Nuclear fusion technology is an extremely 'hot' topic in the world of energy right now. Despite its inception as a physical experiment in the 1950s, the concept itself has both fascinated and taunted scientists ever since. The thesis is extremely simple and self-explanatory -- almost limitless power from relatively minimal fuel. Putting this into practice, however, is an entirely different story.
While nuclear fusion machines do exist, we have yet to figure out how to make them produce more energy than they actually use.
Enter, venture capital.
Now, with a renewed world focus on sustainable energy, there are at least 35 nuclear fusion companies globally that have raised private funding of over $2.3 billion collectively. Famous names from Big Tech have backed these ventures, with Bill Gates investing in Commonwealth Fusion Systems and Jeff Bezos involved in General Fusion to name but a few.
For the rest of us, however, directly investing in nuclear fusion is something we just simply can't do. None of the 35+ companies exploring the technology are public, and IPO's aren't to be expected for a number of years as they continue to grapple with proof-of-concept.
With that in mind, we decided to outline a couple of ways you could potentially expose yourself to nuclear fusion now despite none of the companies actually being public. To be clear though, investing in any industry this early is inherently risky. Make sure to consider your own risk tolerance before taking the proverbial plunge
Nuclear fusion needs fuel to operate. Typically, nuclear power makes use of materials such as uranium or plutonium. These atoms get split to create a tremendous amount of energy. Nuclear fusion, however, utilizes more widely available fuels such as deuterium and -- more importantly -- lithium.
We might not be able to actively invest in fusion companies yet, but we can definitely invest in companies that produce lithium. Companies such as Albemarle Corporation (NYSE: ALB) and Livent (NYSE: LTHM) are both established lithium producers who could have a lot to gain if nuclear fusion takes off in the coming decade.
Alongside the need for fuel, nuclear fusion will also require the construction, upkeep, and repair of extremely expensive reactors. Currently, public engineering companies such as Babcock International (LON: BAB) and SNC-Lavalin (TSE: SNC) have subsidiaries that are actively involved in creating nuclear fusion technology. While their exposure to the field is still relatively small, it could pave the way for bigger manufacturers to get involved in the future.
Many of the companies exploring nuclear fusion are optimistic they can create functional and productive reactors within the next couple of years. However, most also predict that commercialization of energy from nuclear fusion is unlikely to happen until the 2030s.
David Kirtley, CEO of nuclear fusion startup Helion, speculates that data centers will be some of the earliest adopters of the technology. This makes a lot of sense. Data centers require huge amounts of power, are typically situated away from large population hubs -- an important factor when placing a nuclear reactor -- and already have infrastructure that is designed to accept new generators.
The low-cost, high-power promise offered by nuclear fusion could see data giants like Verizon (NYSE: VE) or Amazon (NASDAQ: AMZN) massively improve both cost-efficiency and, therefore, revenue.
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