Fusion power is returning to its national security roots. While the ultimate goal for fusion startups remains the delivery of clean electricity to the power grid, a growing number of companies are embracing defense applications that provided the original foundation for the industry.
This shift comes at a critical time for the sector. As venture capital dollars designated for climate technology have slowed, fusion startups are seeking alternative revenue streams to support their capital intensive research and development. The defense industry, facing new challenges in modern warfare, has emerged as a willing and well funded partner.
A Return to National Security Origins
The fusion industry was born decades ago from the science behind thermonuclear weapons. During the Cold War, physicists began looking for constructive ways to harness the immense energy released by atomic nuclei fusing together. While the public focus eventually shifted toward commercial power generation, the link to national security never truly disappeared.
In 2022, a major breakthrough occurred at the National Ignition Facility (NIF) when researchers achieved fusion ignition. While celebrated as a milestone for clean energy, the NIF has primarily supported national security applications for over a quarter of a century. Now, private startups are following a similar path, finding that their technology has immediate value for the military even before it is ready to power a city.
The Economic Drivers of the Defense Pivot
The pivot toward defense is driven largely by changes in the investment landscape. While fusion startups have historically captured a significant portion of climate tech funding, those venture dollars have recently stalled. Fusion is an notoriously expensive business, requiring billions of dollars in infrastructure and years of experimentation before reaching commercial viability.
For venture capitalists, defense contracts provide a stabilizing force. When portfolio companies secure government partnerships or investments from defense conglomerates, it reduces the financial burden on private investors and provides a clear use case for the technology in the near term.
Solving the Drone Mismatch with Laser Weapons
One of the primary interests the defense world has in fusion technology involves high powered lasers. Modern warfare has been reshaped by the proliferation of drones, creating a significant economic mismatch for traditional air defense systems.
In one notable instance approximately a decade ago, a United States ally used a $3 million Patriot missile to shoot down a consumer drone that cost only $200. While the target was destroyed, the cost ratio was unsustainable. Laser weapons offer a solution to this problem. Unlike a single use missile, a laser system can fire repeatedly and relatively cheaply, drawing its power from a ship reactor or a mobile generator.
Fusion startups specializing in laser based reactor designs are uniquely positioned to assist. Last week, Denver based Xcimer announced a partnership with RTX Ventures, the venture arm of the defense giant RTX (formerly Raytheon Technologies). Xcimer currently operates what it describes as the largest privately owned laser system in the world, known as Phoenix.
While Xcimer intends to use Phoenix to develop a commercial power plant where lasers compress fuel targets to release energy, the system is already powerful enough to interest defense contractors. The partnership allows RTX to explore how Xcimer’s laser technology can be adapted for defense purposes while providing the startup with essential capital.
High Energy Experiments and Nuclear Stewardship
Xcimer is not the only player entering the defense sphere. Pacific Fusion recently announced a memorandum of understanding with the National Nuclear Security Administration (NNSA). The two entities will collaborate on high energy density fusion experiments.
Pacific Fusion is currently constructing a demonstration facility in New Mexico, situated near the Los Alamos and Sandia National Laboratories. Although the facility is designed to prove that the company’s architecture can produce more power than it consumes, the physics involved have direct applications for the government.
The fusion reactions generated at the Pacific Fusion facility are expected to be significantly more powerful than those currently used by the government for nuclear weapons experiments. Keith LeChein, the co-founder and chief technical officer at Pacific Fusion, noted that the facility being built has clear utility for world leading defense applications.
This alignment was not accidental. Carrie von Muench, co-founder and chief operating officer at Pacific Fusion, stated that defense applications were always on the company's mind. LeChein himself brought deep expertise to the startup from his previous roles at Sandia National Laboratories, Lawrence Livermore National Laboratory, and the NNSA.
How the Technology Transitions
The transition from a fusion reactor component to a defense tool typically involves the underlying hardware rather than the full fusion process. For laser fusion companies, the "product" for the military is the laser itself: a system capable of delivering massive amounts of energy with extreme precision.
For other fusion approaches, the value lies in the high energy neutrons or X-rays produced during a reaction. These can be used to test the resilience of military hardware against radiation or to conduct "stockpile stewardship," which involves ensuring the safety and reliability of nuclear weapons without the need for live underground testing.
What Happens Next
The trend of "dual use" technology is likely to accelerate as more fusion startups reach the prototype stage. By positioning themselves as essential to both the energy transition and national security, these companies gain access to a broader pool of federal grants, specialized testing facilities, and long term contracts.
While some purists in the clean energy space may view the defense pivot with skepticism, the reality of the industry's high costs makes these partnerships almost inevitable. For the defense sector, the relationship offers a shortcut to next generation directed energy weapons. For the startups, it provides the runway needed to keep the lights on until they can finally put electrons on the civilian grid.
The question moving forward is how these startups will balance the classified requirements of defense work with the transparency often required in the scientific community and the commercial energy sector.
Filed under: TechNews, Startups, FusionPower, DefenseTech, Energy, CleanEnergy, VentureCapital