Fusion power startups find new partners in the defense world

Fusion startups that have aimed for commercial electricity generation are increasingly formalizing ties to the defense sector. As venture funding for climate technologies has slowed, several fusion firms are pursuing defense contracts and partnerships that leverage the same high-energy laser systems they are developing for reactors.

The defense interest is partly practical. Modern conflict has increased demand for counter-drone and rapid-response systems, and laser weapons—which use electricity to deliver many low-cost shots—are a promising alternative to expensive single-use missiles. The industry often points to an illustrative mismatch from about a decade ago when a U.S. ally used a roughly $3 million Patriot missile to down a $200 consumer drone.

Some fusion startups are natural partners for defense firms because their reactor concepts rely on powerful lasers. Denver-based Xcimer, which operates what it calls the largest privately owned laser system, announced a deal with RTX Ventures that includes investment and gives RTX the opportunity to explore use cases for Xcimer’s lasers. Xcimer’s current Phoenix system runs at significantly lower power than needed for a full-scale power plant, but it is sufficient to attract defense interest.

Pacific Fusion has also moved toward defense collaboration: the company signed an MOU with the NNSA and has begun building a demonstration facility in New Mexico not far from Sandia and Los Alamos laboratories. Company leaders say the site’s fusion outputs will exceed the energy levels the government now uses for weapons-related experiments, and the firm’s founders have prior experience at national labs, which helped shape those defense-oriented ties.

Fusion’s link to national security is not new — the field grew out of mid-20th century weapons research, and facilities such as the National Ignition Facility have long supported security-related work. With private fusion firms now courting defense partners and agencies, the renewed collaboration could provide additional funding and R&D pathways as companies continue to pursue eventual power-grid applications.