German startups compete in global race for nuclear fusion

The world's appetite for energy continues to grow, driven not least by the electrification of the economy. Data centers — which are essential for artificial intelligence (AI) — have significantly fueled this demand. Nuclear fusion appears to be the ideal solution. The International Energy Agency (IEA) estimates that by 2050, the fusion energy sector could be worth more than $350 billion (€307 billion).

The principle is that light atomic nuclei fuse together, forming new elements and releasing energy in the form of heat. This heat can be used to generate electricity regardless of the weather, with a secure supply, without fossil fuels and without greenhouse gases. Unlike conventional nuclear fission, which generates energy by splitting atomic nuclei, the risk of an accident in nuclear fusion is very low, and no radioactive waste is produced.

Four German startups in the race

For decades, when it came to nuclear fusion, attention focused primarily on large-scale, government-funded projects such as the International Thermonuclear Experimental Reactor, or ITER. Thirty-five countries — including EU member states, the United States, Russia and China — are collaborating to build an experimental reactor in southern France. However, since construction began in 2007, costs have skyrocketed, while completion has been repeatedly delayed. Commissioning is currently scheduled for 2034–36.

Meanwhile, numerous private companies have been founded worldwide with the aim of advancing the development of a nuclear fusion reactor, too.

According to a report by the EU agency Fusion for Energy (F4E), around 77 companies are now working to bring nuclear fusion to market. Forty-two are based in the United States, eight in China, and six in the United Kingdom. In Germany, Focused Energy, Marvel Fusion, Proxima Fusion, and Gauss Fusion have entered the market.

Rapid rise in investment

Nuclear fusion is not only research-intensive, it is also very expensive. While Germany would like to take the lead in this technology, most private and government funding is flowing into the U.S. and China.

Still, enthusiasm for nuclear fusion is rising. Companies and investors seem determined not to miss out on this trend and are pouring more and more money into its development. Excluding public funds, nearly €13 billion ($14.8bn) were invested in private fusion research by the end of 2025. According to the F4E report, investments have grown by 30% since June 2025 alone.

The majority of 53% went to U.S. companies, and about one-third to Chinese companies. "In fact, in both markets there are already some 'unicorns' valued at over $1 billion," the F4E report said.

The remainder — just over €700 million — went to the eight European companies, with the German startups Marvel Fusion and Focused Energy receiving the largest sums.

Concern about non-European dominance

The imbalance is reminiscent of trends in many other economic sectors. Whether it is solar panels, wind power, semiconductors, electric vehicles, space exploration, social media, or AI — the United States or China often emerge as the market leader thanks to significant financial resources and government support.

While the Chinese government is investing heavily in nuclear fusion, the industry in the United States is strongly supported by private investors including Big Tech companies. For over ten years, Google has not only provided the U.S. company TAE Technologies with hundreds of millions of dollars, but Google engineers have also been working directly at TAE on development projects.

In addition, Google has invested in the largest U.S. fusion company, Commonwealth Fusion Systems (CFS), and signed a contract to purchase electricity. The U.S. company Helion Energy is backed by Sam Altman, the CEO of OpenAI. Microsoft has also signed a power purchase agreement with Helion Energy.

German advantages

The risk that German companies will be left behind certainly exists, says Markus Roth, professor at the German technical university TU Darmstadt, who also co-founded the startup Focused Energy in 2021. Nevertheless, Roth remains optimistic. "Even though other countries are currently investing significantly more, we have a stronger ecosystem to build on," Roth said. This ecosystem consists of research institutions, startups, and industrial companies, he told DW. Therefore, German companies could make faster progress even with less investment, Roth predicts.

Unlike most competitors, Focused Energy relies on laser-based fusion technology. Its effectiveness was demonstrated in late 2022 when U.S. researchers at the National Ignition Facility achieved ignition for the first time, producing more energy from a fusion experiment than the laser energy delivered to the target.

As a result, the German energy conglomerate RWE is now also backing nuclear fusion and in May 2026 provided Focused Energy with an additional €60 million. In addition, a prototype fusion power plant is to be built on the site of RWE's former nuclear power plant in Biblis.

One of the major obstacles on the path to a fusion reactor is the rapid establishment of supply chains, says Roth. While the German optics industry is a global leader, there is still work to be done. "In Germany, we need to learn to build laser systems the way we build cars, on an assembly line but with high precision," he said. That way, the optics industry could become a major pillar of the German economy.

The first fusion reactor in the early 2040s?

The German federal government also sees great potential in nuclear fusion and has identified it as one of the six key technologies for Germany's future, according to the "High-Tech Agenda for Germany" published in July 2025. In addition, more than €2 billion in public investment for nuclear fusion have been pledged during the current legislative term.

However, it will still be some time before actual electricity is generated. Focused Energy plans to build a prototype for a commercial fusion reactor by 2037. "In the early 2040s, the 'first-of-a-kind' commercial fusion power plant will follow," says Markus Roth.

Until then, however, a great deal of money will still need to be invested. Focused Energy currently needs between €150 million and €200 million per year, says Roth. "This amount will increase over time. We expect a first pilot power plant to cost several billion euros," Roth said, adding that "without government support this will not be possible."

This article was originally published in German.