Commonwealth Fusion Systems Wins $85 Million CHIPS Act Award to Build Chips for Fusion Power Plants, With Washington Taking a Stake

The race to build commercial fusion power plants is increasingly becoming a race to build better chips. A day after Helion Energy announced federal funding for semiconductors, its rival Commonwealth Fusion Systems (CFS) has won its own award.

CFS will receive $85 million from the US Department of Commerce to develop advanced chips and power electronics for the fusion industry, TechCrunch reported on Friday, October 23. The money is a CHIPS Act award, and in exchange, the US government will take a stake in the company.

According to the company, the award will fund research, development and manufacturing capacity for US semiconductors used in fusion power plants.

Why fusion needs chips

Fusion power plants require sophisticated electronics to function. They must control powerful magnetic fields, heat fuel to temperatures hotter than the core of the sun, monitor and adjust the plasma in real time, and convert and manage huge amounts of electrical power.

"Ultimately, that means a more capable, economical power plant and a stronger U.S. supply chain to build it," CFS co-founder Brandon Sorbom wrote in a blog post. He said the funding would help improve the US chip and power electronics industries.

Five areas of work

The award supports five initiatives, four of which TechCrunch described.

The first is silicon carbide power electronics. Silicon carbide semiconductors handle high voltages efficiently and are used in electric vehicles, LED lighting, cell phone base stations and data centres. In CFS's machines, they will drive the superconducting magnets that confine the plasma.

The second is next-generation radio-frequency power generators, which are used to heat the fusion fuel to the extreme temperatures needed for fusion reactions.

The third is advanced electronics for faster reactor control, hardened against radiation to extend their lifespan and reduce operating costs. Fusion reactions produce intense neutron radiation, which can damage conventional electronics.

The fourth is adapting AI hardware, such as graphics processing units and tensor processing units, for use in power plants, where they could run control systems and monitoring.

The SPARC milestone

CFS, based in Massachusetts and spun out of the Massachusetts Institute of Technology, is one of the best-funded fusion startups in the world. It is building SPARC, a compact tokamak designed to demonstrate that fusion can produce more energy than it consumes. The company aims to switch on SPARC sometime next year, in 2027.

SPARC uses high-temperature superconducting magnets, a technology CFS has developed that allows tokamaks to be much smaller and cheaper than conventional designs such as the international ITER project in France. If SPARC succeeds, CFS plans to build ARC, a commercial power plant designed to deliver electricity to the grid. It has agreements with technology companies to buy power from future plants.

A single reactor demonstrating net energy would be a major scientific milestone. But commercial fleets of fusion plants would require durable power electronics and a robust supply chain, which is what the CHIPS award is intended to support.

A pattern of government stakes

The award continues a pattern in which the US government takes equity stakes in companies receiving support under industrial policy programmes. The Trump administration has taken stakes in companies including Intel and several critical minerals firms, arguing that taxpayers should share in the upside of public investment.

Critics argue that government ownership can distort markets and create conflicts of interest, while supporters say it ensures public funds deliver returns.

Helion's parallel move

The CFS award came a day after Helion Energy, which is building a different type of fusion machine in Washington State, announced a $175 million CHIPS Act award and $50 million in private investment to develop high-voltage pulsed semiconductors. Helion's chief executive said halving the power lost in these devices could double the output of its fusion system.

The parallel awards suggest the Commerce Department sees fusion as a strategic sector for US energy security and industrial competitiveness, and power electronics as a critical bottleneck.

Fusion and the AI power crunch

Interest in fusion has intensified as AI data centres drive up electricity demand. Technology companies are seeking clean, reliable power sources for decades to come, and fusion, if it works, could provide abundant carbon-free electricity without the long-lived radioactive waste of conventional nuclear power.

However, timelines remain uncertain. Fusion has long been described as decades away, and while private companies have made rapid progress, significant engineering challenges remain before fusion plants can deliver power commercially at scale.

What it means for India

India is a member of the ITER project and conducts fusion research at the Institute for Plasma Research in Gandhinagar. As India seeks to meet rapidly growing electricity demand while cutting emissions, advanced nuclear technologies are part of its long-term planning.

The emphasis on power electronics is also relevant to India, which is building a semiconductor industry and expanding its renewable energy, electric vehicle and grid infrastructure, all of which depend on power semiconductors such as silicon carbide. Indian companies and research institutions are beginning to invest in compound semiconductors, an area where global supply chains are concentrated in a few countries.

The CHIPS Act's expanding role

The CHIPS and Science Act, passed in 2022, allocated about $52 billion to rebuild US semiconductor manufacturing and research, with most of the funding going to large chipmakers such as Intel, TSMC, Samsung and Micron for new fabs. Its research and development programmes have since been used to support a wider range of technologies, including advanced packaging, power electronics and specialised chips.

The awards to fusion companies show how the programme is being directed towards strategic sectors where specialised semiconductors are a bottleneck, linking industrial policy for chips with energy policy.

What comes next

CFS's immediate focus is completing SPARC and switching it on in 2027. The semiconductor programme is a longer-term investment that could improve the economics of future commercial plants.

If SPARC achieves its goals, it would mark a turning point for fusion energy. The chips CFS is now developing could be part of what makes fusion power practical. The progress of both CFS and Helion over the next two years will be decisive for investor confidence in the fusion sector, which has attracted billions of dollars in private capital on the promise of transforming global energy supply. CFS has said it intends to share progress on SPARC as the machine nears operation, and the industry will be watching closely for evidence that the timetable is holding.