Yesterday, the Advanced Research Projects Agency-Energy (ARPA-E) announced its largest concentrated investment in fusion technology so far, committing $135 million over the next 18 months to fund projects that develop and commercialize fusion technologies.

The agency said it has invested approximately $134 million in commercial fusion since it began funding fusion projects with the launch of its ALPHA program in 2014, so the next year and a half will see a doubling of the agency's investment in the fusion space.

Funding will be spread over multiple programs, targeting fusion's toughest technical barriers. ARPA-E cited efficient, lower-cost plasma heating and driver systems, advanced fuels and novel fueling techniques, next-generation pulsed power and power conversion systems, and novel power plant designs and components as key focus areas, aiming to reduce plant costs, boost power output, simplify the fusion fuel cycle, decrease plant footprints, and improve the durability and economic competitiveness of power plant designs and components.

"The question is no longer whether fusion is possible. The question is how fast we get fusion-generated power on the grid and whether America leads that achievement," said ARPA-E director Conner Prochaska. "ARPA-E helped build America's fusion power industry by taking risks on radical ideas and building an innovative supply chain. Today's announcement is how we press our advantage. We are going after the hardest technical bottlenecks standing between fusion power and a commercially viable system, because that's what this moment demands."

Mixed messages: This announcement follows the White House's fiscal year 2027 budget proposal, which requests a $50 million (6 percent) cut in the Department of Energy Office of Science's fusion energy sciences initiatives budget.

"To have one bureau increasing funding while another is cutting is no way to beat China to commercial fusion," Andrew Holland, the head of the Fusion Industry Association, told Axios, referencing the at least $6.5 billion China is reported to be spending on fusion.

The budget also requests a $150 million (43 percent) cut in ARPA-E's overall budget, a $151 million (9 percent) cut in the DOE Office of Nuclear Energy's budget, and $10 million for the new Office of Fusion.

Attracting private investment: ARPA-E aims to support the development of unproven technologies that will go on to attract private investment. According to the agency, its investments have helped build the United States' "ecosystem of technology, talent, and supply chain capacity." Zap Energy, Realta Fusion, Thea Energy, and Type One Energy are among the fusion companies to have emerged from ARPA-E-funded projects. The agency said its fusion investments have attracted more than $1.5 billion in private follow-on funding.

"Private capital scales what it can already see; ARPA-E funds what the market can't yet price or predict," Prochaska told Latitude Media. "Venture capital funds companies to build a product, not to solve the fundamental science challenges needed to reach those milestones."

Recent funding: In 2024, ARPA-E launched the Creating Hardened And Durable Fusion First Wall Incorporating Centralized Knowledge (CHADWICK) program, which has awarded more than $25 million to 13 projects pursuing first-wall materials that will maintain performance over the 40-year design lifetime of a fusion power plant.