How the U.S. is losing ground to China in nuclear fusion, as AI power needs surge

Published

6 months ago

March 16, 2025

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China and the U.S. are in a race to create the first grid-scale nuclear fusion energy. After decades of U.S. leadership, China is catching up by spending twice as much and building projects at record speed.

Often called the holy grail of clean energy, nuclear fusion creates four times more energy per kilogram of fuel than traditional nuclear fission and four million times more than burning coal, with no greenhouse gasses or long-term radioactive waste. If all goes to plan, it will be at least a $1 trillion market by 2050, according to Ignition Research.

There’s just one big problem.

“The only working fusion power plants right now in the universe are stars,” said Dennis Whyte, professor of nuclear science and engineering at Massachusetts Institute of Technology.

The U.S. was first to large-scale use of fusion with a hydrogen bomb test in 1952. In the seven decades since, scientists around the world have been struggling to harness fusion reactions for power generation.

Fusion reactions occur when hydrogen atoms reach extreme enough temperatures that they fuse together, forming a super-heated gas called plasma. The mass shed during the process can, in theory, be turned into huge amounts of energy, but the plasma is hard to control. One popular method uses powerful magnets to suspend and control the plasma inside a tokamak, which is a metal donut-shaped device. Another uses high-energy lasers, pointed at a peppercorn-sized pellet of fuel, rapidly compressing and imploding it.

That’s how the U.S. pulled off the historic first fusion ignition, producing net positive energy at the Lawrence Livermore National Ignition Facility, or NIF, in 2022.

Here, the preamplifier module increases the laser energy as it heads toward the target chamber at the National Ignition Facitility.

Photo courtesy Damien Jemison at Lawrence Livermore National Laboratory

Since then, private investment in U.S. fusion startups has soared to more than $8 billion, up from $1.2 billion in 2021, according to the Fusion Industry Association. Of the FIA’s 40 member companies, 25 of them are based in the U.S.

Traditional nuclear power, created from fission instead of fusion, has seen a big uptick in investment as Big Tech looks for ways to fill the ever-increasing power needs of AI data centers. Amazon, Google and Meta have signed a pledge to help triple nuclear energy worldwide by 2050.

“If you care about AI, if you care about energy leadership … you have to make investments into fusion,” FIA CEO Andrew Holland said. “This is something that if the United States doesn’t lead on, then China will.”

Money, size and speed

While the U.S. has the most active nuclear power plants, China is king of new projects.

Despite breaking ground on its first reactor nearly four decades after the U.S. pioneered the tech, China’s now building far more fission power plants than any other country.

China entered the fusion race in the early 2000s, about 50 years after the U.S., when it joined more than 30 nations to collaborate on the International Thermonuclear Experimental Reactor fusion megaproject in France. But ITER has since hit major delays.

The race is on between individual nations, but the U.S. private sector remains in the lead. Of the $8 billion in global private fusion investment, $6 billion is in the U.S., according to the FIA.

Commonwealth Fusion Systems, a startup born out of MIT, has raised the most money, nearly $2 billion from the likes of Bill Gates, Jeff Bezos and Google.

Washington-based Helion has raised $1 billion from investors like Open AI’s Sam Altman and a highly ambitious deal with Microsoft to deliver fusion power to the grid by 2028. Google-backed TAE Technologies has raised $1.2 billion.

“Whoever has essentially abundant limitless energy … can impact everything you think of,” said Michl Binderbauer, CEO of TAE Technologies. “That is a scary thought if that’s in the wrong hands.”

When it comes to public funding, China is way ahead.

Beijing is putting a reported $1.5 billion annually toward the effort while U.S. federal dollars for fusion have averaged about $800 million annually the last few years, according to the Energy Department’s Office of Fusion Energy Sciences.

President Donald Trump ramped up support for nuclear, including fusion, during his first term, and that continued under former President Joe Biden. It’s unclear what fusion funding will look like in Trump’s second term, amid massive federal downsizing.

U.S. senators and fusion experts published a report in February calling for $10 billion of federal funds to help keep the U.S. from losing its lead.

But the U.S. may already have lost the lead when it comes to reactor size. Generally, the bigger the footprint, the more efficiently a reactor can heat and confine the plasma, increasing the chances for net positive energy.

A satellite image from January 11, 2025, shows a massive nuclear project in Mianyang, China, that appears to include four laser bays pointing at a containment dome roughly the size of a football field, about twice as big as the U.S. National Ignition Fusion Facility.

Planet Labs PBC

A series of satellite images provided to CNBC by Planet Labs shows the rapid building in 2024 of a giant new laser-fusion site in China. The containment dome where the fusion reaction will occur is roughly twice the size of NIF, the U.S. laser-fusion project, CNA Corporation’s Decker Eveleth said. The China site is likely a fusion-fission hybrid, FIA’s Holland said.

“A fusion-fission hybrid essentially is like replicating a bomb, but as a power plant. It would never work, never fly in a place like the United States, where you have a regulatory regime that determines safety,” Holland said. “But in a regime like China, where it doesn’t matter what the people who live next door say, if the government says we want to do it, we’re going to do it.”

China’s existing national tokamak project, EAST, has been setting records, volleying with France’s project WEST in the last couple months for the longest ever containment of plasma inside a reactor, although that’s a less monumental milestone than net positive energy.

Another huge state-funded Chinese project, CRAFT, is set to reach completion this year. The $700 million 100-acre fusion campus in eastern China will also have a new tokamak called BEST that is expected to be finished in 2027.

China’s CRAFT appears to follow a U.S. plan published by hundreds of scientists in 2020, Holland said.

“Congress has not done anything to spend the money to put this into action,” he said. “We published this thing, and the Chinese then went and built it.”

U.S. fusion startup Helion told CNBC some Chinese projects are copying its patented designs, too.

“China, specifically, we’re seeing investment from the state agencies to invest in companies to then replicate U.S. companies’ designs,” said David Kirtley, founder and CEO of Helion.

Manpower and materials

China’s rapid rollout of new fusion projects comes at a time when American efforts have largely been focused on upgrading existing machines, some of them more than 30 years old.

“Nobody wants to work on old dinosaurs, ” said TAE’s Binderbauer, adding that new projects attract more talent. “There’s a bit of a brain drain.”

In the early 2000s, budget cuts to domestic fusion research forced U.S. universities to halt work on new machines and send researchers to learn on other country’s machines, including China’s.

“Instead of building new ones, we went to China and helped them build theirs, thinking, ‘Oh, that’d be great. They’ll have the facility. We’ll be really smart,'” said Bob Mumgaard, co-founder and CEO of Commonwealth Fusion Systems. “Well, that was a big mistake.”

China now has more fusion patents than any other country, and 10 times the number of doctorates in fusion science and engineering as the U.S., according to a report from Nikkei Asia.

“There’s a finite labor pool in the West that all the companies compete for,” Binderbauer said. “That is a fundamental constraint.”

Commonwealth Fusion Systems SPARC tokamak being assembled in December 2024 in Devens, Massachusetts, is scheduled to use superconducting magnets to reach fusion ignition in 2027.

Commonwealth Fusion Systems

Besides manpower, fusion projects need a huge amount of materials, such as high power magnets, specific metals, capacitors and power semiconductors. Helion’s Kirtley said the timeline of the company’s latest prototype, Polaris, was set entirely by the availability of semiconductors.

China is making moves to corner the supply chain for many of these materials, in a similar play to how it came to dominate solar and EV batteries.

“China is investing ten times the rate that the United States is in advanced material development,” Kirtley said. “That’s something we have got to change.”

Shanghai-based fusion company Energy Singularity told CNBC in a statement that it “undoubtedly” benefits from China’s “efficient supply chain.” In June, Energy Singularity said it successfully created plasma in record time, just two years after beginning the design of its tokamak.

That’s still a far cry from reaching grid-scale, commercial fusion power. Helion aims to be first with a goal of 2028. Commonwealth has announced the site in Virginia where it plans to bring the first fusion power plant, ARC, online in the early 2030s.

“Even though the first ones might be in the U.S., I don’t think we should take comfort in that,” said MIT’s Whyte. “The finish line is actually a mature fusion industry that’s producing products for use around the world, including in AI centers.”

Watch: https://www.cnbc.com/video/2025/03/14/china-is-catching-the-us-in-nuclear-fusion-amid-ai-power-demand.html

Technology

AppLovin and Robinhood added to S&P 500

Published

2 days ago

September 5, 2025

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Shares of advertising technology company AppLovin and stock trading app Robinhood Markets each jumped about 7% in extended trading on Friday after S&P Global said the two will join the S&P 500 index.

The changes will go into effect before the beginning of trading on Sept. 22, S&P Global announced in a statement. AppLovin will replace MarketAxess Holdings, while Robinhood will take the place of Caesars Entertainment.

In March, short-seller Fuzzy Panda Research advised the committee for the large-cap U.S. index to keep AppLovin from becoming a constituent. AppLovin shares dropped 15% in December, when the committee picked Workday to join the S&P 500. Robinhood, for its part, saw shares slip 2% in June when it was excluded from a quarterly rebalancing of the index.

The S&P 500 already has a heavy concentration of large technology companies. Datadog and DoorDash entered earlier this year.

It’s normal for stocks to go up on news of their inclusion in a major index such as the S&P 500. Fund managers need to buy shares to reflect the updates.

FTC commissioner questions status of Snap AI chatbot complaint: ‘People deserve answers’

Published

2 days ago

September 5, 2025

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FTC commissioner questions status of Snap AI chatbot complaint: 'People deserve answers'

FTC Commissioner Rebecca Slaughter on President Trump's latest attempt to fire her

U.S. Federal Trade Commission Commissioner Rebecca Slaughter raised questions on Friday about the status of an artificial intelligence chatbot complaint against Snap that the agency referred to the Department of Justice earlier this year.

In January, the FTC announced that it would refer a non-public complaint regarding allegations that Snap’s My AI chatbot posed potential “risks and harms” to young users and said it would refer the suit to the DOJ “in the public interest.”

“We don’t know what has happened to that complaint,” Slaughter said on CNBC’s ‘The Exchange.” “The public does not know what has happened to that complaint, and that’s the kind of thing that I think people deserve answers on.”

Snap’s My AI chatbot, which debuted in 2023, is powered by large language models from OpenAI and Google and has drawn scrutiny for problematic responses.

The DOJ did not immediately respond to a request for comment. Snap declined to comment.

Slaugther’s comments came a day after President Donald Trump held a White House dinner with several tech executives, including Google CEO Sundar Pichai, Meta CEO Mark Zuckerberg and Apple CEO Tim Cook.

Google leads monster week for tech, pushing megacaps to combined $21 trillion in market cap

Published

2 days ago

September 5, 2025

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Google leads monster week for tech, pushing megacaps to combined trillion in market cap

Alphabet and Google CEO Sundar Pichai meets with Polish Prime Minister Donald Tusk at Google for Startups in Warsaw, Poland, on February 13, 2025.

Klaudia Radecka | Nurphoto | Getty Images

From the courtroom to the boardroom, it was a big week for tech investors.

The resolution of Google’s antitrust case led to sharp rallies for Alphabet and Apple. Broadcom shareholders cheered a new $10 billion customer. And Tesla’s stock was buoyed by a freshly proposed pay package for CEO Elon Musk.

Add it up, and the U.S. tech industry’s eight trillion-dollar companies gained a combined $420 billion in market cap this week, lifting their total value to $21 trillion, despite a slide in Nvidia shares.

Those companies now account for roughly 36% of the S&P 500, a proportion so great by historical standards that Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC by email, “there are no comparisons.”

Broadcom pops

Broadcom shares spike briefly on Q4 beat

While OpenAI was an indirect catalyst for Google and Apple this week, it was more directly tied to the huge rally in Broadcom’s stock.

Following Broadcom’s better-than-expected earnings report on Thursday, CEO Hock Tan told analysts that his chipmaker had secured a $10 billion contract with a new customer, which would be the company’s fourth large AI client.

Several analysts said the new customer is OpenAI, and the Financial Times reported on a partnership between the two companies.

Broadcom is the newest entrant into the trillion-dollar club, thanks to the company’s custom chips for AI, already used by Google, Meta and TikTok parent ByteDance. With Its 13% jump this week, the stock is now up 120% in the past year, lifting Broadcom’s market cap to around $1.6 trillion.

“The company is firing on all cylinders with clear line of sight for growth supported by significant backlog,” analysts at Barclays wrote in a note, maintaining their buy recommendation and lifting their price target on the stock.

For the other giant AI chipmaker, the past week wasn’t so good.

Nvidia shares fell more than 4% in the holiday-shortened week, the worst performance among the megacaps. There was no apparent negative news for Nvidia, but the stock has now dropped for four consecutive weeks.

Still, Nvidia remains the largest company by market cap, valued at over $4 trillion, with its stock up 56% in the past 12 months.

Microsoft also fell this week and is on an extended slide, dropping for five straight weeks. Shares are still up 21% over the last 12 months.

On the flipside, Tesla has been the laggard in the group. Shares of the electric vehicle maker are down 13% this year due to a multi-quarter sales slump that reflects rising competition from lower-cost Chinese manufacturers and an aging lineup of EVs.

But Tesla shares climbed 5% this week, sparked mostly by gains on Friday after the company said it wants investors to approve a pay plan for Musk that could be worth up to almost $1 trillion.

The payouts, split into 12 tranches, would require Tesla to see significant value appreciation, starting with the first award that won’t kick in until the company almost doubles its market cap to $2 trillion.

Tesla Chairwoman Robyn Denholm told CNBC’s Andrew Ross Sorkin the plan was designed to keep Musk, the world’s richest person, “motivated and focused on delivering for the company.”

WATCH: Tesla board chair on Elon Musk’s pay plan