Nuclear fusion is a reaction in which two or more atomic nuclei are combined to form a single heavier nucleus. This is the process that powers the sun and other stars. Fusion releases a tremendous amount of energy, which Microsoft hopes to tap to generate electricity within the next half of this decade.

Studies around fusion power reveal that the technology has the potential to be used as a clean and safe source of power on Earth, but its viability is still decades away.

However, a deal believed to be the first-ever commercial agreement for the production of fusion power will see Helion Energy, a startup backed by OpenAI’s founder Sam Altman, deliver up to 50MW or more at the end of the first year of the facility’s launch in 2028.

Helion Promises to Deliver 50MW of Fusion Power to Microsoft

The agreement between the tech giant and Helion is by far not basic as the latter has promised to produce at least 50MW by the end of the first year of operation or would be liable to pay financial penalties.

Neither Helion nor any other company in the entire world has been able to generate energy through nuclear fusion, making the startup’s commitment an ambitious one.

“We wouldn’t enter into this agreement if we were not optimistic that engineering advances are gaining momentum,” Brad Smith, Microsoft’s President said.

Researchers have over the years studied how the sun and the stars produce energy. It is believed fusion reactors have the potential to produce a tremendous amount of carbon-free energy that can be harnessed to power global economic activities and for domestic use.

According to the International Atomic Energy Agency, producing electricity using fusion is likely to be feasible in the latter half of this century. However, Helion Energy is set to construct a prototype demonstrating its capability to produce electricity from fusion by next year.

“The goal is not to make the world’s coolest technology demo,” Altman, OpenAI’s CEO said in an interview. “The goal is to power the world and to do it extremely cheaply.”

Altman, the man behind OpenAI, a company spearheading the development of large language models (LLMs) like ChatGPT believes Helion would be more committed to its goal now that it has the first customer.

Microsoft has been sprinkling AI across its many products since the beginning of the year after striking a multibillion investment deal with OpenAI. At least 600 enterprises around the world have been selected to test Microsoft-365 products like Teams, PowerPoint, Notes, and Outlook – all integrated with AI capabilities.

As Helion works around the clock to deliver its ambitious promise, Constellation Energy, which controls the largest fleet of nuclear plants in the United States, has been tapped to market and manage the project’s transmission.

Intelligence and Abundant Clean Energy Will Transform the World

Altman has sunk a hefty $375 million in Helion and is confident the nuclear fusion company can start delivering energy to the grid before 2028.

Altman told the Wall Street Journal (WSJ) that he visits Helion once every month to guide the executives on what to work on as they figure out how to be efficient. He also contributes to talent search and recruitment.

“I had this belief that the two things that would matter most to making the future and raising the quality of life a lot were making intelligence and energy cheap and abundant and that if we could do that, it would transform the world in a really positive way,” Altman said.

Several high-profile investors, including Sam Altman and Bill Gates, have put money into fusion companies, collectively raising over $5 billion, as reported by the Fusion Industry Association based in Washington, D.C.

Nuclear fission power plants, which involve splitting atoms, currently supply nearly 20% of the electricity in the United States. However, nuclear fusion has the potential to produce electricity by harnessing the energy released when hydrogen atoms merge to form helium.

Momentum has grown for the industry since December when the U.S. Department of Energy announced a significant research breakthrough.

In the study, a fusion reaction at the Lawrence Livermore National Laboratory generated more energy than was initially tapped to build the fusion facility by shooting lasers targeted at a specific point.

To be considered a viable power source, the entire fusion facility must produce more energy than it consumes in a cost-effective manner that can compete with prices in the broader electricity market.

50MG Fusion Power – A Drop in The Ocean For Microsoft

The deal with Helion for 50MW is extremely small, considering Microsoft is the largest buyer of power-purchase contracts. These agreements give consumers a chance to lock in electricity supplies for multiple-year periods.

In 2022 alone, Microsoft signed deals of up to 1.2 gigawatts of clean energy, as reported by BloombergNEF.

The tech giant and Smith are convinced that fusion power, artificial intelligence, and quantum computing would be the biggest innovations of this decade with the ability to “intersect with each other.”

Artificial intelligence and quantum computing would need enormous amounts of energy, which could be tapped from fusion power.

“As a purchaser when we lean in at the right moment in the right way we can help make new markets,” Smith said.

Helion’s Approach to Fusion Power

Helion is betting on Helium-3, a rare type of gas mainly utilized in quantum computing, to build its fusion facility—a different approach from tritium—the most common approach. Tritium is a unique isotope used to trigger fuel reactions.

The firm is working on a 40-foot plasma accelerator designed to heat fuel to a staggering 100 million degrees Celsius. This process involves heating deuterium and helium-3 into plasma and utilizing pulsed magnetic fields to compress it until fusion occurs.

Helion’s ultimate goal is to generate more energy than they consume, a longstanding obstacle in the realm of fusion power.

David Kirtley, CEO at Helion confirmed that the company would be obligated to pay financial penalties if it fails to deliver the 50MW fusion power to Microsoft in time. However, he declined to mention the figures involved.

“There’s some flexibility, but it is really important that there are significant financial penalties for Helion if we don’t deliver,” Mr. Kirtley said. “We think the physics of this is ready for us to signal the commercialization of fusion is ready.”

Since Helion and Microsoft are both headquartered in Washington state, the agreement provides that the fusion power generated would be supplied to the tech giant’s facilities in the area.

To date, the company has secured over $570 million in private funding, with $375 million of that total coming from OpenAI CEO Sam Altman.

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