In the midst of investments in fusion startups, cracks are beginning to appear

Short overview of the situation

In the field of fusion energy, founders and investors often face conflicts of interest when startups start raising money. At Fusion Fest conference two key questions were discussed:

1) When should one go public?

2) Is it permissible to spend funds on non-core business areas?

Neither question softened even after $1.6 billion was raised in the industry over the past year.

1. Mergers with public companies
TAE Technologies – Merger: In December 2025, a deal was announced with Trump Media & Technology Group (TMTG).

- Financing: $200 million of the planned $300 million has already been secured, allowing continued work on the power plant.
- History: The company has existed for almost 30 years and raised nearly $2 billion before the merger; its valuation was $2 billion, so investors were effectively operating “at zero”.

General Fusion – Merger: In January 2026, plans for a reverse merger with an asset acquisition company were announced.

- Financing: $335 million is expected, and the market value of the combined entity could reach $1 billion.
- Issues: Last year the company laid off 25 % of its staff and struggled to raise capital; in August it received only a short‑term support of $22 million, which proved insufficient.

2. Scientific milestones
- None of the companies have yet achieved scientific break‑even – the critical stage at which the reactor generates more energy than is required for its operation.
- Analysts doubt that TAE or General Fusion will reach this before other private startups.
- If results do not appear in the near future, public markets may negatively assess the prospects of the entire industry.

3. Revenue diversification
To retain investors and maintain liquidity, TAE has begun selling ancillary products: power electronics and radiation therapy devices for cancer treatment.

Other companies are following a similar path:

- Commonwealth Fusion Systems and Tokamak Energy – suppliers of industrial magnets.
- Shine Technologies – developers of equipment for nuclear medicine.

4. Strategy discussion
Analysts were divided on the issue:

- A quick IPO could attract capital, but many believe the companies have not yet reached key milestones.
- Focusing on profitable side projects risks diverting attention from the main goal – building a working fusion power plant.

5. Outlook
It is believed that achieving scientific break‑even may be possible next year. This event could serve as a strong argument for going public and attracting further investment.