Exclusive: Record fusion funding lands as Trump eyes cuts

Driving the news: The Energy Department's Advanced Research Projects Agency (known as ARPA-E) will commit $135 million over the next 18 months to accelerate the development of fusion energy technologies, according to details shared with Axios.

• The funding — the largest single fusion investment in the agency's history — will focus on tackling technical barriers that have kept fusion from reaching commercial scale.

The big picture: Fusion is still early in its development, and federal government support will likely be essential for it to ever commercialize.

• Big tech companies are also giving a boost to fusion as they race to build data centers, since the power source — if it scales — could provide continuous, carbon-free energy.

Yes, but: The ARPA-E announcement comes as President Trump's 2027 budget proposal seeks to cut the Energy Department's fusion energy sciences initiatives from $805 million to $755 million, according to Andrew Holland, the head of the Fusion Industry Association.

• "To have one bureau increasing funding while another is cutting is no way to beat China to commercial fusion," Holland said.
• The Chinese government is spending at least $6.5 billion on fusion, according to an analysis Holland has cited. That's compared to estimates of about $1 billion from the U.S. government.

Friction point: Conner Prochaska, director of ARPA-E, said that despite lower U.S. federal spending, those dollars help unlock private investment across startups and venture firms — enough to approach China's total.

• "I personally take our combination of capital, venture capital and investments from the private sector, along with government spending …versus that pure government spend in China any day of the week," Prochaska told Axios in an interview Tuesday.
• Prochaska declined to comment on the proposed cuts to other parts of the department's budget.

Context: The administration's budget would still need Congress' approval. The White House's Office of Management and Budget didn't immediately respond to a request for comment about the budget contrasts.

How it works: The mission of ARPA-E is to leverage private dollars with relatively smaller bets on riskier technologies.

• Speaking from the agency's conference this week in San Diego, Prochaska said the agency has spent $134 million on fusion over the past 12 years, which has unlocked $1.5 billion in private spending.
• With this new proposal of an additional $135 million, Prochaska says they're looking to accelerate different fusion technologies already under development.

What they're saying: "It's not an exaggeration to say that much of the growth in private fusion investment and ambition can be traced back to ARPA-E," Holland said.

• But the $135 million being announced Wednesday "is not nearly enough. We need the broader DOE to step forward."

The intrigue: The announcement also comes as Energy Secretary Chris Wright, who spoke at the conference Tuesday evening, appeared to show some skepticism about fusion's ability to scale in a podcast released Tuesday evening.

"I think we'll have, hopefully, a commercial pathway identified in the next five years," Wright said on the Katie Miller podcast, which is hosted by the wife of Stephen Miller, a top White House official.

• He went on to say that it could be 10 to 20 years until fusion is producing electricity for the grid.

The bottom line: "I went to work on it 40 years ago, and we thought it was 10 or 20 years away then," Wright said, So, he says, he "could be wrong."