Altman, Bezos, Gates Bet on Nuclear Fusion

TECH IN THE NEWS

$100b Valuation! - OpenAI is in talks led by Thrive Capital to raise billions at a valuation up from its current $86b. Thrive alone will invest $1b. Apple, Microsoft, and Nvidia are reportedly discussing investing.

EV Transition - The government just awarded another $521M out of its $7.5b program to build out fast chargers along interstate highways.

Choppy Seas - The SEC sent a Wells Notice to OpenSea, informing the NFT marketplace it is under investigation for securities violations.

Gulp! - Yelp has sued Google for antitrust violations alleging the search giant’s unfair search market practices favored Google’s reviews business.

Great Expectations - Nvidia reported 122% y-o-y revenue growth, and confirmed its next-gen chip delay, but failed to meet investor expectations.

AI Safety Bill - California’s AI bill passed its state assembly vote 46 to 11 on Wednesday despite objections from business groups and lawmakers.

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THE HOTTEST THING IN TECH
Nuclear Fusion Limitless Power

Part Two of a series on investing in Nuclear Energy (Part 1: Fission here)

There are no nuclear fusion power plants in commercial operation, but the technology is rapidly advancing towards commercial viability. Optimistic estimates put the fusion energy market at $40b p/a by 2030, or at hundreds of billions to trillions by 2050. Such estimates are inherently speculative as despite various breakthroughs, fusion remains impractical for generating power at scale. The timeline is hard to predict but most put it at 4 - 10 years.

Creating an Artificial Sun

Fusion is the process that powers stars. Small and abundant atoms are combined together, generating heat that can be harnessed for electricity. Unlike fission it produces little radiation, making it safer, and it doesn’t require rare and dangerous elements like uranium and plutonium. Instead, it uses light elements like hydrogen isotopes deuterium and tritium (from seawater) or helium-3 (which can be mined on the Moon). The radioactive waste produced is far less long-lived and there is no meltdown risk. Major engineering challenges remain but advances are coming at a rapid rate.

Fusion Tech to Watch

In December 2022, US researchers successfully achieved a fusion reaction. This led to a surge in funding into startups aiming to commodify the process. Since then other breakthroughs include some in the last few weeks. These discoveries are all confined to research labs rather than companies for now:

• UK scientists set a record for most fusion energy produced

• A record for high-temp superconductor Magnet strength

• A novel X-ray imaging technique for nanofoam fusion materials

• China’s EAST reactor set a world record for sustaining plasma 

Promising Fusion Startups

A number of recent startup raises are bringing these advances to market.

• Sam Altman led Helion’s $500M 2023 Series E with a $375M stake (his largest startup deal ever). Helion targets net+ electricity by ‘24 and has a deal to power Microsoft’s data centers by ‘28.

• Zap Energy is raising $130M to advance its “simpler” approach to fusion tech and is exploring a repurposed Washington plant.

• Canada’s General Fusion raised $15M this month to develop its demo device and is targeting scientific breakeven by 2026.

• Denver fusion startup Xcimer raised a $100M Series A led by Ian Osborne’s firm Hedosophia for its high-energy laser fusion system.

• Breakthrough, Tiger Global & Jeff Bezos backed Commonwealth Fusion, an MIT spinoff pursuing major US fusion pilot plants.

• California’s TAE secured a $7b valuation at Series G in 2023 and has raised $1.3B to date for fusion and direct air carbon capture tech.

• Laser Uranium Enrichment startup LIS just closed an $11.9M seed.

Technology and Synergistic Sectors to Watch

As we can glean from the above, areas for tech innovation to watch include:

• superconducting magnets and room temp superconductors

• Advancements in plasma confinement time and stability

• Improvements in neutron resistant materials

• Breakthroughs in fuel cycle and tritium breeding

• Developments in laser technology for inertial confinement fusion

And synergistic industries that stand to be impacted include:

• Advanced materials like nanomaterials (for reactor components)

• Cryogenics and cooling systems

• Grid infrastructure & energy storage (US grid is severely outdated)

• Robotics and remote handling technologies (for maintenance)

• Neutron science and applications

• Hydrogen or Helium-3 production, mining and related industries

Funding Fusion

Most major powers have announced increased government funding for R&D in the race to achieve fusion. China is spending ~$1.5b p/a — double the US spend. As of 2021, private investment in fusion hit $4b globally. It has dropped off over the VC lull, but in June, the DoE grants program allocated $46M to eight US companies for pilot scale fusion projects.

Leading US VCs investing in fusion include Breakthrough Energy, Khosla, Lowercarbon, Prime Movers Lab, Tiger Global, and DCVC. Tech giants like Google, Jeff Bezos and Sam Altman are also active in the space. Goldman Sachs and other financial giants are also betting on this moonshot tech.

Conclusions

We expect investor interest in Fusion to continue growing as tech breakthroughs in the lab become viable in the wild and as innovation drives commercial application. With companies like Microsoft, Amazon and OpenAI pinning their AI futures on fusion, it looks increasingly likely full commercialization will be achieved this decade. It’s a long bet, but many leading startups have almost 100% exit likelihood predictions, so it looks like a pretty sound one for those with the patience to wait for it to bear fruit.

FOR INVESTORS
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4. ⏱️ AI Agent Employees - New York - Sophisticated workflow automation for businesses towards fully autonomous organizations. Previously-exited founder. Backed by Tribe & Kenetic. (Seed)

5. Therapy for Baldness - Los Angeles, CA - Developed by ex-Kythera R&D Leader. Virtual development model and world class team seeking to fund POC study. (Seed)

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Job Candidates

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1. Struck Capital Venture Associate, ex-West2East (Russell Wilson) Director of Special Projects, ex-Phoenix Holdings Investment Associate. Harvard BA. Vietnamese pro basketball player.

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TRENDING TOOLS AND BUZZY TECH
Tools

Nvidia - NIM Agent Blueprints, customizable enterprise AI workflows.

Cerebras - Sets record for AI inference speed of 1.8k tokens per second.

Meta - Ultralight “Puffin” XR headset with external power, cpu due 2027.

Tech

Nvidia - Seeks to patent “energy efficient liquid-cooled datacenters.”

3D Printing - 1. 3D metal printing machine. | 2. 3D printing glass.

AI Medtech - 1. AI spots cancer with nanoscale precision | 2. AI tool for early dementia detection.

DEALS WE’RE WATCHING
Closed Deals:

Gen AI Coding - San Fran AI startup Magic raised $320M from Eric Schmidt, Atlassian, CapitalG, Elad Gil, Jane Street, Friedman & Gross, Sequoia and more.

Data Infrastructure - San Francisco enterprise data startup Cribl secured a $319M Series E at $3.5B led by GV backed by GIC, CapitalG, IVP, and CRV. Cribl surpassed $100M in ARR last year.

Autoimmune Biologic Drugs - NJ biotech startup Navigator Medicines raised a $100M Series A led by Forbion and RA Capital.

Deals & Companies to Watch:

[Open Deal] L-Nutra - The LA food tech company held the first close of its Series D at $47M and eyes a final close at $75M within 3 months. It targets EBITDA-positivity by Jan, and IPO in 12 to 18 months.

Optimized AWS Use - San Francisco startup helps clients optimize cloud products, with its client base up 450% in 18 mths, to manage $1.5 b in AWS spend. It just closed a $30M Series A.

Events.com - The California event management platform is set to go public on NYSE via a SPAC merger led by former Barclays Plc CEO Bob Diamond and Jeff Tuder at a pro forma value of $400M.

Funding Buzz Watch:

NEA - The leading Menlo Park firm is reentering the secondaries market with the $468M “Secondary Opportunity Fund” backed by over 60 LPs.

SNAK Venture Partners - New Chicago VC firm founded by two longtime partners at Pritzker Group is launching a $50M fund to focus on digital marketplaces. 

[Open Fund] ACE Capital Partners - A new VC firm by ex Israeli Air Force commander to back startups working on defense, aviation, and space technologies, is raising a debut fund anchored by Harel Insurance.