DOE's Fusion Bet Is Working: $46 Million in Federal Seed Money Has Unlocked $350 Million in Private Capital

In 2010, NASA spent $396 million through its Commercial Orbital Transportation Services (COTS) program to help two companies — SpaceX and Orbital Sciences — develop cargo delivery vehicles for the International Space Station. The agency paid only when companies hit verified technical milestones. The private sector matched and exceeded the federal investment. Within a decade, the United States had recaptured the commercial launch market and SpaceX had become the most prolific rocket company in history.

The Department of Energy is now running the same playbook for fusion energy — and the early returns are remarkably similar. Since May 2023, eight companies in DOE's Milestone-Based Fusion Development Program have collectively raised more than $350 million in private capital, leveraging an initial federal commitment of just $46 million. Three companies have already completed early critical-path science and technology milestones verified by DOE. The rest are working toward theirs.

"Fusion power holds the promise of limitless, reliable, American-made energy," Secretary of Energy Chris Wright said in September 2025, "and programs like INFUSE and FIRE ensure our innovators have the tools, talent, and partnerships to make it a reality."

For researchers, small businesses, and national laboratory scientists working in fusion-adjacent fields — advanced materials, superconducting magnets, plasma diagnostics, tritium handling, AI-enabled simulation — the DOE's three-pronged commercialization strategy represents the deepest pipeline of fundable opportunities in the history of American fusion energy.

Three Programs, One Pipeline

DOE's Fusion Energy Sciences (FES) program in the Office of Science runs three distinct but interconnected programs that together form a commercialization pipeline. Understanding how they fit together is essential for anyone positioning to capture fusion funding.

The Milestone-Based Fusion Development Program is the flagship. Authorized by the Energy Act of 2020 and expanded by the CHIPS and Science Act of 2022, the program has $415 million in Congressional authorization through fiscal year 2027. It operates on a simple principle borrowed from NASA COTS: private fusion companies propose technical milestones on the path to a pilot plant, provide more than 50% of total project funding from private sources, and receive federal payments only after DOE independently verifies that each milestone has been achieved.

Eight companies were selected in May 2023: Commonwealth Fusion Systems, Focused Energy, Realta Fusion, Thea Energy, Tokamak Energy, Type One Energy, Xcimer Energy, and Zap Energy. Each submitted a pre-conceptual design and technology roadmap for a fusion pilot plant — documents that collectively represent the most detailed commercial fusion engineering plans ever produced with federal support.

The FIRE Collaboratives (Fusion Innovative Research Engine) provide the scientific infrastructure that the milestone companies need but cannot build alone. Across two rounds — $107 million announced in January 2025 for six teams and $128 million in September 2025 for seven more — DOE has committed approximately $220 million to create virtual, centrally managed research teams that bridge FES's foundational research with the fusion industry's engineering needs.

The FIRE teams are based at national laboratories and universities: Idaho National Laboratory (nuclear blanket testing), MIT (materials testing and advanced simulation), University of Tennessee–Knoxville (materials development), Savannah River National Laboratory (fusion fuel-cycle testing), and others. They provide capabilities — neutron irradiation facilities, tritium handling expertise, plasma diagnostics — that no private company can economically replicate.

INFUSE (Innovation Network for Fusion Energy) is the fastest, most accessible entry point. With $6.1 million for 20 projects in the most recent round, INFUSE provides awards of $100,000 to $500,000 for collaborative projects between private fusion companies and national laboratories or universities. Since its launch, INFUSE has funded 91 projects totaling $19.5 million in in-kind support. The award size is small, but the program solves a critical problem: private companies get access to national laboratory facilities and expertise, while public-sector researchers get to work on problems with commercial urgency.

Which Milestones Have Been Completed — and What They Mean

Three of the eight milestone companies have completed early critical-path milestones, verified by DOE:

Focused Energy completed milestones in high-gain target computational modeling and ion-beam focusing demonstration. Focused Energy pursues inertial fusion — compressing fuel pellets with particle beams rather than confining plasma in magnetic fields. Their milestones demonstrate that the physics of their approach works at the computational and component level.

Realta Fusion completed whole-device modeling of tandem-mirror equilibria showing five-times scientific energy gain. Tandem mirrors are a magnetic confinement concept that has been largely out of fashion since the 1980s but offers potential advantages in simplicity and cost. Realta's milestone proves their updated design can, in simulation, achieve energy gain — a prerequisite for any commercial power plant.

Thea Energy completed stellarator equilibria optimization and high-temperature superconducting (HTS) magnet coil engineering milestones. Stellarators are the magnetic fusion concept that physicists most widely agree will eventually work but that has historically been considered too complex to engineer economically. Thea Energy's milestones demonstrate that modern optimization algorithms and HTS magnets can close the engineering gap.

The remaining five companies — Commonwealth Fusion Systems, Tokamak Energy, Type One Energy, Xcimer Energy, and Zap Energy — are working toward their early milestones. CFS, which has raised more private capital than any other fusion company, is building SPARC, a compact tokamak designed to achieve net energy gain for the first time.

The 7:1 Ratio and Why It Matters

The most striking number in the entire DOE fusion portfolio is the private capital leverage ratio. Against $46 million in initial federal commitments, milestone awardees have raised more than $350 million in private funding — a ratio of roughly 7.5 to 1. The broader fusion industry has attracted approximately $7.1 billion in total private investment by calendar year 2024, with 25 of the 45 known fusion companies headquartered in the United States.

This ratio vindicates the milestone model's core thesis: federal money doesn't need to fund the entire cost of developing fusion energy. It needs to de-risk specific technical questions enough that private capital flows in to fund the rest. The milestone structure — where companies pay more than half the cost and receive federal money only on verified completion — selects for companies with genuine commercial potential and strong investor backing.

Compare this to the traditional grant-funded approach to fusion research. DOE's FES program has an annual budget of approximately $806 million in FY2026, but a GAO analysis found that only about 1.2% of that budget — roughly $36 million over four years — went directly toward commercialization activities between FY2020 and FY2023. The remaining 98.8% supported basic research, international collaboration (including the U.S. contribution to ITER), and facility maintenance. The milestone program flipped this dynamic by making commercial readiness the explicit objective.

Where the Gaps Are — and What the GAO Found

The GAO's 2025 report on fusion energy commercialization praised DOE's initiative but identified significant planning gaps. The agency's fusion energy strategy documents "lack specific timelines and metrics for responding to identified commercialization risks." The interagency Net-Zero Game Changers working group — which was supposed to coordinate fusion commercialization across DOE, NRC, and other agencies — became inactive with an unclear future.

Key technology challenges remain at low readiness levels. Tritium breeding blankets — the systems that would produce the fuel for deuterium-tritium fusion reactors from lithium — have never been demonstrated at the scale a commercial plant would require. This is precisely the kind of problem FIRE Collaboratives were designed to address: Savannah River National Laboratory's fuel-cycle testing capabilities and Idaho National Laboratory's nuclear blanket testing program are directly targeted at closing the tritium gap.

Workforce shortages pose another risk. The fusion industry needs scientists and engineers with expertise in plasma physics, nuclear engineering, high-field magnets, materials science, and tritium handling — fields where the training pipeline has been underfunded for decades.

INFUSE: The Entry Point for Small Businesses and University Labs

For researchers who don't have a fusion company to partner with or a national laboratory appointment, INFUSE is the most accessible funding pathway. The program operates through competitive peer review managed by Oak Ridge National Laboratory and Princeton Plasma Physics Laboratory.

Recent INFUSE awards have funded projects in materials science, laser technology development, high-temperature superconducting magnet assessment, and artificial intelligence for fusion modeling and simulation. If your research has applications to fusion — even if fusion isn't your primary field — INFUSE is designed for you. A materials scientist studying radiation-tolerant ceramics, a computational physicist developing plasma turbulence simulations, or an electrical engineer working on pulsed power systems could all find an INFUSE match.

Awards range from $100,000 to $500,000 per project. The funding covers collaboration costs — travel, materials, facility access time — rather than building new capabilities from scratch.

The Timeline to a Pilot Plant

The most aggressive milestone awardees are targeting preliminary design reviews for fusion pilot plants in the late 2020s, with aspirational timelines for operating pilot plants in the mid-2030s. These timelines depend on solving the tritium breeding, materials degradation, and plasma control challenges that FIRE Collaboratives are funded to address.

For context: ITER, the international fusion megaproject in southern France, is now estimating first operations in 2034. Several U.S. milestone companies believe they can beat that timeline with smaller, more innovative designs enabled by high-temperature superconducting magnets — technology that didn't exist when ITER was designed.

Congressional authorization for the milestone program runs through FY2027. Whether the program receives full appropriations — and whether DOE opens additional milestone rounds for new companies — will depend on the demonstrated success of the current eight awardees. Every completed milestone strengthens the case for continued funding.

How to Position for Fusion Funding

The fusion funding landscape has three tiers, each with different entry requirements:

Tier 1: Milestone Program. If you're a fusion company with private investor backing, proprietary technology, and a credible path to a pilot plant, watch for potential future milestone rounds. The current authorization supports additional selectees.

Tier 2: FIRE Collaboratives. If you're a national laboratory or university with fusion-relevant facilities and expertise, the next FIRE solicitation is the target. Teams are virtual and centrally managed — you don't need to build a new center, just contribute specialized capabilities to the collaborative.

Tier 3: INFUSE. If you're a small business, university lab, or individual PI with research that has fusion applications — materials, magnets, diagnostics, AI, power electronics — INFUSE is your entry point. Awards are small but they connect you to the national laboratory network and the private fusion companies that are increasingly driving the field.

All three programs are complementary to ARPA-E's separate $135 million fusion investment, which funds higher-risk, earlier-stage research through programs like CHADWICK (first-wall materials) and IGNIITE (early-career energy innovators).

For tracking solicitations across the DOE fusion portfolio and identifying which opportunities match your capabilities, Granted can help you navigate the landscape before the next FIRE or INFUSE round opens.