-of-a-kind, even though it was building two test reactors,” Stein explained. “Then all of a sudden, they all had additional deals in the works because of data center demand.”
Last year, Kairos inked a 500-megawatt deal with Google to meet the hyperscaler’s growing data center needs, while this year, Texas A&M selected the company — along with three others — to build a reactor at the university’s research and development campus. And while NuScale infamously canceled its first project in 2023 due to rising costs, this year it received approval from the Nuclear Regulatory Commission for a new and improved reactor design. Now the company’s CEO, John Hopkins, told Reuters that NuScale is in talks to deploy its tech with five unnamed “tier one hyperscalers.” Its stock is up more than 150% on the year.
That’s a big turnaround for a company that, less than two years ago, was widely considered a cautionary tale — and it’s not the only one in the industry with this type of comeback story. Right before NuScale’s project failed, another nuclear company, X-energy, announced that it would no longer go public due to “challenging market conditions” and “peer company trading performance.” But while X-energy still has yet to IPO, it appears to be doing just fine. In February, the company announced the close of a $700 million Series C follow-on round, coming on the heels of Amazon’s strategic investment last year.
“I think every company has their stories about how things are changing,” Seth Grae, CEO of the advanced nuclear fuel company Lightbridge, told me. Things have moved a lot faster, Grae said, since Trump released a series of executive orders aimed at accelerating nuclear energy deployment. “Just since May, we’ve received this highly enriched uranium [from the Department of Energy], made these fuel samples, got them qualified already at Idaho National Lab. We expect they’ll be in the reactor this year. Grae told me. “Things didn’t used to happen that fast in nuclear.”
Trump’s plans to fast track nuclear development have also raised serious concerns, however, as critics worry that acceleration could lead to laxer safety standards The executive orders call for, among other things, cutting staff at the Nuclear Regulatory Commission, just as the industry enters a period of intense activity. In June, the President fired one of the agency’s commissioners, Christopher Hanson, without cause. Another commissioner, Annie Caputo, resigned in July.
But right now, the nuclear industry is mostly basking in optimism. Grae credits the government’s strong support for the surge in nuclear stocks — Lightbridge’s own stock price has jumped 180% this year, while another nuclear fuel company, Centrus Energy, is up even more. The small modular reactor company Oklo is up 285% for the year, on the heels of last year’s 12-gigawatt non-binding deal with the data center company Switch — one of the largest corporate clean power agreements to date.
Last year’s slew of deals involving Oklo, X-energy, and Kairos show that the sector’s momentum had been building well before Trump took office. By 2023, the writing was already on the wall in terms of data center load growth, as grid planners began to predict a sharp rise in electricity demand after over a decade of stagnation. But when I asked Erik Funkhauser of the Good Energy Collective whether the prior two years compared with this one, he concurred with Stein. “Nope,” he told me. “We’re seeing capital infusion at a really, really high pace, as high of a pace as the company’s suppliers can keep up with on projects”
Still, the party may not go on forever. “I see a potential for a Valley of Death,” Stein told me, similar to what many startups go through when they’re trying to raise later-stage funding rounds.
“If things don’t start to actually move forward with real progress, either getting licenses or building prototypes on time, then all of that investment will be pulled back.” That’s what the U.S. saw during the last so-called “nuclear renaissance” in the late 2000s, he explained, when a rash of large reactors were proposed with only two actually reaching completion.
These were the notorious Vogtle reactors 3 and 4 in Georgia, which finally came online in 2023 and 2024 respectively, running billions over budget and years behind schedule. In order for this latest round of nuclear enthusiasm to avoid the same fate, Stein told me it’s critical that leading projects demonstrate enough early success to maintain developer confidence in the economic and technical viability of new — and old — nuclear technologies
That being said, the sector will inevitably contract. “Back when we saw this last scale-up, there were three designs that were really competing for attention, and now there are 75. So we’re going to see a lot of failures,” Stein said. The question for venture investors, he told me, is “how many failures of startups that you didn’t invest in are you willing to tolerate before you start to think the whole segment has trouble?”
The second main way this could all fall to pieces, he told me, is if “somebody tries to move too fast,” and that recklessness leads to “either a bankruptcy or an accident or something like that that will send ripples or shock waves through the whole sector.”
Indeed, a metaphorical or literal meltdown in the sector could put a quick halt to this year’s frenzied momentum. But within the next few years, as these announced projects begin to line up their licenses and come online — or fall apart— we’ll soon see whether this latest nuclear revival is a true turning point or just another bubble.
On the Senate’s climate whip, green cement deals, and a U.S. uranium revival.
Current conditions: Flash flooding strikes the Southeastern U.S. • Monsoon rains unleash landslides in southern China • A heat dome is bringing temperatures of up to 107 degrees Fahrenheit to France, Italy, and the Balkans.
An August 5 chart showing last month's record electricity demand peaks.EIA
The United States’ demand for electricity broke records twice last month. Air conditioners cranking on hot days, combined with surging demand from data centers, pushed the peak in the Lower 48 states to a high of 758,053 megawatts on July 28, between 6 p.m. and 7 p.m. EST, data from the U.S. Energy Information Administration’s Hourly Electric Grid Monitor shows. The following day, peak demand set another record, hitting 759,180 megawatts. That’s nearly 2% above the previous record set on July 15, 2024.
The EIA predicted demand to grow by more than 2% per year between 2025 and 2026. Forecasts are even higher in areas with large data centers and factories underway, such as Texas and northern Virginia. The milestone comes as the Trump administration cracks down on solar and wind energy, two of the fastest-growing and quicker-to-build sources of new generation. On Tuesday, The New York Times reported that the Environmental Protection Agency is moving to eliminate $7 billion in spending on grants for solar energy, though when Heatmap’s Emily Pontecorvo asked the agency, it said only that, “With the passage of the One Big Beautiful Bill, EPA is working to ensure Congressional intent is fully implemented in accordance with the law.”
Senator Brian Schatz, a Democrat from Hawaii, locked down enough votes on Tuesday to replace Illinois Senator Dick Durbin as the Democrats’ whip in the chamber. Durbin, who is retiring next year, has served in the Senate Democrats’ No. 2 position since 2005. In his endorsement on Tuesday, Senate Minority Leader Chuck Schumer of New York called Schatz “a close friend and one of my most valued allies.”
Schatz crusaded for the Inflation Reduction Act and told Heatmap he supported last year’s failed bipartisan permitting reform deal, even as progressive greens campaigned against its giveaways to fossil fuels. In a Shift Key podcast interview with my colleague Robinson Meyer and his co-host, Princeton professor Jesse Jenkins, in February, Schatz pitched a big tent for climate action. “We all have to hang together. It’s the American Clean Power Association. It’s the energy company that does both clean and fossil energy. It’s the transmission and distribution companies. It’s the manufacturers. It’s labor. It’s Wall Street. It’s K Street. Everyone has to hang together and say, not only is this good for business, but there’s something that is foundationally worse for business than any individual policy decision.”
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The Trump administration may be clawing back funding for cleaning up heavy industry, but Big Tech is still inking deals. On Monday, Amazon agreed to buy low-carbon cement from the startup Brimstone. Then on Tuesday, the data center developer STACK Infrastructure announced the completion of “a pilot pour” of green cement from rival startup Sublime. The moves highlight the growing demand for cleaner industrial materials amid increased scrutiny of the energy and pollution linked to server farms.
America’s uranium enrichment went out of business in the early 2000s after the Clinton-era megatons-to-megawatts program essentially ceded the industry to cheap Russian imports made from disassembled atomic weapons. Since banning imports from Russia last year, the U.S. has been ramping up funding for nuclear fuel again, especially as the industry looks to build new types of reactors that rely on fuel other than the low-enriched uranium that virtually all the country’s operating 94 commercial reactors use. On Monday, the Department of Energy announced its first pilot project for advanced nuclear fuels, giving the startup Standard Nuclear the first federal deal. On Tuesday, the agency signed a $1.5 billion deal to restore the so-called Atomic City on the 100-acre parcel of federal land at the former Paducah Gaseous Diffusion Plan in Kentucky.
The Trump administration gave permission to the National Weather Service to hire up to 450 meteorologists, hydrologists, and radar technicians after sweeping cuts from the Department of Government Efficiency, CNN’s Andrew Freedman reported. The agency, which was partly blamed for its warnings going unheeded ahead of the deadly Texas floods last month, also received an exemption from the federal hiring freeze.
The move came the same day as a federal judge blocked the administration from diverting billions of dollars in Federal Emergency Management Agency funding for disaster resilience and flood mitigation. The injunction warned FEMA against spending the money on anything else.
Beyond Meat is finally getting beyond meat. The company plans to shed the flesh reference in its name this week as it launches its new Beyond Ground product that promises more protein than ground beef. “With this launch,” Fast Company’s Clint Rainey reported, “Beyond Meat is becoming merely Beyond and turning its focus away from only mimicking animal proteins to letting plant-based proteins speak for themselves. The radical move is cultural, agricultural, and financial.”
Rob and Jesse talk through the proposed overturning of the EPA’s “endangerment finding” on greenhouse gases with Harvard Law School’s Jody Freeman.
The Trump administration has formally declared that carbon dioxide and other greenhouse gases are not dangerous pollutants. If the president gets his way, then the Environmental Protection Agency may soon surrender any ability to regulate heat-trapping pollution from cars and trucks, power plants, and factories — in ways that a future Democratic president potentially could not reverse.
On this week’s episode of Shift Key, we discuss whether Trump’s EPA gambit will work, the arguments that the administration is using, and what it could mean for the future of U.S. climate and energy policy. We’re joined by Jody Freeman, the Archibald Cox Professor of Law at Harvard and the director of Harvard’s environmental and energy law program. She was an architect of the Obama administration’s landmark deal with automakers to accept carbon dioxide regulations.
Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
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Here is an excerpt from our conversation:
Robinson Meyer: I just want to make a related question, which is, you can actually say some of the sentences in the DOE report — you can believe tornadoes don’t show any influence from climate change and still believe heatwaves do, and still believe extreme rainfall events do. In fact, you could believe the cost of heat waves getting worse could justify the entire regulatory edifice.
Jody Freeman: What I love about you, Rob, right now, is you’re kind of incensed about little points that might individually sort of be right, maybe each one separately, but none of it adds up to even a chink in the armor. Right? And what’ll have to happen is the scientific community writ large, en masse, is going to have to come back and say, even if one or two or three of these sentences could possibly, plausibly be actually accurate, it does nothing to change the overwhelming —
Jesse Jenkins: It doesn’t matter.
Freeman: Right. What I think is happening is we’re all getting poked and distracted and tweaked into outrage over science, when in fact, the first argument they’re making is the one where they could actually attract some judges and justices to say, Oh wait, maybe you have a little more discretion here to set a threshold level. You know, Maybe it matters that you’re saying nothing we do here in the U.S. will make a difference in the end to global warming, and maybe that is a reason you don’t want to regulate. Hmm, maybe we’ll accept that reason. And that’s what we need, I think, to be more concerned about.
Jenkins: You’re saying, don’t get distracted by the fight over the climate science. That fight is very clear. It’s this legal argument that this isn’t an air pollutant because it’s not a local air pollutant, it mixes globally with all the other CO2, and we can’t, you know, each class of cars is a tiny contributor to that, and so we shouldn’t worry about it —
Freeman: And much of this is a replay, or a rehash of arguments that the George W. Bush administration lost in Massachusetts vs. EPA. So a lot of this is like, let’s take another run at the Supreme Court.
Mentioned:
The EPA Says Carbon Pollution Isn’t Dangerous. What Comes Next?
The EPA on its reconsideration of the endangerment finding
Jody’s story on the change: Trump’s EPA proposes to end the U.S. fight against climate change
Jesse’s upshift (and accompanying video); Rob’s sort of upshift.
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.