The Fusion Energy Report polished its crystal ball this week and offered a list of ten possible, and perhaps plausible, developments for the fusion energy industry. Like all such prognostications, your mileage may vary in terms of how they turn out.Â
While there are both major questions and minor quibbles about these predictions, all of them have essential cores of truth even if some have more expansive visions of early success for fusion firms than may be justified by current conditions.
The key challenge for all fusion development efforts is that none of the 53 firms pursuing fusion energy in the U.S. have been able to get more energy out of their prototype machines than they put into it on a sustained basis.
Like fission plants, the objective is to generate power on a reliable basis 24X7 for at least 60 years. The question is whether or how many of todayâs competitors will cross that finish line with a design that can be built for customers to operate at a profit?
âIâm from Missouriâ Skepticism
Here is a brief summary of the ten forecasts along with some âIâm from Missouri: skepticism. The predictions are highlighted in italics. The comments that follow can are in the âshow meâ class that asks for verification of claims.
The Fusion Reportâs predictions are an interesting read. However, we are all reminded that history is the future that hasnât happened yet. There may be surprises in store that will validate some of these views of the future or which will create new circumstances that change the trajectory of some firms or the entire fusion industry. It will take only one firm to crack the code of replicating on earth the power of a star in a bottle to send the others scrambling to catch up.
Government and Geopolitics â The US government is expected to act as a major player by allocating significant funding potentially following a $10 billion recommendation through a sovereign fund model that requires equity stakes and collects royalties on licensed national lab technology.
This prediction has a short shelf life due to the fact that most of the intellectual property being developed in the fusion world is privately held by the 53 firms racing to be the first to achieve net energy. Also, national laboratories license technologies developed in their facilites on a non-exclusive basis due to their use of federal government funds as the basis for their operations.
Collecting royalties from licensing intellectual property isnât the purpose of national laboratories. Their role is to take on the R&D risks that the private sector canât or wonât pursue. In the case of fusion, the national labs can and should partner with fusion firms to solve intractable technical issues, but the boundary on the âSâ curve of evolving technology maturity puts them on the lower half of the space. Commercial development and profits live at the top end.
While the Department of Energy has successfully rolled out cost sharing programs under its Advanced Reactor Demonstration Programs (ARDP), the initial set of program milestones for success were undone, in part, by the scarcity of HALEU fuel and by the fact that deploying new fission reactor designs always takes longer. Full stop.
The U.S. does not have a sovereign wealth fund like Norway or Saudi Arabia with money to spare based on global crude oil sales. Funding the double digit billions needed to produce commercial plants will require hard headed thinking by Congress and cost-shared public / private partnerships. Fusion firms are unlikely to put sharing equity with Uncle Sam as a priority ahead of raising new capital from private sector investors. The government, with its strict procurement rules, isnât known for its skills in deal making or setting and meeting performance milestones.
Chinaâs Acceleration: China is predicted to âtriple downâ on fusion, using its ability to dictate resource allocation and bypass Western regulatory hurdles to compete for strategic dominance.
There is little doubt that China is in a leading role globally when it comes to fusion developments due to the command and control nature of its economy and investment decision making for energy technologies. In a range of 1 to 10 in terms of being correct, it scores a â10â on both counts.â A quibble here is that China doesnât care about western regulatory hurdles since it hasnât positioned, as yet, any of its fusion power projects for export.
Regulatory & Federal Support: New leadership and executive orders are expected to drive programs that allow for early fusion machine testing on federal properties to accelerate time-to-market.
Part of this prediction is interesting as it would mimic the Department of Energyâs plans to test small modular reactors and microreactors (fission not fusion) at national laboratories and military installations. However, testing fusion devices at federal facilities doesnât change the need for NRC licensing.
The NRC is developing a regulatory program for fusion energy that is distinctly different than for fission. Two years ago the agency kicked off the process with three alternatives for regulating fusion plants.Â
The âAdvance Actâ signed into law in 2024 supports the agencyâs decision to use more-relaxed licensing requirements for near-term fusion systems compared to fission systems. It isnât clear why an additional executive order on this policy issue would be needed when the agency has already responded to the congressional mandate.
The Fusion Industry Association (FIA) has asked the federal government for $10 billion in new funding to support fusion energy. Given the waves of private investment that have already come through for the fusion industry, more than $9 billion, Congress may wonder why the FIA has its hand out for more on behalf of its members?
Market Dynamics and Investment: Public Markets & SPACs: Following TAEâs lead, up to five fusion companies may go public in 2026 using SPACs and other vehicles to generate the capital required for high talent and development costs.
SPACs have had a mixed result so far in the fission world, and in the case of NuScale, led to it being vulnerable to short sellers seeking fast profits. X-Energy had a short-lived SPAC which it closed after watching the damage this investment vehicle did to NuScaleâs prospects. Oklo is the only developer of an advanced reactor so far that has succeeded by going public. Despite having no revenue, its stock has soared based on investor interest in its potential future success.
TAEâs lash up with TMTG may push other leading fusion firms to consider going public sooner than they planned due to investment scenarios that donât include giving up equity at this stage to raise funds for future development.
Increased Private Investment: Total private investment is expected to ramp with tech giants and hyperscalers increasing their stakes as progress becomes more evident.Â
Commonwealth, Helion, and TAE have formed strategic partnerships respectively with Google, Microsoft, and TMTG. This prediction is supported by actions from the big Internet platforms that have already taken place.
Google focusing on CFS. CFS expects to begin operations of its SPARC prototype in 2026, which will prove the high-temperature superconducting magnets needed for commercial-scale plants.
Executing the worldâs first fusion Power Purchase Agreement (PPA). Helion broke ground on its Orion plant in 2025 and claims it will begin delivering carbon-free energy to Microsoft by 2028.
A $6 billion merger with TAE and TMTG is specifically linked fusion to âAI supremacyâ and digital sovereignty. The combined company plans to begin siting a 50 MWe utility-scale power plant by the end of 2026. TMTGâs cash commitment to invest in fusion, $300 million, depends on the shifting fortunes of the crypto currency world.
Corporate M&A: Major industrial players like GE Vernova, Hitachi, Siemens, and Schneider are expected to move from minority investments to full acquisitions to build out their fusion product portfolios.
Itâs unclear whether these supply chain firms, which are part of the supply chains for fusion and fission firms, would buy any of the 53 fusion firms. More likely, they would, as big fish, swallow smaller fish with specialized product lines to bulk up their technical capabilities.
A better take is the next prediction which says well-funded companies (those with over $1 billion, such as CFS, TAE, and Helion) will likely acquire smaller supply chain players to achieve vertical integration. They may also buy out some of the smaller fusion fish that have interesting technologies but which lack the financial horsepower to move them ahead.
Consolidation & Integration: The industry will likely see a wave of mergers and acquisitions among companies with similar designs to aggregate talent and scale resources.
This prediction is 100% right. With 53 firms competing just in the U.S. for fusion market share, and just three of them having raised more than $1 billion, that leaves quite a few out in the cold. Tech Crunch just this week published a list of ten more firms that have raised more than $100 million. As a result, this leaves the 40 other firms scrambling to get beyond their initial rounds of investment. Take this prediction together with the previous one on âCorporate M&Aâ for both of them being on target.
Pivot to Derivatives: Many fusion companies may find more success as âcomponent playersâ rather than âplatform players,â pivoting to sell derivative products like specialized magnets, vessels, and power systems.
Having some revenue is better than none at all. On the other hand, these moves will put companies that develop side hustles to keep the wolf from the door in a position in which they may find themselves butting heads with firm in their own supply chains.
Power Purchase Agreements (PPAs): By the end of 2026, major tech giants are expected to sign PPAs to pre-buy fusion power as a core baseload strategy for new data center campuses in regions like the Pacific Northwest or Northern Virginia.
Yes, reserving a seat at the table to get ahead of late comers to the industry makes sense, but no one ever earned cash from a non-binding MOU. The conventional wisdom is that fusion energy plants will achieve commercial development milestones in the mid-to-late 2030s. The UK Atomic Energy Agency (UKAEA) has a more conservative perspective targeting 2040 for the first commercial fusion plant. It could be a while before the MOUs become final investment decisions.
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