Google and XTX Markets back German fusion start-up as nuclear bets proliferate
Proxima Fusion valued at €2.4bn in €400mn funding round as AI boom spurs the race for energy’s holy grail
Google and British billionaire Alex Gerko’s XTX Markets have backed German start-up Proxima Fusion, broadening their bets on nuclear fusion as companies race to secure future solutions on carbon-free electricity for powering artificial intelligence computing.
Trading firm XTX Markets led the €400mn funding round, putting in a quarter of the total, according to people familiar with the matter, alongside UK-based East X Ventures, valuing Proxima at €2.4bn.
Google joined the funding round as a “strategic investor”, Proxima said, marking the tech giant’s first investment in a European fusion company, as tech groups spread their bets on the future nuclear technology.
Fusion aims to recreate the reaction that powers the sun by fusing atomic nuclei in a superheated plasma, unlike nuclear fission, which generates energy by splitting atoms. No private company has yet demonstrated that fusion can generate more energy than it consumes to heat the fuel.
Spun out from the non-profit Max Planck Institute for Plasma Physics in 2023, Proxima is pitching to build a €2bn demonstration facility in Germany by 2031 to prove its technology can generate commercial power.
The company is seeking €1.2bn in federal funding from the German government, on top of €400mn promised by the Bavarian state. The commercial plant will follow soon after, aiming to connect to the grid by the late 2030s.
Francesco Sciortino, chief executive of Proxima, told the FT that Google is “looking for everything under the sun” to secure “as much energy as it can” to power its data centres.
Google has already backed Commonwealth Fusion Systems (CFS), one of the sector’s best-funded fusion companies, signing a long-term contract to buy power in the early 2030s.
Sciortino said Google was also interested in getting power from Proxima’s future commercial plant, and that the German company was talking to multiple potential customers but he declined to provide further details.
Gerko’s trading firm is also a prolific venture capitalist and has invested in nuclear companies including X-Energy and Standard Nuclear.
XTX is spending more than €1bn on building its own data centre in Finland, as it seeks to harness vast computing power to handle the information for the $250bn worth of trades that it makes every day across global markets.
So-called hyperscalers like Google are spreading their bets on the advanced nuclear technology. Besides CFS, Google has backed TAE Technologies, which last year announced plans to go public through a $6bn all-stock merger with Trump Media & Technology Group.
Google has already agreed to buy 500MW of electricity from small modular nuclear-fission reactors built and operated by Kairos Power, by 2035.
Microsoft and OpenAI CEO Sam Altman have backed Helion Energy, another well-funded US company with ambitious commercial targets.
Tech groups are racing to secure their own source of clean electricity to power energy-hungry data centres, as grid connection delays around the world stretch to years under mounting pressure on electricity infrastructure.
One investor said backing from tech giants was “positive but not indicative” of fusion’s eventual success.
“Nobody knows which fusion concepts will work, or how economical they will be,” the investor said, adding that for cash-rich technology groups, the investments represented only a small financial risk.
German energy company RWE also participated in Proxima’s funding round as a strategic investor, having previously agreed to provide the site of a former nuclear power plant for Proxima’s commercial facility.
However, Sciortino added that RWE is not looking to secure fusion energy with the “same aggressiveness” as Google.