The Department of Energy’s research and development arm will invest $135 million into removing the “toughest technical barriers” for fusion reaching commercial scale, ARPA-E director Conner Prochaska said today.
It marks the agency’s largest investment in fusion power to date after entering the industry in 2014. Since then, the number of fusion companies in the U.S. has grown from 12 to more than 50, ARPA-E said; many of those were originally seeded with ARPA-E funding.
“The question is no longer whether fusion is possible. The question is how fast we get fusion-generated power on the grid, and whether America leads that achievement,” Prochaska said in prepared remarks at the ARPA-E Energy Innovation Summit in San Diego. The statement is a nod to China, which is also heavily investing in fusion energy technologies.
Fusion in the U.S. is still in the early stages of development, however. No company has publicly announced that it’s created a reaction that generates more energy than it consumes. That feat, known as “net-gain” or “ignition,” is key to commercializing fusion — as is converting the energy produced into usable electricity. The last major breakthrough was four years ago, when a Lawrence Livermore National Laboratory effort managed to break even for the first time.
But the possibility of harnessing the nuclear reactions that powers the sun to create clean, nearly limitless energy has nonetheless attracted billions of dollars of private investment, especially in recent years as hyperscalers race to find baseload power for their artificial intelligence data centers.
Microsoft in 2023 signed a deal with Helion Energy to buy electricity from its first fusion power plant, which is currently under construction in Washington state and expected to come online by 2028. Commonwealth Fusion Systems is aiming to build its first commercial power plant in Virginia in partnership with Dominion Energy, and also has a PPA with Eni. In December, the parent media company of President Donald Trump’s social media network Truth Social made the bizarre move of acquiring TAE Technologies; in March the company said it’s scouting out sites to start building a utility-scale, 50-megawatt fusion power plant.
Bringing down the costs of building a commercial-scale fusion plant appears to be the main goal of the new ARPA-E funding. The agency outlined four focus areas, including: more efficient and lower-cost plasma heating and driver systems; fuels that boost power output and simplify the fusion fuel cycle; smaller pulsed power and power conversion systems; and novel power plant designs and components.
The funding will be awarded via “multiple, competitive funding opportunities,” Prochaska told Latitude Media. The result will be a portfolio of programs, each targeting specific technical barriers to fusion that “are often risky or pre-competitive for any single company to tackle alone,” he added.
In comparison with the massive sums that the private sector is putting forward, ARPA-E’s $135 million is small. But Prochaska said that it fills a gap in the market.
“Private capital scales what it can already see; ARPA-E funds what the market can’t yet price or predict,” Prochaska said, adding that private investment is often locked behind technical milestones. “Venture capital funds companies to build a product, not to solve the fundamental science challenges needed to reach those milestones.”
The funding reflects an evolution in how the federal government is approaching moonshot energy technologies, as well as offers a window into how the Trump administration plans to use ARPA-E.
A year ago, there was uncertainty over the future of the agency, largely because Trump in his first term proposed zeroing out its funding entirely. In his fiscal year 2027 budget request, released Friday, he called for a 43% cut, to $200 million. However, the budget also requests $10 million for a new Office of Fusion within DOE.
Joel Fetter, managing director of Clark Street Associates’ programs in advanced energy, critical minerals, and industrial technologies, told Latitude Media that ARPA-E’s latest fusion investment is significant. “It’s really the first big-money investment to move [fusion] to the next stage of commercialization,” he said, adding the caveat that $135 million isn’t enough to advance fusion technologies to commercial viability. That will take “significantly more” rounds of capital — both public and private — as well as a clearer strategy from the Trump administration and Congress.
“The long-term vision still needs to be fleshed out,” Fetter said. “At DOE, that means a home for fusion that can drive this space forward on a sustained basis, with the appropriations and the resources that signals the government is going to be a sustained partner.”
