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Expert voices: TDK Venture's Nicolas Sauvage on fusion

Photo illustration of President of TDK Ventures, Nicolas Sauvage with a pattern of TDK logos

TDK Ventures President Nicolas Sauvage. Photo illustration: Natalie Peeples/Axios. Photo courtesy of TDK Ventures

A century from now our civilization will wonder why we waited so long to invest in nuclear fusion, says TDK Ventures President Nicolas Sauvage.

Why it matters: The VC arm of Japanese electronics giant TDK is an active investor in climate tech, with $350 million assets under management across three funds and 38 portfolio companies.

Zoom in: The firm made its first investment in 2019 and has backed startups across sectors, including nuclear fusion upstart Type One Energy.

  • Sauvage says he's searching for "challenger technologies," which he describes as climate tech that's outside of the mature incumbent sectors of solar, wind and lithium-ion batteries.
  • TDK is investigating areas like industrial heat as well as more efficient forms of data center cooling, which Sauvage says will be important because of the exponential growth of data centers with AI.

This interview was lightly edited for clarity and length.

What in your opinion has been the biggest story in climate tech so far this month?

  • "Nuclear fusion.
  • Type One Energy announced it is converting a former coal plant in Clinton, Tennessee into a nuclear fusion prototype plant.
  • This is both meaningful and highly symbolic to see coal upgraded toward a continuous green energy supply."

What would you add to the narrative?

  • "We spend a lot of time thinking about 'challenger technologies' — ways to advance climate tech innovation in areas outside of incumbent solutions like solar and wind, often in counterintuitive ways.
  • Nuclear fusion and Type One Energy are a great example of a challenger technology."

By contrast, what do you think is going undernoticed in climate tech?

  • "The generative AI transformers need transformers on the electrical grid. So you need transformers for transformers."

What's one tip for either climate tech investors or founders?

  • "For investors, really do your deep explorations and build your conviction from first principles.
  • For the entrepreneurs, I think this is a time for them to consider building solutions for challenger technologies.
  • We don't need more engineers in solar, or wind."

Three fun things:

💼 First job:

  • "An engineering internship for Siemens using DSP Assembler code and working on surface acoustic waves.
  • It was all about sensing things with no power, so that you don't need batteries and electricity."

👑 Proudest investment:

  • "Type One Energy in nuclear fusion.
  • I'm very proud because of what it represents, but I'm also very proud for TDK which is a Japanese company, where nuclear has a stigma."

🤦🏻‍♂️ Facepalm investment or investment you wish you made:

  • "Two years ago, around AI, it was a pure software company.
  • Last month, we gave them a term sheet and it's not closed."

💡 In three-ish words, the change you would make to climate-tech investing:

  • "Patience and impatience."
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