Tech Billionaires Bet on Fusion as Holy Grail for Business

Source: By Jennifer Hiller, Wall Street Journal • Posted: Monday, April 24, 2023

Jeff Bezos and Bill Gates are among titans chasing almost Iimitless energy source

Billionaires, clockwise from lower left, Jeff Bezos, Bill Gates, Marc Benioff, Vinod Khosla and Peter Thiel. Photo Illustration By Emil Lendof/The Wall Street Journal; Photos: Getty Images

Sam Altman became a tech sensation this year as the CEO of OpenAI, the artificial-intelligence startup that seems pulled from science fiction.

But Mr. Altman, who has been among Silicon Valley’s most prominent investors for more than a decade, has placed one of the biggest bets of his career on a company that might be even more futuristic: a nuclear-fusion startup called Helion Energy Inc.

He is one of a number of tech founders and billionaires who hope to harness the process that powers the sun and stars to deliver almost limitless energy. Jeff Bezos, Peter Thiel, Bill Gates and Marc Benioff are among those betting that the decadeslong goal of building fusion reactors is now within years of being reality.

Mr. Benioff calls fusion a “tremendous dream.”

“It’s the holy grail. It’s the mythical unicorn,” said Mr. Benioff, the CEO of Salesforce Inc., who invested in the Massachusetts Institute of Technology spinout called Commonwealth Fusion Systems, which aims to create compact power plants. Mr. Gates is also an investor.

Fusion has long been seen as a clean-energy alternative to sources that burn fossil fuels and release greenhouse gases. Other technologies and applications being developed in the race for fusion power include powerful magnets, better lasers or radiation therapy for cancer research.

Fusion, Mr. Benioff added, “has no limits if you can get it to work.”

Developers mostly in the U.S., Canada and Europe have been riding a wave of momentum since August 2021, when scientists at Lawrence Livermore National Laboratory came close to achieving more energy in a fusion reaction than was put in with lasers, a goal known as net gain.

Commonwealth Fusion Systems does testing related to commercial fusion energy. Photo: Tony Luong for The Wall Street Journal

Many grew to believe that a breakthrough was imminent. It came in December when the national lab achieved net gain for the first time.

Nuclear fusion occurs when two light atomic nuclei merge to form a single heavier one. That process releases huge amounts of energy, no carbon emissions and limited radioactivity, but companies would have to sustain fusion reactions and engineer a way to turn that energy into net power.

The old saw about fusion is that it is a mirage years away and always will be. It is a long-shot bet even with the high-risk world of venture funding.

Mr. Benioff said he was persuaded by Vinod Khosla, the Sun Microsystems co-founder who was an early investor in private fusion, historically the province of academia and national labs.

Mr. Khosla’s interest hinged on the ability to build a large high-temperature superconducting electromagnet. He spent 15 months on due diligence and hired three teams to evaluate the design before investing.

He thinks that several fusion designs should be tested and is investing in another firm, Realta Fusion, a spinout from the University of Wisconsin-Madison. “Even if one of them can work, the planet is much better off is how I look at it,” he said.

As an investor, Mr. Khosla sees fusion this way: “Financially either you lose one times your money or you can make a thousand times your money,” Mr. Khosla said. “That’s the math of fusion.”

Vinod Khosla spent more than a year doing his own research before he invested in private fusion. Photo: Sarah Silbiger/Bloomberg News

Industrial firms, major oil companies and sovereign-wealth funds are backing efforts along with the Department of Defense, which is in search of a toaster-sized power system for satellite propulsion.

“There’s a reasonable probability at least one, maybe two companies will demonstrate fusion conditions in this decade,” said Ernest Moniz, who is the chief executive of the nonprofit research group Energy Futures Initiative and a former U.S. Energy Secretary.

Mr. Moniz, a physicist, said that improvements in large-scale machine learning have sped experiments and helped several companies achieve or approach the extreme temperatures and pressures needed for fusion reactions.

Firms and their backers see parallels with recent advances in artificial intelligence, which also requires colossal amounts of computing power to run models.

Mr. Altman, whose company OpenAI is behind the viral artificial-intelligence chatbot ChatGPT, has put $375 million into Helion.

Avalanche Energy aims to use commercially available equipment to do fusion testing. Photo: Avalanche Energy

Everett, Wash.-based Helion uses a technology called magneto-inertial fusion and aims to prove it can produce net electricity next year.

At Helion, Mr. Altman is more than a passive investor. “I send people for him to vet and interview,” said Helion Chief Executive David Kirtley.

Some Helion employees have started using ChatGPT to see how it can speed up engineering work, Mr. Kirtley said. Other investors, including Mr. Thiel’s Mithril Capital, have previously joined calls to help Helion negotiate with suppliers.

The Fusion Industry Association, based in Washington, D.C., has tracked more than $5 billion in private funding, with seven firms raising at least $200 million. Around 75% of fusion fundraising has happened since 2021, according to PitchBook.

A company called Lowercarbon Capital, founded by early Twitter and Uber venture investor Chris Sacca, launched a fusion fund last year with investors that include endowments, corporations and family offices.

Clay Dumas, a founding partner, said Lowercarbon Capital was persuaded that fusion was at a turning point because regardless of the design, firms were notching technical milestones.

“Growing access to computational power and breakthroughs in materials science were accelerating their progress faster than anyone expected,” Mr. Dumas said.

Scientists at Lawrence Livermore National Laboratory announced an advancement in fusion energy research late last year. Photo: Chip Somodevilla/Getty Images

Lowercarbon Capital’s investments include Avalanche Energy, which has closed a $40 million Series A round. Avalanche Energy CEO Robin Langtry said the company is focused on small systems it can build and test quickly with commercially available equipment, including an ultrahigh vacuum chamber purchased on eBay.

“We want to build the smallest fusion reactor in the world. Then we’re talking about a project that’s maybe tens of millions of dollars, not billions, and you could actually do it with a small team,” he said.

Air Force Maj. Ryan Weed, a plasma physicist and test pilot with the Pentagon’s Defense Innovation Unit, which contracted with the company, said that testing such an approach 20 years ago might have cost $50 million, but much of the work can now take place on a computer at minimal cost.

The DIU wants a nuclear power source that could provide electrical power out of a device the size of a toaster oven or microwave some time in the next five years, said Mr. Weed, who pointed to a need for small satellite propulsion systems in cislunar space, the area between Earth and the moon.

Achieving fusion is so difficult that firms are developing other products as they test machines. That intellectual property has value independent of fusion, said Adam Rodman, founder of the hedge fund Segra Capital Management LLC, which invested in Canadian company General Fusion. Mr. Bezos, founder of Amazon Inc., has also backed General Fusion.

Technologies will eventually need to show a path to profit and not just scientific breakthroughs.

“A lot of these are not businesses—they are tech developers,” said Barbara Burger, who is former president of Chevron Technology Ventures and holds several advisory and board positions. “Until you have revenue, you don’t have a business.”

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