Each grant comes with a condition attached. The federal government will take an equity interest, which is both non-controlling and non-voting, in each recipient of the grant, as stated by the department. Reuters, which first reported the grants, added that the Commerce Department has granted 19 similar R&D grants in recent months.
“The Trump Administration is accelerating American semiconductor innovation to enhance our domestic energy and power resources,” commented the Commerce Secretary Howard Lutnick.
Helion and Commonwealth lead the fusion money
Two fusion ventures captured the biggest slices. Helion, which is located in Everett, Washington, will get up to $175 million for high-voltage power semiconductors and energy modules that provide the magnetic field for its fusion reactors. According to the company’s statement, the definitive award will be accompanied by $50 million in additional private funding to make up a total of $225 million.
“Deploying fusion power plants at scale will require that we accelerate the development of certain technologies, such as semiconductors,” said David Kirtley, CEO of Helion, in the statement announcing the award. Helion also indicated that Commerce would have a non-voting $175 million interest priced off of its Series G, which valued the company at $15.5 billion. This represents about a 1% stake, according to TechCrunch.
Commonwealth Fusion Systems, based in Massachusetts, will receive up to $85 million for radio frequency plasma heating semiconductors, power electronics, fusion diagnostics, and radiation hardening technology. “These innovations will be an important part of our efforts to build out global deployment of fusion,” said Bob Mumgaard, CEO of Commonwealth Fusion Systems.
AI>Bitcoin miners are competing based on their ability to reduce their cost per hashrate, and the companies that are running AI workloads now have the same pressures regarding power efficiency and cooling. Improved conversion chips and, in the long run, power from fusion reactors, could reduce one of the highest costs common to both enterprises.
Equity strings and a signal to private capital
These awards are insignificant compared to what these companies have raised. Commonwealth has secured around $4 billion and Helion some $3.2 billion in committed capital, while TechCrunch writes that investors have bet more than $14 billion on the whole fusion sector. The Fusion Industry Association has requested that Washington inject $10 billion into the industry as one-time funding, with $5.4 billion going to startups.
The government stake is unique in the way it differs from the previous approach of federal funding. Previously, these were non-dilutive grants, and nothing touched the cap table of these companies.
The same equity structure was seen in deals with MP Materials, USA Rare Earth, and Intel. The big question for venture capitalists is whether this dilution is worthwhile given that the message from Washington is clear: fusion power is a strategically important technology for the country. The message from the miners is where the grid economics will go next.
