1 billion! The largest nuclear fusion financing at the beginning of the year has been born

Again, it's Shanghai. The investment community has learned exclusively that XH Fusion has officially completed a Series A financing of 1 billion yuan, led by Shanghai Guotou Company’s Shanghai Kechuang Group and Shanghai Future Industry Fund, with joint participation from CICC Capital, Shanghai Jiading Ke Investment Group, Bank of China Asset Management, Xichen Capital, Wuyuefeng Technology Innovation, Longge Technology, Feitu Venture Capital, Shandong Energy Shanghai Yanzhou Mining Assets, CIMC Environmental Technology, Shangrong Capital, Yuanhe Puhua, Shenwan Hongyuan, Binfu Capital, Zhenyi Asset, and other institutions and individuals. The lead investor from the Pre-A round, the intellectual property fund under Shanghai Kechuang Group, continues to follow up. Thus, the record for a single financing round for domestic private nuclear fusion companies has been refreshed again. Originating from Tsinghua University’s fusion laboratory, the helm of XH Fusion is held by two classmates—Chen Rui and Tan Yi. They embarked on their second entrepreneurial journey in 2021, leading a team into the controllable nuclear fusion track, rising to become a phenomenal name in the venture capital circle. Nuclear fusion, often regarded as "the ultimate energy for humanity," is part of a global energy revolution. Looking ahead, people are eagerly awaiting when the first kilowatt-hour of electricity can be generated through nuclear fusion. Tsinghua Classmates Join Forces for the Largest Nuclear Fusion Financing of the Year The story begins in a laboratory at Tsinghua University. Back to 1999, two post-80s individuals from Jiangxi and Hunan respectively entered Tsinghua University’s Department of Engineering Physics, becoming classmates—Chen Rui and Tan Yi. After graduating, Tan Yi continued to stay at the university to pursue a doctoral degree, deeply engaging in nuclear fusion research, later becoming an associate professor in the Department of Engineering Physics at Tsinghua University. Chen Rui went abroad for further studies and returned to teach in 2014, becoming a professor at the School of Finance at Central University of Finance and Economics. Their entrepreneurial journey actually began in 2016. At that time, overseas nuclear fusion startups were just emerging, and Chen Rui and Tan Yi believed they could transform nuclear fusion research results into greater social value. Thus, they teamed up with another Tsinghua classmate to establish ShuoCheng Technology, applying fusion-derived technologies to the industrial sector. It wasn't until 2021 that a turning point occurred—American nuclear fusion company Helion Energy announced it had heated plasma to 100 million degrees Celsius, while Commonwealth Fusion Systems (CFS) secured $1.8 billion in financing. This reignited the fervor for nuclear fusion in the venture capital circle. At this point, Chen Rui and Tan Yi felt the timing was right. With the experience gained from their first entrepreneurial venture, they had adequately prepared the commercialization technology route for nuclear fusion. After multiple evaluations, they officially established XH Fusion in October 2021, with Chen Rui serving as CEO and Tan Yi as Chief Scientist. Chen Rui recalled to the investment community that witnessing the financing frenzy for overseas nuclear fusion made them realize that this research required substantial capital to drive it forward; relying solely on laboratory funding would not yield disruptive results. "We were very clear that if we didn't make the decision to start a business, the opportunity would slip away in an instant." Xinghuan Fusion, with the fusion team from the Department of Engineering Physics at Tsinghua University as its core, has rapidly expanded its research team from over 10 people at its inception to more than 140 today, with over 70% holding master's or doctoral degrees. The technology route they adopt is based on compact repetitive reconnection controllable fusion technology using spherical tokamaks. Compared to traditional tokamak fusion reactors, this solution features a compact size and simple structure, significantly reducing the construction costs of fusion reactors. Specifically, this solution can be applied not only to large fusion power plants and distributed power stations but also has the potential for use in offshore/deep-sea operation platforms and large ship power systems, where high integration is required due to its compact and simple structure. Chen Rui has calculated a figure for the investment community, stating that based on Xinghuan Fusion's plan, the cost of the next-generation device achieving a Q value (energy gain coefficient) >1 is approximately 1.5 billion yuan, far lower than the cost of devices based on traditional large tokamak routes. However, Chen Rui also admitted that from the first day of its establishment, Xinghuan Fusion has faced various unknown challenges. "Because we are on a path that no one has walked before, we often do not anticipate the emergence of problems and can only rely on experience to locate issues and solve them from an engineering perspective." He clearly remembers that more than two years ago, when the current device of Xinghuan Fusion (the SUNIST-2 in collaboration with Tsinghua University) had just begun operation, there were normally 18 magnets connected in series. However, calculations of resistance showed that the results did not match. If measured and checked one by one using standard methods, the device would need to be disassembled, delaying the project by at least ten days. Ultimately, the team identified the specific location of the short circuit through clever physical methods, discovering that the cause of the short circuit was a piece of indium the size of a fingernail that had fallen in during soldering. Today, Xinghuan Fusion's self-sustaining capabilities are becoming increasingly evident. According to Chen Rui, Xinghuan Fusion has developed and improved a large number of technologies related to the peripheral systems of fusion reactors, with productization as the delivery requirement for various internal projects, actively promoting the transformation of technological achievements into commercial products. Currently, a complete series of signal conditioning products has been formed, including high-bandwidth isolation amplifiers and analog integrators; the superconducting acquisition instrument (EPIC) and single-channel acquisition device (CoaxLink Nano) support precise testing and flexible deployment in extreme multi-physical fields, laying a reliable data foundation for digital fusion reactors and AI control; the axial magnet pulse power supply and general pulse power supply module (IVCube) together constitute a complete pulse power solution, supporting batch deployment and complex control, providing cost-effective power support for fusion devices; the self-developed in-situ surface analysis system (LIBS) and electrostatic probe drive system not only support fusion research but have also gained widespread attention and achieved multiple collaborations in fields such as nuclear power, aerospace, and high-energy physics; the full technology stack capability of high-temperature superconducting magnets has overflowed, leading to multiple development and processing agreements with clients Regarding the planning of XH Fusion, Chen Rui stated that the engineering validation will be completely completed around 2028, the construction of a commercial demonstration reactor will be initiated, and a fusion reaction demonstration reactor capable of outputting electrical energy will be built around 2032. Currently, this hardcore team is continuously moving towards this goal. As Tan Yi previously called for, fusion researchers should not wait for all conditions to mature but should bravely take practical steps. "All children start learning to walk when their muscles are not strong and their balance is not stable. The same goes for fusion; we need to solve problems through iteration and accumulate experience during construction." VC/PE Gathering: Shanghai State-owned Assets Heavily Invests The gradually emerging XH Fusion has quickly entered the sight of investors. In June 2022, XH Fusion announced that it had obtained hundreds of millions in angel round financing, with investments from multiple institutions including Shunwei Capital, Kunlun Capital, Zhongke Chuangxing, Yuanjing Venture Capital, Heyu Capital, Sequoia Seed Fund, Xianfeng Changqing, Jiuhua Venture Capital, Lenovo Star, Inno Angel Fund, Yuanhe Origin Point, and Huafang Capital. Recalling the first financing, Chen Rui stated that although "the beginning is always difficult," the angel round financing process was relatively smooth. "From the initial contact with investors to completing the angel round financing, the process included the Spring Festival, and it actually took five months." He recalled that although XH Fusion was still a startup at that time, the team had rich R&D experience, and the company's valuation was relatively pragmatic, which won the recognition of investors; at the same time, XH Fusion happened to benefit from the industry heat brought by the large financing of the U.S. CFS, providing investors with a reference investment case. Among them, Zhongke Chuangxing's investment in XH Fusion left a deep impression on the outside world. Chen Rui clearly remembers that on a day in March 2022, at Zhongke Chuangxing's Beijing office, he met with Zhongke Chuangxing's founding partner Mi Lei. "Dr. Mi told me that he had wanted to invest in a controllable nuclear fusion company for a long time, and after researching the upstream and downstream of the industry chain for a long time, he finally locked onto us, which made me feel a strong sense of trust." Thus, after only one meeting, Zhongke Chuangxing became one of XH Fusion's angel investors and further invested in the Pre-A round. In this regard, Mi Lei also expressed to the investment community that Zhongke Chuangxing's continuous investment is not only due to its optimism about the technology concept and rarity but also a strategic choice for Zhongke Chuangxing to layout the "future energy" landscape in the hard technology ecosystem. "The rapid iteration of XH Fusion—from the principle verification of '0 to 1' to the construction of the future CTRFR-1 device—validates my idea that 'hard technology requires patient capital but also needs rapid engineering iteration.'" However, Chen Rui candidly stated that every subsequent round of financing for XH Fusion is more challenging than the angel round. As the company develops over time, investors will begin to scrutinize XH Fusion's initial plans, and expectations will become increasingly high. "What we can do is to continuously fulfill our commitments and break doubts with actual progress." Then, in March 2024, XH Fusion completed hundreds of millions in Pre-A round financing. This round of financing was led by the Shanghai Intellectual Property Fund, with Huacheng Venture Capital participating, and existing shareholders Zhongke Chuangxing and Heyu Capital continuing to invest Until this round A financing came to light, the industry witnessed a landmark moment—setting a record for the largest single financing amount for private nuclear fusion enterprises in China. As one of the leading investors in this round, Shanghai Science and Technology Innovation Group stated that the group has long focused on investments in hard technology and future industries. Following its lead investment in the intellectual property fund for Star Ring Fusion Energy in 2024, the group has once again taken the lead in this round and promoted its establishment in Shanghai. Throughout this process, it has witnessed Star Ring Fusion Energy gradually grow into a leading enterprise in the field of controllable fusion in China, with full-stack independent research and development, engineering implementation, and rapid iteration capabilities. This further solidifies its determination to support the company in overcoming the technical challenges of "artificial sun" technology. "In the future, Shanghai Science and Technology Innovation Group will fully leverage the empowering advantages of 'patient capital + long-term capital + strategic capital' and its industrial synergy capabilities, working hand in hand with Star Ring Fusion Energy and industry chain partners to accelerate the transition of fusion energy from 'scientific experiments' to 'commercial applications,' jointly making Shanghai a global hub for advanced energy industries." CICC Capital, the investment entity of CICC SAIC Fund, also expressed strong optimism about controllable nuclear fusion as a trillion-level track for the country's "14th Five-Year Plan" strategic emerging industries. "Star Ring Fusion Energy, with its outstanding technological advantages in the high-temperature superconducting strong magnetic spherical tokamak technology route, relies on Tsinghua University's well-established research and development team in the field of nuclear fusion, which has accumulated over twenty years of experience, successfully built and verified multiple fusion experimental devices, with core indicators reaching domestic leading and international advanced levels." As the investment platform for science and technology innovation in Jiading District, Shanghai Jiading Science and Technology Investment Group is investing around Jiading's "3+3+1" key industries, with the future energy industry being one of its key focus areas. In their view, the Star Ring Fusion Energy team has demonstrated profound technical accumulation, a clear engineering path, and strong execution capabilities in the field of controllable nuclear fusion, gradually becoming a leading enterprise in the commercialization track of fusion in China. "Currently, Jiading District is striving to build a 'Fusion Town,' and the establishment of Star Ring Fusion Energy is a key move in constructing our industrial ecosystem. In the future, we will continue to support and serve enterprises to accelerate technological breakthroughs and the industrialization process." With this new round of financing led by Shanghai State-owned Assets, it also marks the formal integration of Star Ring Fusion Energy into Shanghai's future industrial layout. It is understood that Star Ring Fusion Energy has reached an important strategic cooperation with the Jiading District government of Shanghai to jointly promote the research and development and industrialization process of the CTRFR-1 fusion device. According to the agreement, the company will establish a research and development center and experimental base in Jiading, focusing on the engineering verification of fusion technology and promoting breakthroughs in core technologies such as high-temperature superconducting magnets and plasma control. In Chen Rui's view, this cooperation will fully leverage the advantages of government-enterprise collaboration: the Jiading District government will provide comprehensive support in terms of land, funding, talent, and policies; Star Ring Fusion Energy will rely on its technological advantages to actively play the role of "chain master" in the industry chain, uniting upstream and downstream enterprises to build a fusion energy industrial cluster. Undoubtedly, a hard-core engine has been added to Shanghai's nuclear fusion landscape. Humanity's Ultimate Energy: Nuclear Fusion on the Eve of Commercialization A similar scene is frequently unfolding in Shanghai As of today, this place has risen to become a major hub for the nuclear fusion industry, and there is even a saying in the industry: for companies working on nuclear fusion devices, the first choice for financing success is Shanghai. The reason it is the first choice is that Shanghai has the most complete and comprehensive nuclear power industry chain in the country, covering nearly 200 nuclear-related enterprises. Among them are leading companies such as Shanghai Electric Nuclear Power Group, and in recent years, star companies in the industry chain like Shanghai Superconductor and Energy Singularity have emerged. At the same time, on the research side, Fudan University, Shanghai Jiao Tong University, and the Shanghai Institute of Optics and Fine Mechanics of the Chinese Academy of Sciences, which are located in Shanghai, host multiple fusion research and development teams. One of the most impressive scenes was the establishment conference of China Fusion Energy Co., Ltd. held in Shanghai last July. Seven investors emerged behind it—China National Nuclear Corporation, China National Power, China Petroleum Kunlun Capital, Shanghai Fusion, National Green Fund, Zhejiang Energy Power, and Sichuan Fusion—announcing a joint investment of approximately 11.492 billion yuan, making it the largest financing in Shanghai last year. In March 2024, multiple departments in Shanghai jointly issued the "Shanghai Nuclear Power Industry High-Quality Development Action Plan (2024-2027)," proposing that by 2027, the scale of Shanghai's nuclear power industry will reach 60 billion yuan, essentially establishing a world-class nuclear power industry center and promoting the "Shanghai Nuclear Power" brand. At the same time, the plan also clearly states the need to "carry out experimental physics, core technology, and key equipment research and development for magnetic-inertial confinement fusion energy systems, and build an internationally advanced fusion energy center." So, how powerful is nuclear fusion, known as the "artificial sun"? There is a vivid example—one cup of D2O (heavy water) can produce 9 million kilowatt-hours of clean electricity through nuclear fusion, enough energy to power a household for 865 years. "Controlled nuclear fusion's significance for humanity can be equated to that of fire for primitive humans (even higher)," said Xianfeng in an article. "Because once successful, it means humanity will have access to almost unlimited clean energy—prices for food, water, and all industrial products that rely on energy will drop to negligible levels." Many investors believe that controlled nuclear fusion will be humanity's ultimate energy source. This argument has become even more urgent following the explosion of artificial intelligence. The training of AI large models requires a massive amount of energy, and nuclear fusion is precisely the breakthrough to solve this problem. OpenAI founder Sam Altman is a proponent of this view, having mentioned nuclear fusion multiple times in public, believing that AI and nuclear energy are closely linked. At this moment, the strategic significance of nuclear fusion is self-evident. Investors unanimously mention a viewpoint: whoever can lead the new round of "energy revolution" in the future may dominate the future economic paradigm and international rules. As Mi Lei, founding partner of Zhongke Chuangxing, has repeatedly stated, the ultimate energy "controlled nuclear fusion" will become the "trump card" for industry and national competition, potentially surpassing the historical contribution of the "steam engine." Now, the dream of commercializing nuclear fusion is also becoming a reality. The "2025 Global Fusion Industry Report" predicts that between 2030 and 2035, more than 35 companies will establish commercial fusion demonstration power plants capable of producing net energy, and another 28 companies plan to connect to the power grid during this period A milestone has appeared. The commercial fusion power plant of Helion Energy in the United States has begun construction in Washington State in 2025, and is planned to supply power to Microsoft data centers starting in 2028. At the same time, at the beginning of last year, the company announced the completion of a new round of financing of $425 million, with a valuation of $5.4 billion. On the other side of the ocean, nuclear fusion is also bursting with "Chinese speed"—recently, the research team from the Institute of Plasma Physics of the Hefei Institutes of Physical Science, Chinese Academy of Sciences announced that the experimental device known as the "artificial sun," the fully superconducting tokamak nuclear fusion experimental device (EAST), has confirmed the existence of the density-free zone in the tokamak and found a method to break through the density limit, providing important physical evidence for the high-density operation of magnetic confinement nuclear fusion devices. I still remember that Soviet physicist Lev Artsimovich, one of the inventors of the tokamak device, once said: "When society needs nuclear fusion, nuclear fusion will be ready." Perhaps, humanity is not far from the day of "creating the sun." Risk Warning and Disclaimer The market has risks, and investment requires caution. 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