Fusion power companies are rekindling ties with the defense sector, revisiting the original national security motivations behind fusion research. While many startups have focused on delivering affordable fusion energy to the grid, the connection to defense interests—rooted in Cold War-era developments of thermonuclear technology—remains strong. This renewed emphasis comes as venture capital funding for climate tech, which historically supported fusion ventures, has slowed, prompting fusion firms to seek more diverse sources of investment.

The increased defense interest aligns with advances in laser weaponry and evolving warfare tactics. Conventional air defenses, optimized for piloted aircraft, have struggled against cheaper, more numerous drones. This has exposed inefficiencies such as the costly use of missiles against inexpensive drone threats. Laser weapons, powered by electricity, offer a faster and more cost-effective alternative by firing energy directly rather than expending expensive ammunition, creating a natural synergy with fusion technologies leveraging powerful lasers.

A prominent example is Xcimer, a laser-focused fusion startup based in Denver. Last week, Xcimer announced a new collaboration and investment deal with RTX Ventures, the investment arm of RTX, the parent company of Raytheon. This partnership grants RTX access to Xcimer’s advanced laser technology, potentially enabling novel defense applications while providing Xcimer with crucial funding. Xcimer currently operates what it claims to be the world’s largest privately owned laser system, Phoenix, which is a key asset for developing fusion power plants though it still operates below the power level needed for energy production.

The deal highlights how fusion startups are carving a role in defense innovation beyond energy. By incorporating powerful laser systems into military technology, these companies may help transform defense capabilities while advancing fusion progress. As venture funding landscapes shift and defense demand grows, fusion startups appear poised to benefit from stronger ties between national security and energy innovation. This partnership model signals a broader trend where fusion power development and defense interests intersect once again.