Fusion startups are giving the government shares in exchange for awards. Is it worth it?

The U.S. government has recently granted awards totaling $260 million to two fusion startup companies, Helion and Commonwealth Fusion Systems (CFS), under the CHIPS and Science Act of 2022. These funds are meant to support the development of advanced semiconductors used in their reactors. However, these awards come with a stipulation: Helion and CFS must give the government non-voting shares in return.

This means that while the government is injecting capital into the sector, it does not directly benefit from the success of these startups in terms of ownership. The awards are significant because they signal that the U.S. government is once again taking an active interest in the fusion power sector, which has been neglected in recent years.

Despite the $260 million awarded, the industry still needs much more funding to compete with other nations in the race to develop fusion power. The Biden administration introduced a new program called the Milestone Based Fusion Development Program, which pays companies as they hit technical goals, but the funding amounts are still relatively small.

The Fusion Industry Association, a trade group representing fusion startups, has been lobbying the government to provide more substantial support, including a proposed $10 billion injection into the sector. While the awards to Helion and CFS may not have been what the Fusion Industry Association initially sought, they represent progress in the government's renewed interest in fusion power.