INSIDE A TOKAMAK. The doughnut-shaped nuclear fusion reactor chamber | Photo Credit: quantic69

Nuclear fusion, arguably a yet-to-be-proven commercial energy source — and a big-bucks game — is gaining traction. You have large research projects, such as the International Thermonuclear Experimental Reactor (ITER), a multi-country endeavour located in France (to which, incidentally, India is contributing ₹745 crore in 2026-27), alongside many fusion start-ups, which have been receiving investor interest and aim to produce energy in the next decade.

According to the recently released Energy Technology Perspectives (2026) report of the International Energy Agency, cumulative venture capital in fusion energy companies has reached about $11 billion. A few are from India, such as Anubal Fusion, which is technically assisted by the Tata Institute of Fundamental Research (TIFR), and Pranos Fusion, which raised ₹63 crore last month.

At least three other fusion energy companies have announced fund-raise in February. US-based Shine Technologies, which is into businesses such as nuclear medicine, nuclear fuel recycling and nuclear fusion, has received about $750 million since 2018, including $240 million in February this year.

Another American company, Realta Fusion, received a loan of $9.5 million from the Silicon Valley Bank in February, complementing the $36 million of equity funding it secured from a host of investors, including Khosla Ventures. Realta Fusion is a startup spun out of research work at the University of Wisconsin-Madison; the company says it is “developing linear magnetic mirror machines that utilise high-temperature super-conducting magnets”.

OpenStar Technologies of New Zealand got a $21 million loan from its government to set up a “bespoke fusion energy research and development facility”. This, read in conjunction with the UK government releasing last month a fusion energy strategy paper, illustrates the keenness of governments in supporting home-grown fusion technologies — a lesson for India.

What explains the sudden and growing interest in fusion, which still stands on shaky ground? The IEA report reasons that “falling computation costs, more data and technical breakthroughs have driven AI capabilities to accelerate energy innovation”, while cautioning that “the extent of its real-world impact remains to be seen”.

Recent advances

The report speaks of “some important advances in fusion technology” in recent times. Fusion energy is all about getting two atoms — mostly from the two isotopes of hydrogen, deuterium and tritium — to merge, producing heat in the process. For this, you need a pool of plasma confined in extremely high temperatures. Adding to that challenge is the problem of neutrons flying off and hitting the walls of the vessel, typically the doughnut-shaped tokamak, making the walls brittle.

Tackling these problems calls for innovative thinking — this is where start-ups, born in university research labs, see a play for themselves. For example, Germany’s Gauss Fusion, which aims to have a commercial plant in the early 2040s, is working on enhanced tritium generation using an isotope of lithium (Li-6). Tritium (unlike deuterium) is a key ingredient and in short supply. Bengaluru-based Anubal Fusion, backed by Speciale Invest, is toying with the idea of bombarding boron-11 with protons using TIFR-made high-power lasers, an approach that could side-step some challenges encountered in conventional reactors.

While nuclear fusion is dressing up for commercialisation, it is not happening anytime soon. However, as the IEA report notes, “if realised, the prize will be extraordinary”. Fusion produces a lot of cheap energy, with no emissions and shorter-lived radioactive waste, an irresistible prospect for venture capital.

‘Not hype’

“The renewed investor interest in fusion isn’t hype,” says Vishesh Rajaram, Founding Partner at Speciale Invest. “It is a rational response to the scale of the climate challenge and the real progress being made in the lab,” he told Quantum.

Speciale Invest funds deep-tech startups; its portfolio has over 40 investees. The fund house said its investment in Anubal Fusion reflected the belief that “India can, and should have a seat at the table in defining the energy technologies of the next century”. Fusion sits at the core of these technologies.

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Published on April 6, 2026