Sam Altman, co-founder and chief executive officer of OpenAI Inc., speaks during TechCrunch Disrupt 2019 in San Francisco, California, on Thursday, Oct. 3, 2019.
David Paul Morris | Bloomberg | Getty Images
Nuclear fusion is the ephemeral holy grail of climate technology. It would provide nearly limitless amounts of clean energy without the byproduct of long-lasting radioactive waste to be managed.
It’s also the biggest bet Silicon Valley luminary Sam Altman has ever made.
“This is the biggest investment I’ve ever made,” Altman told CNBC of his $375 million investment in Helion Energy, announced Friday. It’s part of a larger $500 million round that the start-up will use to complete the construction of a fusion facility near its headquarters in Everett, Washington.
Altman was the president of the Silicon Valley start-up shop Y Combinator from 2014 through 2019 and is now the CEO of Open AI, an organization that researches artificial intelligence, which he co-founded with Elon Musk and others. (Musk has since stepped away, citing conflicts of interest with Tesla’s AI pursuits.) Altman has also been a big proponent of universal basic income, the idea that the government should give every citizen a basic living wage to compensate for technological disruptions that make some jobs irrelevant.
Years ago, Altman had made a list of the technologies he wanted to get involved in, and artificial intelligence and energy topped that list.
Altman visited four fusion companies, and made his first investment of $9.5 million into Helion 2015.
“I immediately upon meeting the Helion founders thought they were the best and their technical approach was the best by far,” he said.
Helion uses “pulsed magnetic fusion,” Kirtley explained. That means the company uses aluminum magnets to compress its fuel and then expand it to get electricity out directly.
Kirtley compares Helion’s fusion machine to a diesel engine, while older technologies are more like a campfire. With a campfire, you stoke the fire to generate heat. In a diesel engine, you inject the fuel into a container, then compress and heat the fuel until it begins to burn. “And then you use the expansion of it to directly do useful work,” said Kirtley.
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“By taking this new fresh approach and some of the old physics, we can we can move forward and do it fast,” Kirtley said. “The systems end up being a lot smaller, a lot faster to iterate, and then that gets us to commercially useful electricity, which is solving the climate change problem, as soon as possible.”
Helion Energy is using aneutronic fusion, meaning “they don’t have a lot high energy neutrons present in their fusion reaction,” according to Brett Rampal, the Director of Nuclear Innovation at the non-profit Clean Air Task Force.
There are still unknowns with aneutronic fusion, Rampal said.
“An aneutronic approach, like Helion Energy is pursuing, could have potential benefits that other approaches do not, but could also have different downsides and challenges to achieving commercial fusion energy production,” Rampal said.
Overall, though, Rampal believes the wave of investment and innovation in fusion over the last two decades is good news for the industry.
“With so much left to be proven for true commercial fusion approaches, coming at the problem from multiple different angles and trying to determine where the best pros and cons lie with individual technologies is exactly where the fusion industry should be right now,” Rampal told CNBC.
Altman’s three-part utopian vision
For Altman, fusion is part of his overall vision of increasing abundance through technological innovation — a vision that stands apart from many investors and thinkers in the climate space.
“Number one, I think it is our best shot to get out of the climate crisis,” Altman said.
More generally, “decreasing the cost of energy is one of the best ways to improve people’s quality of lives,” Altman said. “The correlation there is just incredibly big.”
Altman’s utopian vision encompasses three parts.
Artificial intelligence, Altman said, will drive the cost of goods and services down with exponential increases in productivity. Universal basic income will be necessary to pay people’s cost of living in the transition period where many jobs are eliminated. And virtually limitless, low-cost, green energy is the third part of Altman’s vision for the world.
Helion Energy co-founders, Chris Pihl (L) and David Kirtley (R).
Photo courtesy Helion Energy
“So for the same reason I’m so interested in AI, I think that fusion, as a path to abundant energy, is sort of the other part of the equation to get to abundance,” Altman told CNBC.
“I think fundamentally today in the world, the two limiting commodities you see everywhere are intelligence, which we’re trying to work on with AI, and energy, which I think Helion has the most exciting thing in the entire world happening for right now.”
But Altman knows that fusion has been elusive for decades. “The joke in fusion is that it’s been 30 years away for 50 years,” he said.
Kirtley was similarly dismayed by the seemingly impossibly time frames to commercialize fusion. “I got into fusion, spent a couple of years learning everything I could about fusion and all the typical approaches, and actually pivoted away from fusion. I said that these timelines don’t help us,” Kirtley told CNBC.
He worked with NASA, the Air Force and the Defense Advanced Research Projects Agency (DARPA) working on space propulsion technology to help humans travel to Mars and beyond.
But the idea of using approaching fusion with new technologies drew Kirtley back.
The mission is personal for Kirtley, as tackling climate change is for so many. He moved from Southern California to Washington in 2008.
“I watch now Washington summers where we have fires now, and we didn’t when I first moved here,” he said. The urgency is tangible as they are “watching the glaciers melt on Mount Rainier.”
Microsoft owns lots of Nvidia graphics processing units, but it isn’t using them to develop state-of-the-art artificial intelligence models.
There are good reasons for that position, Mustafa Suleyman, the company’s CEO of AI, told CNBC’s Steve Kovach in an interview on Friday. Waiting to build models that are “three or six months behind” offers several advantages, including lower costs and the ability to concentrate on specific use cases, Suleyman said.
It’s “cheaper to give a specific answer once you’ve waited for the first three or six months for the frontier to go first. We call that off-frontier,” he said. “That’s actually our strategy, is to really play a very tight second, given the capital-intensiveness of these models.”
Suleyman made a name for himself as a co-founder of DeepMind, the AI lab that Google bought in 2014, reportedly for $400 million to $650 million. Suleyman arrived at Microsoft last year alongside other employees of the startup Inflection, where he had been CEO.
More than ever, Microsoft counts on relationships with other companies to grow.
It gets AI models from San Francisco startup OpenAI and supplemental computing power from newly public CoreWeave in New Jersey. Microsoft has repeatedly enriched Bing, Windows and other products with OpenAI’s latest systems for writing human-like language and generating images.
Microsoft’s Copilot will gain “memory” to retain key facts about people who repeatedly use the assistant, Suleyman said Friday at an event in Microsoft’s Redmond, Washington, headquarters to commemorate the company’s 50th birthday. That feature came first to OpenAI’s ChatGPT, which has 500 million weekly users.
Through ChatGPT, people can access top-flight large language models such as the o1 reasoning model that takes time before spitting out an answer. OpenAI introduced that capability in September — only weeks later did Microsoft bring a similar capability called Think Deeper to Copilot.
Microsoft occasionally releases open-source small-language models that can run on PCs. They don’t require powerful server GPUs, making them different from OpenAI’s o1.
OpenAI and Microsoft have held a tight relationship shortly after the startup launched its ChatGPT chatbot in late 2022, effectively kicking off the generative AI race. In total, Microsoft has invested $13.75 billion in the startup, but more recently, fissures in the relationship between the two companies have begun to show.
Microsoft added OpenAI to its list of competitors in July 2024, and OpenAI in January announced that it was working with rival cloud provider Oracle on the $500 billion Stargate project. That came after years of OpenAI exclusively relying on Microsoft’s Azure cloud. Despite OpenAI partnering with Oracle, Microsoft in a blog post announced that the startup had “recently made a new, large Azure commitment.”
“Look, it’s absolutely mission-critical that long-term, we are able to do AI self-sufficiently at Microsoft,” Suleyman said. “At the same time, I think about these things over five and 10 year periods. You know, until 2030 at least, we are deeply partnered with OpenAI, who have [had an] enormously successful relationship for us.
Microsoft is focused on building its own AI internally, but the company is not pushing itself to build the most cutting-edge models, Suleyman said.
“We have an incredibly strong AI team, huge amounts of compute, and it’s very important to us that, you know, maybe we don’t develop the absolute frontier, the best model in the world first,” he said. “That’s very, very expensive to do and unnecessary to cause that duplication.”
President Trump’s new tariffs on goods that the U.S. imports from over 100 countries will have an effect on consumers, former Microsoft CEO Steve Ballmer told CNBC on Friday. Investors will feel the pain, too.
Microsoft’s stock dropped almost 6% in the past two days, as the Nasdaq wrapped up its worst week in five years.
“As a Microsoft shareholder, this kind of thing is not good,” Ballmer said, in an interview with Andrew Ross Sorkin that was tied to Microsoft’s 50th anniversary celebration. “It creates opportunity to be a serious, long-term player.”
Ballmer was sandwiched in between Microsoft co-founder Bill Gates and current CEO Satya Nadella for the interview.
“I took just enough economics in college — that tariffs are actually going to bring some turmoil,” said Ballmer, who was succeeded by Nadella in 2014. Gates, Microsoft’s first CEO, convinced Ballmer to join the company in 1980.
Gates, Ballmer and Nadella attended proceedings at Microsoft’s Redmond, Washington, campus on Friday to celebrate its first half-century.
Between the tariffs and weak quarterly revenue guidance announced in January, Microsoft’s stock is on track for its fifth straight month of declines, which would be the worst stretch since 2009. But the company remains a leader in the PC operating system and productivity software markets, and its partnership with startup OpenAI has led to gains in cloud computing.
“I think that disruption is very hard on people, and so the decision to do something for which disruption was inevitable, that needs a lot of popular support, and nobody could game theorize exactly who is going to do what in response,” Ballmer said, regarding the tariffs. “So, I think citizens really like stability a lot. And I hope people — individuals who will feel this, because people are feeling it, not just the stock market, people are going to feel it.”
Ballmer, who owns the Los Angeles Clippers, is among Microsoft’s biggest fans. He said he’s the company’s largest investor. In 2014, shortly after he bought the basketball team for $2 billion, he held over 333 million shares of the stock, according to a regulatory filing.
“I’m not going to probably have 50 more years on the planet,” he said. “But whatever minutes I have, I’m gonna be a large Microsoft shareholder.” He said there’s a bright future for computing, storage and intelligence. Microsoft launched the first Azure services while Ballmer was CEO.
Earlier this week Bloomberg reported that Microsoft, which pledged to spend $80 billion on AI-enabled data center infrastructure in the current fiscal year, has stopped discussions or pushed back the opening of facilities in the U.S. and abroad.
JPMorgan Chase’s chief economist, Bruce Kasman, said in a Thursday note that the chance of a global recession will be 60% if Trump’s tariffs kick in as described. His previous estimate was 40%.
“Fifty years from now, or 25 years from now, what is the one thing you can be guaranteed of, is the world needs more compute,” Nadella said. “So I want to keep those two thoughts and then take one step at a time, and then whatever are the geopolitical or economic shifts, we’ll adjust to it.”
Gates, who along with co-founder Paul Allen, sought to build a software company rather than sell both software and hardware, said he wasn’t sure what the economic effects of the tariffs will be. Today, most of Microsoft’s revenue comes from software. It also sells Surface PCs and Xbox consoles.
“So far, it’s just on goods, but you know, will it eventually be on services? Who knows?” said Gates, who reportedly donated around $50 million to a nonprofit that supported Democratic nominee Kamala Harris’ losing campaign.
AppLovin CEO Adam Foroughi provided more clarity on the ad-tech company’s late-stage effort to acquire TikTok, calling his offer a “much stronger bid than others” on CNBC’s The Exchange Friday afternoon.
Foroughi said the company is proposing a merger between AppLovin and the entire global business of TikTok, characterizing the deal as a “partnership” where the Chinese could participate in the upside while AppLovin would run the app.
“If you pair our algorithm with the TikTok audience, the expansion on that platform for dollars spent will be through the roof,” Foroughi said.
The news comes as President Trump announced he would extend the deadline a second time for TikTok’s Chinese-owned parent company ByteDance to sell the U.S. subsidiary of TikTok to an American buyer or face an effective ban on U.S. app stores. The new deadline is now in June, which, as Foroughi described, “buys more time to put the pieces together” on AppLovin’s bid.
“The president’s a great dealmaker — we’re proposing, essentially an enhancement to the deal that they’ve been working on, but a bigger version of all the deals contemplated,” he added.
AppLovin faces a crowded field of other interested U.S. backers, including Amazon, Oracle, billionaire Frank McCourt and his Project Liberty consortium, and numerous private equity firms. Some proposals reportedly structure the deal to give a U.S. buyer 50% ownership of the company, rather than a complete acquisition. The Chinese government will still need to approve the deal, and AppLovin’s interest in purchasing TikTok in “all markets outside of China” is “preliminary,” according to an April 3 SEC filing.
Correction: A prior version of this story incorrectly characterized China’s ongoing role in TikTok should AppLovin acquire the app.