The world’s appetite for energy continues to grow, not least driven by the electrification of the economy. Data centers – which are essential for artificial intelligence (AI) – have driven this demand to a great extent. 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 theory is that lighter atomic nuclei fuse together, forming new elements and releasing energy as 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 produces energy by splitting atomic nuclei, nuclear fusion has a much lower risk of accident, and no radioactive waste is produced.
Four German startups in the race
For decades, when it came to nuclear fusion, the focus was primarily on large-scale, government-funded projects such as the International Thermonuclear Experimental Reactor, or ITER. Thirty-five countries, including European Union 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, several private companies have been established around the world with the aim of pursuing nuclear fusion reactor development.
According to a report by the EU agency Fusion for Energy (F4E), about 77 companies are now working to bring nuclear fusion to market. Forty-two are located 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 increase in investment
Nuclear fusion is not only research-intensive, but also extremely expensive. While Germany would like to be the leader in this technology, most private and government funding is flowing to the US and China.
Nevertheless, enthusiasm for nuclear fusion is growing. Companies and investors are determined not to miss this trend and are investing more and more money in its development. Excluding public funds, approximately €13 billion ($14.8 billion) was invested in private merger research by the end of 2025. According to F4E reportInvestment has increased by 30% from June 2025 alone.
The majority of 53% went to American companies, and about a third went to Chinese companies. “Indeed, there are already some ‘unicorns’ worth more than $1 billion in both markets,” the F4E report said.
The remainder – a little more than €700 million – went to eight European companies, with German startups Marvel Fusion and Focused Energy receiving the largest sums.
Concern about non-European dominance
This imbalance is similar to trends in many other economic sectors. Be it solar panels, wind power, semiconductors, electric vehicles, space exploration, social media, or AI – the United States or China often emerge as the market leader due to significant financial resources and government support.
While the Chinese government is investing heavily in nuclear fusion, in the United States the industry is strongly supported by private investors, including Big Tech companies. For more than ten years, Google has not only provided millions of dollars to the American company TAE Technologies, but Google engineers have also been working directly on development projects at TAE.
In addition, Google has invested in the largest US fusion company, Commonwealth Fusion Systems (CFS), and signed a contract to purchase power. American company Helion Energy is backed by OpenAI CEO Sam Altman. Microsoft has also signed a power purchase agreement with Helion Energy.
german advantages
The risk certainly exists that German companies will be left behind, says Professor Markus Roth of TU Darmstadt, the German technical university. co-founding Startup Focused Energy in 2021. Still, Roth remains optimistic. “Even though other countries are currently investing significantly more, we have a strong ecosystem to build upon,” Roth said. He told DW that this ecosystem includes research institutes, startups and industrial companies. Therefore, Roth estimates that German companies can grow faster even with less investment.
Unlike most competitors, Focused Energy relies on laser-based fusion technology. Its effectiveness was demonstrated in late 2022 when US researchers at the National Ignition Facility achieved ignition for the first time, generating more energy from the fusion experiment than the laser energy delivered to the target.
As a result, German energy group RWE is also now supporting nuclear fusion and provided Focused Energy with an additional €60 million in May 2026. 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 hurdles to a fusion reactor, Roth says, is the rapid establishment of supply chains. Although the German optics industry is a global leader, there is still work to be done. “In Germany, we have to learn to build laser systems like building cars on an assembly line but with higher precision,” he said. In this way, the optics industry could become a major pillar of the German economy.
First fusion reactor in the early 2040s?
According to the “High-Tech Agenda for Germany” published in July 2025, the German federal government also sees great potential in nuclear fusion and has identified it as one of six key technologies for Germany’s future. Furthermore, more than €2 billion of public investment has been promised for nuclear fusion during the current legislative period.
However, it will still take some time for the actual electricity to be generated. Focused Energy plans to build a prototype for a commercial fusion reactor by 2037. “In the early 2040s, a ‘first-of-its-kind’ commercial fusion power plant will be installed,” says Markus Roth.
However, until then, a lot of money will need to be invested. Roth says Focused Energy currently needs between €150 million and €200 million per year. “This amount will increase over time. We expect the cost of the first pilot power plant to be several billion euros,” Roth said. “This would not be possible without government support,” he said.
This article was originally published in German.