Why Are Technology Companies Racing To Fund Nuclear Fusion?

After decades of work behind the scenes, projects related to nuclear fusion technology have become the focus of world leaders and a magnet for their investments. The remarkable breakthrough achieved by American scientists in late 2022, when they were able for the first time to generate nuclear fusion energy using laser technology, marked a pivotal turning point for this technology and pushed many of its doubters to reconsider its future prospects.

Since then, the appetite of investors, governments, and technology giants has grown to bet on this technology as a virtually unlimited, cheap, and low emission source of energy. These actors are keen to seize the initiative in what they see as a strategic opportunity to redraw the balance of power in global energy markets.

A report by the Washington Post, reviewed by Sky News Arabia Economy, stated that there are currently more than forty three nuclear fusion projects under development around the world, with total investments exceeding eight billion dollars. The striking point is that most of these investments have come from the private sector over the past four years.

However, despite this momentum, turning nuclear fusion technology into an actual source of electricity remains a difficult and complex task. Moving this technology from laboratories to power stations still requires a series of engineering innovations in areas such as ultra durable materials, cooling systems, and the management of high energy neutrons. For this reason, even the most optimistic companies in this field say that commercial nuclear fusion will not reach the electrical grid before the end of the decade, and may initially be expensive and unstable.

This means that the success of nuclear fusion technology in reaching the grid depends heavily on reducing production costs and on the ability of current infrastructure to adapt to this type of energy.

What Is Nuclear Fusion Energy

In December 2022, a historic breakthrough in nuclear fusion was achieved in the United States, when the Department of Energy announced that scientists at Lawrence Livermore National Laboratory in California had succeeded for the first time in achieving a net energy gain from a nuclear fusion reaction. In other words, the amount of energy released from fusion was greater than the energy used to trigger it with lasers, producing energy similar to that generated by the sun.

Although the fusion event lasted for less than one second, this result was considered the most important goal in fusion research for decades. It proved that nuclear fusion is indeed possible and opened the door to the long held dream of producing clean, limitless energy that does not generate carbon emissions.

What Are The Challenges

Despite recent achievements, nuclear fusion still faces major technical challenges, foremost among them maintaining the reaction itself. The fusion reaction that was achieved in 2022 lasted for less than one second, while sustaining such a reaction for a long period requires temperatures exceeding one hundred million degrees Celsius and materials capable of withstanding extremely harsh conditions that have not yet been fully developed.

Containing this reaction and turning it into stable and reasonably priced electricity requires complex engineering innovations in areas such as cooling systems, neutron management, and energy infrastructure.

Who Is Leading In This Technology

The United States is currently the strongest player in the field of nuclear fusion thanks to the progress made by its national laboratories. However, the race is not limited to America alone.

China is considered the biggest competitor. It is investing large sums of public money in ambitious projects to build what is believed will be one of the most powerful fusion reactors in the world, even larger than American facilities.

This race reflects real fears of repeating the scenario seen with earlier clean energy technologies such as solar panels, where the United States developed the technology but China dominated the market.

In addition to the two major powers, countries such as Germany, Japan, Britain, and France are also seeking to develop commercial fusion reactors in order to secure an early position in one of the most promising future industries.

A New Bet For America

Officials in American states have already begun planning for the day when fusion energy becomes a reality. While the administration of President Donald Trump reduced support for wind and solar projects, United States Energy Secretary Chris Wright announced at a conference in Washington this month that nuclear fusion has reached a turning point after which developments will accelerate. He noted that this technology will produce energy regardless of weather or time of day. Fusion is also supported by one of his predecessors, Ernest Moniz, a nuclear physicist who was previously skeptical about the possibility of commercialising it.

Greg Piefer, chief executive of Shine Technologies, a fusion company in Wisconsin, believes that no fusion company will be able to sell electricity profitably before it reaches what is known as the scientific break even point. This is the point at which the fusion reaction generates more energy than is required to ignite it. He points out that the only place in the United States where this has happened is the government facility in Livermore, which uses a laser pulse that releases in a fraction of a billionth of a second an amount of energy that exceeds by about two thousand five hundred times all the power generated by the American electrical grid. 

Scientific Doubts About The Promises

On the other hand, a number of experts doubt that nuclear fusion energy will appear on the power grid before 2050. Physicist John Holdren, a professor at Harvard University and former science adviser to the White House, believes that achieving this goal is still far away. He notes that scientists needed seven decades just to accomplish one successful fusion reaction, while turning this progress into a sustainable energy source will require extremely complex engineering leaps.

Victor Gilinsky, a former member of the United States Nuclear Regulatory Commission, warns that companies in this field are greatly downplaying the scale of the unresolved technical challenges.

Michel Claessens, former communications director of the international ITER project, adds that some companies are misleading the public by offering unrealistic promises that suggest nuclear fusion power is only a few steps away, when in fact the road remains long and arduous. 

Why Are Companies Funding A Technology That Is Not Yet Mature

Oxford certified artificial intelligence consultant Hilda Maalouf tells Sky News Arabia Economy that the first reason pushing major technology companies to invest billions in nuclear fusion is their recognition that this field represents the real long term bet in the energy sector. These companies think on a time scale that exceeds a decade or two. They know that whoever owns the technology capable of producing virtually unlimited energy at low cost will enjoy economic and industrial dominance for decades to come. She stresses that nuclear fusion is not an innovation that appears every ten years but perhaps once in a century. Therefore, the race is not about immediate returns, but about who will build the infrastructure for the energy of tomorrow.

Maalouf considers that big technology companies view nuclear fusion as a tool to secure their position in the new clean energy based economy. Investing in this technology is a form of strategic hedging similar to their entry into the space sector or semiconductors. Instead of relying solely on current energy sources, these companies are seeking to diversify their portfolios and secure an early foothold in a sector expected to trigger a market boom in the coming decades. She adds that we should not overlook the fact that investing in a technology like nuclear fusion gives companies indirect political and regulatory influence. 

Opportunity And Influence

Maalouf explains that when Microsoft, Alphabet, or Amazon invest in a project to generate energy through nuclear fusion, they are not only buying the oil of the future. They are also placing themselves at the decision making table where the political and economic future of energy is shaped. This type of influence, though not financial at first glance, later translates into access to privileged government contracts and into an enhanced public image and market value.

She stresses that technology companies see nuclear fusion as part of an integrated system that includes running artificial intelligence and massive data centers that require enormous amounts of energy. This is another reason driving them to enter this field with full force as a way of strategically securing their future expansion.

Unlimited Return

Maalouf explains that entering nuclear fusion technology from an investment standpoint is a calculated risk, but the potential return from the success of this technology is almost unlimited. We are talking about a global energy market valued in trillions of dollars annually. If one of these companies succeeds in reaching a workable form of nuclear fusion, it could become the main supplier of energy for dozens of countries and perhaps capture a very large share of the global energy market for decades. This is not a random gamble but a strategic bet on long term dominance.

Maalouf believes that what distinguishes nuclear fusion is that it does not aim merely to improve the current energy system, but to surpass it entirely and build a new model that is not based on fossil fuels or even on the familiar architecture of renewable energy. Whoever leads in developing nuclear fusion will not only sell electricity, but will also set new global energy standards and lead the supply chains, infrastructure, and regulatory systems associated with it. This is precisely what major technology companies are seeking: to be at the next center of gravity of the world economy.