‘It’ll take more’: CFS nets another $1B to chase nuclear fusion dream

Almost every station on the factory floor of Commonwealth Fusion Systems’ northeast Massachusetts headquarters was bustling on a steamy Friday morning in June. Hard-hatted workers ferried along the components for the company’s first fusion reactor, including giant slabs of magnets that will eventually be joined together in a doughnut-shaped reactor called a tokamak. Construction crews were expanding the facility to make more space for the company, which is racing to be the first private enterprise to prove that nuclear fusion can be a viable source of energy.

And SPARC, the demonstration-scale version of CFS’s larger-scale reactor prototype, was starting to look complete. CFS hasn’t yet claimed to have produced more energy from a fusion reaction than it put in, a milestone that has long eluded public and private fusion efforts. Nevertheless, it says SPARC is on track to start up next year, and the company is confident it will work as planned.

Investors are once again betting big that CFS’s aggressive vision will pan out. On Thursday, the company announced its latest fundraising round — an eye-popping $1 billion. It has now raised a total of $4 billion since it was spun out of the Massachusetts Institute of Technology in 2018.

“This is the scale of capital that’s really needed to do fusion seriously,” CEO Bob Mumgaard told reporters on a call this week.

“We would all hope that you could do it really, really cheap. I’d love to do fusion at $10 million in my garage. If that was doable, and the laws of nature allowed that to happen, that would be fantastic. We would have lucked out as a species,” he added. ​“However, we’re just not in that universe.”

CFS is charging harder after the holy grail of nuclear fusion than any other U.S. firm. The startup has already filed paperwork to patch into the nation’s largest electrical grid. Yet thus far only one entity — a U.S. national laboratory — has managed to generate net energy from a fusion reaction. The experiment, which used lasers instead of the tokamak-based design pursued by CFS and others, has been repeated 11 times.

Investors are betting that CFS can both hit that historic net-energy milestone and make the economics work for power production. It’s a tall task, but a tantalizing one: If the promise of nuclear fusion is realized, it could produce large amounts of carbon-free electricity with fuel that’s more abundant than uranium, and without generating most of the long-lived radioactive waste that comes from the fission reactions that underpin today’s nuclear power plants.

CFS, which raised an $863 million Series B2 funding round last year, officially named Lorence Kim, a former Goldman Sachs banker who served as finance chief at the pharmaceutical giant Moderna during the race to develop the Covid-19 vaccine, as its new chief financial officer.

The company declined to say what percentage of the latest funding came from new versus existing investors, though Kim noted that the ​“substantial majority” came from new investors including undisclosed ​“pension funds, sovereign wealth funds, and infrastructure and industrial corporate partners.”

The fact that it brought in a broader base of investors, according to the consultancy BloombergNEF, ​“is very, very significant.” 

“It’s a growing recognition that this is going to be something that’s materially significant in the next decade,” said Chris Gadomski, BloombergNEF’s lead nuclear analyst.

A global race

The first artificial fusion reaction took place in a laboratory in 1934. But as the decades went on, the experimental reactions couldn’t overcome a consistent hurdle: Fusion reactions consumed more energy than they produced.

Still, governments have poured tens of billions into the task of containing and controlling fusion, which involves combining atoms rather than splitting them, as in fission.

The tokamak emerged as the leading fusion reactor design. The machines take the shape of a torus, which looks like a circular ring from the outside and has no edges or vertices; their surfaces are continuously curved to ensure that the plasma needed for a fusion reaction cannot escape.

Since the 1960s, more than 150 tokamaks have been built around the world in government labs. Not one has demonstrated a net energy gain. In 2013, construction started on ITER, a giant version of the machine that’s located in France and backed by China, the European Union, India, Japan, Russia, South Korea, and the U.S. The slow-moving project has dragged on for years, but the consortium set a deadline for itself for completion in the mid- to late 2030s.

Then, in August 2021, U.S. government scientists in California reached a ​“Wright Brothers moment.” Using a laser-based fusion approach, rather than the magnetically driven tokamak, the Lawrence Livermore National Laboratory managed to generate a surge of energy equal to about 70% of the power it took to charge up and fire the super laser that had ignited the reaction.

That same year, CFS netted its biggest investment to date: $1.8 billion.

One year later, that same national lab made history by finally achieving net energy gain.

The experiment demonstrated, at last, that fusion had real potential. By pursuing commercial fusion with tokamaks — the most-studied technology for fusion, if not the one that has proved a net energy gain — CFS believes it can bring fusion to market faster, despite the advantages competing approaches may have on paper.

CFS aims to build a grid-connected power plant by 2030, and in April it became the first fusion company to file the paperwork for a grid interconnection agreement. SPARC, its test reactor, is now about 80% complete, per Mumgaard, and should come together in early to mid-2027 — by which point he expects to be able to demonstrate net energy gain.

The new capital will go toward commercialization efforts around the larger-scale reactor, the company says, but more will be needed.

“Fusion takes machines. It takes capital. It takes building things,” Mumgaard said. ​“We should be realistic about that. That’s why a billion dollars is an important signal. It’ll take more.”

Increasingly, the race to figure out nuclear fusion is looking like a competition between the U.S. and China.

Asked to compare the latest funding round with China’s investments, Mumgaard pointed to the bipartisan report the Senate published last fall, which estimated that Beijing is spending between $6.5 billion and $13 billion on commercializing fusion since the U.S. national lab breakthrough in 2021. Mumgaard served as an expert briefer on the report.

While the U.S. leads the world in private funding for fusion — 30% of which has gone to CFS alone at this point — Congress allocated just $790 million to the Department of Energy’s Fusion Energy Sciences program in 2024, and most of the spending is already accounted for; $240 million was directed toward the American share of ITER.

China is spending ​“significantly more capital than we’ve deployed as a company, and it’s many times more capital than the private companies have deployed outside of us, and it’s many times more capital than the public program has deployed in the United States,” Mumgaard said.

“There’s, of course, questions of efficiency and where that capital goes, but it gives you a sense of what’s at stake here when you have a government weighing in like China at that level,” he added.

CFS, he said, has long supported the establishment of a public-private partnership with the federal government that could seed the fusion industry with a one-time investment in the range of $10 billion, a figure highlighted in the Senate report. That’s about half of what the DOE just offered via a loan program meant to support the establishment of a supply chain for manufacturing the components of Westinghouse’s AP1000, America’s flagship large-scale fission reactor.

“That is really needed to put fusion into the fast track,” Mumgaard said.