Powering U.S. Innovation: The Need for Federal Investment in Fusion Infrastructure

Fusion energy—long considered the “holy grail” of clean energy—is rapidly moving from scientific ambition to commercial reality. For more than seven decades, the United States has led the world in fusion research, culminating in the historic 2022 ignition breakthrough at the U.S. Department of Energy’s (DOE's) Lawrence Livermore National Laboratory (LLNL) in California. Yet today, China is moving to challenge that leadership, accelerating scientific progress with large-scale state investment and coordinated industrial policy aimed at commercial-scale fusion deployment. This emerging competition is not simply energy innovation; it is about who will shape the next era of global economic growth, technological leadership, and strategic power. Without a decisive shift in U.S. policy and federal investment, Washington risks ceding first-mover advantage in a transformative technology it helped pioneer. 

What is Fusion Energy? 

Fusion energy is generated through nuclear fusion, which occurs when two atomic nuclei combine to create a heavier nucleus, releasing significant amounts of energy. A controlled fusion reaction creates 4 million times more energy than coal, oil, and gas and four times more energy than the fission process per kilogram of fuel, without creating any long-lived radioactive waste or carbon emissions. In contrast, nuclear fission, which powers modern nuclear reactors, occurs when an unstable atomic nucleus is split into two smaller atoms. While fission has provided carbon-free energy for decades, fusion has the potential to produce limitless energy because its primary fuel source—hydrogen isotopes—is abundant and widely available. Furthermore, with fusion there is no risk of a nuclear meltdown. Accordingly, whichever country can harness fusion energy first will not only secure energy independence but also reap significant economic and environmental benefits. 

The United States’ Advantage and Leadership in Fusion Energy 

The United States retains important advantages in the fusion race. It achieved fusion ignition at LLNL in 2022, which is a milestone no other country has replicated and has attracted more private fusion investment than any other country. The achievement of fusion ignition at the LLNL was the result of sustained federal research and investment into fusion energy and technology since the 1950s. The National Ignition Facility (NIF) at LLNL cost about $3.5 billion in federal funds to build and foundational tokamak (i.e. using a powerful magnetic field to confine plasma) science has been advanced for decades through DOE- funded institutions such as the Princeton Plasma Physics Laboratory and DIII-D National Fusion Facility at General Atomics. The U.S. private fusion industry is built on a foundation of publicly funded research. Without government investment to establish fusion's scientific feasibility, private capital would not have followed because the costs and risks would be too high. For example, U.S.-based Commonwealth Fusion Systems, which is the largest commercial fusion company, was spun out of research at the Massachusetts Institute of Technology (MIT). MIT receives significant funding in the form of DOE grants to conduct fusion research, illustrating that federal investment laid the groundwork for the scale-up of the U.S. private fusion industry.  

As of 2025, total global private investment in fusion has surpassed $15 billion, with 53% directed toward U.S.-based companies. China comes in second, accounting for 34% of global private investment (though, importantly, it is difficult to make a distinction between public and private investments in China, as much private funding flows to state-owned companies). The strength of the U.S. private fusion industry is not incidental, as it is a direct return on decades of federal investment that cannot be sustained without continued public commitment. 

Why Private Capital Alone is Insufficient 

Private capital alone cannot close the remaining science and technology gaps. The DOE's 2025 Fusion Science & Technology Roadmap identifies six key science and technology challenges that must be addressed: structural materials, plasma-facing components and plasma-material interactions, confinement approaches, the fuel cycle, and blankets and fusion plant engineering and system integration. While private investment excels at funding innovative reactor designs, it cannot build the expensive infrastructure that fusion deployment demands to close these gaps. These include critical testing and research facilities, electric grid modernization, specialized supply chains, and workforce training programs.  

Addressing these gaps will require coordinated public–private investment in fusion infrastructure to translate scientific milestones into reliable, grid-connected power. Shared capabilities—such as testing, component qualification, and system integration at scale—generate system-wide benefits and are unlikely to be developed at sufficient speed through private investment alone. 

The DOE published a roadmap in 2020, identifying the public infrastructure needed to support the private sector’s scaling of fusion. Industry experts note however that "China is building the very infrastructure plan that America envisioned, while we have so far failed to execute due to a lack of funding, authority structures, and coordinated leadership." The DOE's 2025 updated roadmap reaffirmed this goal, aiming to deliver the public infrastructure needed to support private-sector scale-up in the 2030s. Yet so far, this plan has not been matched by meaningful increases in federal investment. 

China’s state-driven approach, by contrast, allows sustained investment in capital-intensive, long-term infrastructure projects that private markets struggle to finance. Within a year and a half of the U.S. ignition achievement, China rapidly constructed Shenguang IV, a comparable laser facility that took the United States nearly twenty years to complete. Without federal investment to build the fusion ecosystem—infrastructure, supply chains, and a skilled workforce—even the most innovative private companies cannot scale their technologies to deployment. 

Government Support: China vs. the United States 

Between 2023 and 2025, China mobilized at least $6.5 billion in public funds toward fusion, with some experts estimating this figure to be as high as $13 billion. This is almost three times as much as the DOE Fusion Energy Sciences (FES) budget over the same period ($2.34 billion). Notably, only an estimated 1.2% of FES funding between 2020 and 2023 went toward fusion commercialization, undermining the United States’ ability to translate scientific breakthroughs into deployment. 

The FES budget for 2026 has been approved at $806 million, a 2% increase from 2025’s $790 million. While increased funding is a step in the right direction, industry experts suggest a one-time $10 billion increase in public investment to remain competitive with China. The DOE also recently established a new Office of Fusion, separate from the Office of Science, where FES is housed. However, funding levels for the new Office of Fusion have not yet been announced, and it remains unclear whether FES will remain separate within the Office of Science or be moved to the Office of Fusion, leaving major questions unresolved about future U.S. public investment into fusion and which office will control national research labs and facilities. This uncertainty risks delaying program execution and complicating long-term planning for both public and private stakeholders, particularly as China is rapidly increasing its investment in fusion energy, potentially undermining U.S. leadership at a critical moment. 

China is Catching Up 

Despite the U.S.’s advantages and scientific leadership, China is positioning itself to overtake the United States in fusion deployment. With over double the United States’ annual public investment and comprehensive deployment infrastructure already under construction, China is rapidly closing the gap between scientific achievement and commercial reality. China’s most recent 5-year plan for 2026-2030 clearly states that fusion energy is a strategic priority for the country. 

Although China has yet to achieve fusion ignition, their science is advancing quickly and, once ignition has been achieved, they may be better positioned to scale and commercialize the technology than the United States. China is developing tokamaks—experimental magnetic fusion devices used to demonstrate that controlled nuclear fusion is possible—much faster than the United States. While the United States only has two, China is already constructing its fourth, which is set to be operational in 2027. China also plans to build the first ever fusion-fission hybrid power plant with a goal of grid connection by 2030. Furthermore, China holds more patents for fusion energy technology and has 10 times as many PhDs graduates in fusion science and engineering than the United States. China has a pipeline of talents, infrastructure, and public investment necessary to not only lead in R&D, but also in commercialization if they are able to deploy fusion energy before the United States. 

This rapid growth and expansion may partly be a result of China copying U.S. designs. China’s fourth tokamak set to be complete in 2027, is reportedly a copy of Commonwealth Fusion System's tokamak and Chinese private fusion companies are copying patented designs by U.S. fusion company Helion. China is constructing a 100-acre fusion research and development campus called CRAFT, which was originally envisioned in a report by the U.S. Fusion Energy Sciences Advisory Committee in 2020. This pattern of China adapting innovation pioneered by other countries, scaling it with state resources, and then dominating the supply chain is not new. China executed the same strategy with solar panel technology and became the world’s leading manufacturing of solar panel technology after building upon U.S. and European technology. China is now applying the same strategy to fusion: subsidizing domestic companies, replicating foreign designs, and building the research and manufacturing infrastructure needed to dominate commercialization. If the United States does not match this ambition with sustained investment and coordinated policy, it risks ceding its first-mover advantage to a strategic competitor. 

The Implications of China Winning the Race to Fusion Deployment 

If China is the first to win the fusion commercialization and deployment race, it may dominate the supply chain, jobs, and economic growth created from fusion, which is estimated to be a $1 trillion market by 2050. This has been the case with other renewable energy technologies: While China leads the world in installed wind, solar, and hydropower capacity, it also holds a dominant position in manufacturing key components—such as solar panels, batteries, and rare earth processing—enabled by its control over critical mineral supply chains. These inputs are essential not only for clean energy but also for the defense-industrial base and a wide range of advanced technologies. If China achieves the same dominance in fusion—controlling not just the technology, but the ecosystem required to deploy it, from patented reactor designs and manufacturing plants to tacit knowledge and supply chains—this may render the United States dependent on a foreign adversary for the inputs needed to deploy a technology it pioneered. Additionally, China could use its advantage to deploy fusion in other countries as a part of its Belt and Road Initiative, garnering more economic and geopolitical power. 

Importantly, China's national priority to lead in clean energy is, in part, driven by vulnerability: the Chinese are the world's largest importer of oil, coal, and gas, as well as the world's largest consumer of energy. Energy independence through fusion would reduce one of China's strategic weaknesses while simultaneously establishing one of their greatest strategic strengths.  

Moreover, the artificial intelligence (AI) revolution is fundamentally constrained by access to electricity. Microsoft CEO Satya Nadella recently highlighted energy availability as a key bottleneck, noting that the company lacks sufficient power to operate its expanding fleet of GPUs. Fusion offers the prospect of abundant primary energy, but its value will ultimately depend on the ability to convert that energy into reliable, grid-scale electricity. If realized, fusion power systems could provide a stable, clean source of baseload electricity to support energy-intensive AI infrastructure such as data centers. If China wins the race to fusion deployment, they may have a strategic advantage in scaling AI, which may potentially lead to technological, industrial, and military advancements, exacerbating nearly every existing concern the U.S. has with China. 

Conclusion 

Unlocking fusion energy is not simply a technological milestone, but it is the foundation of energy security, economic competitiveness, and geopolitical power in the twenty-first century. Countries that can deploy fusion first will not only profit from it but will also possess the energy needed to power strategic technologies such as AI, quantum, advanced manufacturing, weapons systems, and biotechnology. Without sustained sources of energy, innovation cannot be scalable. The United States retains a critical advantage in scientific leadership and private investment, but that lead is narrowing as China invests aggressively in deployment infrastructure and ecosystem development.  

The Trump administration clearly recognizes these stakes with the Department of Energy’s new Genesis Mission and establishment of a dedicated Office of Fusion. But this prioritization must be matched by significant federal investment or else the United States risks surrendering a technology it pioneered to a strategic competitor. Private capital alone cannot build a future powered by fusion. Federal investment is needed to close the science and technology gaps and to deliver the long-term infrastructure, governance and regulatory frameworks, innovation hubs, and talent pipeline needed for commercialization and national security resilience.