The US Department of Commerce has announced up to $260 million in proposed funding for fusion energy startups Helion and Commonwealth Fusion Systems (CFS), with both companies agreeing to provide the federal government with nonvoting equity stakes. The agreements, announced on October 22, 2026, will support semiconductor research and development for commercial fusion reactors under the CHIPS and Science Act.
According to the Department of Commerce’s official announcement, Helion is eligible for up to $175 million, while CFS could receive $85 million. The companies have signed letters of intent, with funding and government ownership subject to final agreements.
Fusion Companies Agree to Government Equity Ownership
Helion will use its proposed award to develop high-voltage semiconductors and advanced power modules that control electricity flowing through its fusion generators. The project also includes domestic semiconductor manufacturing and advanced packaging research, supported by an additional $50 million in private investment.
Under Helion’s agreement, the government would receive $175 million in nonvoting equity based on the company’s latest Series G valuation of $15.5 billion. The proposed investment represents approximately 1% ownership.
CFS will direct its $85 million award toward semiconductors for plasma heating, power electronics, reactor diagnostics and radiation-resistant systems. The government’s nonvoting stake will be calculated using CFS’s latest valuation, which has not been publicly disclosed.
Federal Funding Introduces New Ownership Conditions
Traditional federal research grants have generally provided companies with funding without reducing existing shareholders’ ownership percentages. The Trump administration has increasingly adopted arrangements that allow taxpayers to participate financially in companies receiving government investments.
Similar agreements have involved Intel, MP Materials and USA Rare Earth, which granted the federal government ownership stakes in exchange for financial support. Intel’s arrangement converted previously approved semiconductor funding into an approximately 10% government stake.
However, equity participation is not universal across the fusion industry. Thea Energy, Avalanche Energy, Pacific Fusion and Inertia Enterprises have confirmed that their federal partnerships do not involve government ownership.
Fusion Industry Seeks Additional Federal Investment
Private investors have committed more than $14 billion to fusion startups, including approximately $4 billion raised by CFS and $3.2 billion in committed capital secured by Helion. Despite those investments, the Fusion Industry Association has called for a $10 billion federal funding package, including $5.4 billion for fusion companies.
The association argues that additional investment is necessary to support domestic research infrastructure and competition with government-backed fusion programs in other countries. Earlier federal initiatives, including the Department of Energy’s Milestone-Based Fusion Development Program, distributed less than $50 million during their initial years.
Germany-based Proxima Fusion has also received equity investment from government-backed funds, including SPRIND and Deutsche Climate Tech Fonds. In the United States, the proposed Helion and CFS agreements would give the federal government financial ownership without voting control over either company’s operations.
Featured image credits: Magnific.com
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