Nova Fusion bets compact FRC fusion beats tokamaks for AI power; ¥2.4B in 16 months

A Chinese private fusion startup building FRC-SMR (field-reversed configuration, small modular) reactors as distributed power plants, starting with its first device, Nova-1, aimed at AI data center demand.

FRC-SMR compact reactors can beat tokamaks to net energy Q>1 and sell 50MW plants to AI data centers at a target power cost of ¥0.07/kWh.

¥2.4B (~$340M) total: ¥500M angel (Aug 2025, record for Chinese private fusion), ¥700M angel+ (Apr 2026), ¥1.2B Pre-A series (Aug 2026)

Guo Houyang, a U.S. Physical Society fellow and former chief scientist at the world's largest FRC company TAE, founded Nova Fusion in Shanghai in April 2025. He decided the time was right because AI's power hunger had compressed fusion's commercial window from about 30 years to 5–10, and Helion had already proven FRC's engineering path.

Nova-1 finished engineering design and core-component development and moved into final assembly. The company targets first plasma discharge by end-2026, China's first private 100 million °C fusion temperature in 2027, and Q>1 by 2029; investors benchmarked it against Helion Energy, which has raised over $2.1B at a $15.5B valuation.

Still running: Nova-1 is in assembly, with first plasma targeted for end-2026 and a 50–100MW demo plant planned for the early 2030s.

AI data centers created a 5–10 year power demand window that favors small, distributed reactors over multi-decade tokamak megaprojects.

FRC's magnetic-compression design is structurally simpler and far cheaper, giving a capital-constrained startup a plausible path to commercial power.

Guo Houyang's rare full-stack FRC experience from TAE and U.S. DOE programs made the team credible to top-tier investors.

China's industrial supply chains let the company develop every core subsystem domestically, including record-size quartz vacuum chambers.

The company deliberately front-loaded fundraising in parallel with engineering milestones, so it could start Nova-2 before Nova-1 even produced plasma.

When a market window compresses, a cheaper, faster technical route can outrun the incumbent one — but record funding only buys time until the device must actually produce plasma.

As of September 2026, Nova Fusion has 60+ engineers and all four core subsystems — solid-state pulsed power, modular high-field magnets, large quartz vacuum chambers, and a nanosecond control/acquisition system — developed in-house and entering mass production. Nova-1 is in final assembly, with first plasma targeted for end-2026 and China's first private 100 million °C fusion temperature in 2027. The plan is to start Nova-2 ahead of Q>1 and upgrade it into a 50MW commercial demo plant around 2030, selling power first to AI data centers.