Last week, Microsoft made the unlikeliest bet – the tech giant has signed on the dotted line to purchase electricity from a nuclear fusion generator. The company, Helion Energy announced an agreement with Microsoft with the goal to generate at least 50 megawatts of power by 2028 with a one-year ramp-up period. Helion is liable to pay a penalty if it fails to stick to these terms. The deal will entail the world’s first commercial fusion generator connected to a power grid in Washington. 

Why did Microsoft sign Helion?

If you’re wondering why a big-tech company has latched itself to a nascent source of energy – in November 2021, Helion raised USD 2.2 billion in funding in a round led by Sam Altman among others like Facebook Dustin Moskovitz, Peter Thiel’s Mithril Capital and sustainable tech VC, Capricorn Investment Group. Of this chunk, Altman has put in USD 375 million himself. 

According to The Wall Street Journal, Altman is actively involved in Helion’s operations and visits the company once a month to help execs decide what to work on efficiently as well as hiring and sifting through talent. 

Altman’s interest in Helion isn’t brand new. In 2014, during his tenure as the YC president, Altman expressed his intent to put more money into hard tech and clean energy companies eventually going on to accept Helion into his cohort. 

Observing YC’s rule to commercialise quickly, Helion then stated that its goal was to create net energy gain from nuclear fusion within an incredible span of three years. (At this point in time, experts still believed that the possibility of the nuclear fusion dream was still 30 to 50 years away) 

“We are optimistic that fusion energy can be an important technology to help the world transition to clean energy. Helion’s announcement supports our own long-term clean energy goals and will advance the market to establish a new, efficient method for bringing more clean energy to the grid, faster,” Brad Smith, vice chair and president at Microsoft said. 

Smith went on to describe the interrelation between fusion energy, AI and quantum computing. As the demands for larger amounts of energy and compute requirements for AI escalate, Smith believes fusion could be the way out in the future. “As a purchaser, when we lean in at the right moment in the right way, we can help make new markets,” he said. 

What is the ground reality at Helion? 

But for all that we know, the goal is still at a fair distance despite gaining ground. 

Last December, a team of physicists at the National Ignition Facility (NIF) in California claimed an important breakthrough – it had managed to generate more energy from a controlled nuclear fusion reaction than what had been used to trigger it. 

In a recent piece by Scientific American, Omar Hurricane, a program leader at the Lawrence Livermore National Laboratory, which houses the NIF team, spoke about the current stage that nuclear fusion stood at. “I do think fusion looks a lot more plausible now than it did 10 years ago as a future energy source. But it’s not going to be viable in the next 10 to 20 years, so we need other solutions,” he stated. 

How far has Helion gotten in comparison? 

The company aims to become the world’s first nuclear fusion plant by using a method that differs from its competition. The company claims that this cuts down the risk of radiation while increasing efficiency. This is also why other fusion power station experiments like International Thermonuclear Experimental Reactor or ITER (the largest fusion project in the world) cost more than USD 50 billion while Helion’s reactors are much more compact and run at less than tens of millions. 

It is also one of the faster-growing companies in this space, having created seven prototypes in less than 10 years. 

In July 2021, Helion announced that its sixth fusion generator prototype had exceeded 100 million degrees Celsius, which is the temperature a commercial reactor would normally operate at. But despite these pluses, Helion hasn’t wound up generating any energy in reality. It is a stretch to imagine that Helion will end up generating 50 megawatts of power within the next five years. But Altman’s push for forward-looking sectors and given what he’s done with OpenAI gives him more than some legroom. 

But overall, it must be noted that Microsoft’s agreement for 50 megawatts is a small and reasonable one. Since last year, Microsoft has announced several deals for 1.2 gigawatts of clean power, as reported by BloombergNEF showing a redirection towards renewable sources of energy.