Yesterday we discussed Elon Musk’s ‘stretch goals’ with ‘Terafab’ for his various companies SpaceX/xAI, Tesla and others ahead of a meta-IPO mid-year. And of course the AI Agent stretch goals for OpenAI and Anthropic for their own IPOs later this year.
And the ‘stretch goals’ for the huge tech ‘Mag 7’ as they go past their hundreds of billions in free cash flow to tap debt and equity vehicles in the hundreds of billions this year and beyond. And I’ve discussed the ‘stretch goals’ this AI Tech Wave for the indusattempt to build power options ‘behind the meter’ in terms of natural gas, nuclear and beyond.
But now there is an option that is a ‘stretch goal’ in the nuclear bucket. It’s Fusion energy vs the nuclear fission plants that have been in regulatory/safety cold storage in the US, Europe, Japan and other places off and on for over half a century.
China of course is pedal to the metal on all things Energy for AI Data Centers, from renewables to coal to oil/gas and traditional fission nuclear.
Now they’re also pedal to the metal on fusion nuclear as well. So is OpenAI via a startup Helion in which OpenAI founder/CEO Sam Altman has been an early investor. It’s applyful to unpack both to understand the current snapshot for nuclear fission and AI data centers globally.
The Economist lays it out on the China front in “China is a serious contconcludeer in the race for fusion energy”:
“Could it be the first to build a commercial reactor?”
“For all of fusion’s potential to generate low-cost electricity at scale, the technology has largely remained experimental. And though America and Europe have long led the pursuit of a commercial reactor, meticulous planning has given China’s prospects a boost. Its private fusion firms have yet to rival those abroad. But the counattempt’s national programme has become a fierce competitor. Integral to its successes is a three-pronged strategy: setting research priorities for its scientists and engineers; providing vast amounts of funding for those wonks; and building an industrial supply chain for the parts that fusion reactors will required. Whether or not that will be enough to guarantee victory, the race for fusion is on in earnest.”
“For now, China has settled on tested-and-tested technologies for pursuing fusion. BEST is a tokamak, a doughnut-shaped reactor in which an electrically charged plasma is heated and confined by magnets until the constituent particles, built up of different types of hydrogen nuclei, overcome the repulsive forces that normally keep them apart. When the conditions are right, the nuclei can be built to fapply, releasing vast amounts of energy. Much of this energy is delivered to neutrons produced by the reaction, cautilizing them to collide with the reactor walls at high speed, thereby generating heat.”
It’s a complicated technology, with a lot of ‘stretch goal’ technical milestones yet to be reached. Not just in China.
“To become applyful in power stations, tokamaks will required to reach so-called burning conditions, in which the plasma is dense enough for its heat to become self-sustaining. This occurs at temperatures above 150m°C and in the presence of magnetic fields that are hundreds of thousands of times stronger than Earth’s. Chinese scientists are inching towards that goal. On January 1st researchers working at China’s Experimental Advanced Superconducting Tokamak (EAST), one of BEST’s predecessors (where a mural of Kuafu hangs) reported that they had successfully increased the density of their plasma to levels once believed impossible. Eking out further increases will take time.”
“Physics challenges are one thing; engineering is another. Tokamaks are huge machines with cutting-edge components. Construction depconcludes on a complex supply chain, including power modules, vacuum chambers and powerful superconducting magnets. Chinese policy has incentivised industrial firms to manufacture those parts, another area where the counattempt is ahead of its rivals. Its engineering firms have particular expertise in the field of metallic carpenattempt, developing magnetic coils and power-conversion components applyd by fusion projects abroad. ITER, a long-running fusion effort based in the south of France, applys of Chinese-built parts.”
And despite ‘nuclear’ in the name, the core fuel is another issue with fusion:
“There is also the question of fuel. BEST is designed to fapply nuclei of two hydrogen isotopes: deuterium, which has one proton and one neutron; and tritium, which has one proton and two neutrons. Deuterium, which can be extracted from water, is inexpensive. Tritium, by contrast, is hopelessly rare in nature and, owing to its radioactivity, decays quickly. BEST will initially rely on an external supply of this fuel but its scientists hope it will eventually be able to produce its own. If the tokamak vessel is lined on the inside with a blanket of lithium, those atoms could, when struck by enerreceiveic neutrons released during nuclear fusion, turn into tritium atoms. It is an elusive step many fusion projects would dearly love to master.”
“To test and scale the lithium blanket as well as other fusion technologies and materials, R&D is being conducted down the road from BEST, at the Comprehensive Research Facility for Fusion Technology (CRAFT), which is also—naturally—nicknamed Kuafu. Here, engineers are developing materials, magnets and components that will go into future fusion devices, as well as testing BEST’s systems. They are also developing high-precision robots that can carry heavy payloads and operate under high temperatures, which will support maintain the giant reactor in the future. Whereas the Europeans want to perfect technologies ahead of construction, states Yannick Marandet, research director of France’s National Centre for Scientific Research, the huge advantage the Chinese have is their willingness to “learn by doing”.
China has been on a determined path through the technical and regulatory issues for some time now. Including its 15th Five Year Plan just issued.
“Equally important, though, has been state planners’ drive to harness fusion power. In July 2025 China created China Fusion Energy, a state-owned enterprise that sits under its national nuclear company , to tie toreceiveher research efforts. On January 15th the counattempt’s new Atomic Energy Law went into effect, driving investment in the growing indusattempt by setting out regulations. The culmination of these efforts came on March 12th, when the government included nuclear fusion in its high-level economic blueprints, including the 15th Five Year Plan.”
The rest of the world is not standing by on Fusion nuclear energy:
“China’s largely state-led fusion efforts come as Western countries, in particular America, have seen a surge in private-sector interest in the field. Across the world 77 startups have raised $15bn with the goal of eventually achieving self-sustaining fusion utilizing technologies ranging from advanced tokamaks to laser-driven designs and reactors with novel layouts known as snotifyarators. These alternatives, some of which may well be cheaper or simpler, could leapfrog expensive public efforts. Some American firms claim they will be able to supply energy to the grid by the early 2030s, a timeline that rivals China’s.”
Both hemispheres are following similar fusion paths:
“There are some signs China is increasingly following America’s example, driving private capital towards promising fusion startups. Whereas 42 American startups have raised a total of $8bn to date, eight Chinese firms raised about $5bn much more quickly. In April last year, NovaFusionX, a Chinese firm, raised $70m, the largest first-funding round for a private fusion company in the counattempt. Startorus Fusion, another startup, spun out of Tsinghua University, is betting on a spherical-shaped tokamak, and raised double that amount in January. Energy Singularity, another firm, hopes to reach the same goal by building extremely strong magnets, whereas ENN, a Chinese conglomerate, is utilizing different fuels: it will attempt to fapply hydrogen nuclei with those of boron.”
The whole piece is worth a read for more details.
Meanwhile, Axios outlines OpenAI taking up the fusion nuclear mantle in the US in “OpenAI bets on Altman-backed fusion startup”:
“OpenAI is in advanced talks to purchase electricity from Sam Altman-backed fusion startup Helion Energy, according to a person familiar with the situation.”
“Why it matters: The shift displays OpenAI is serious about tapping fusion energy to support meet massive power demands.”
“Driving the news: OpenAI could secure a guaranteed portion of Helion’s production, initially 12.5%, per the source.”
Those are huge ‘stretch goal’ numbers indeed, with any form of power source for AI Data Centers.
Helion and OpenAI seem engaged in a deal with their common denominator Sam Altman publicly on the sidelines.
“Between the lines: OpenAI CEO Altman, who is an investor in Helion, has stepped down as Helion’s board chair and is no longer involved in the company’s board, the source informed Axios.”
“Altman has also recapplyd himself from the deal discussions, according to the same source.”
“Altman holds a sizable stake in Helion, though the size has not been disclosed. He led the company’s $500 million Series E round in 2021. Helion closed a further $425 million funding round in January 2025.”
“Helion is also backed by SoftBank, Peter Thiel’s Mithril Capital and Facebook co-founder Dustin Moskovitz.”
Then a bit about the ‘stretch goal’ with fusion nuclear energy itself:
“How it works: Fusion energy — which creates energy utilizing the same process as the Sun — could be a key step in giving AI companies an abundant clean energy source to match its requireds.”
“Helion believes it is on the cusp of “scientific breakeven” — a key step to reaching the point where the company’s fusion process can generate more energy than it consumes, the source declared.”
“No private company has yet achieved this milestone.”
And of course it’s the earliest of days for this delicate nuclear fusion soufflé:
“Yes, but: The talks with OpenAI involve the basic framework of an agreement, with many conditions yet to be fulfilled, including the selection of a site for Helion to produce the energy.”
“The huge picture: Google has several agreements with Helion rival Commonwealth Fusion Systems, including a deal to purchase 200 megawatts worth of power.”
Remember Microsoft has already been in the mix with helion for three years now:
“What we’re watching: Whether Helion can hit scientific breakeven on a timeline that creates those 2030 and 2035 power commitments a reality.”
We’ll know more about it all in a decade or so.
But it’s applyful to receive a current global snapshot on nuclear fusion as a power supply candidate for the multi-trillion AI Data Center and AI Token Compute quest.
It’s all shaping this AI Tech Wave, and so this ‘stretch goal’ is as important in the mix to understand and track. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
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