Virginia Approves the First Nuclear Fusion Reactor to Connect to a Commercial Power Grid and Power the AI Age

A routine planning meeting in Chesterfield County, Virginia just marked a major milestone for nuclear fusion in America...

Last week, commissioners unanimously voted to greenlight the permit for nuclear fusion startup Commonwealth Fusion Systems ("CFS") to build ARC, the 400-megawatt fusion power plant backed by Alphabet's (GOOGL) Google division. It will be located on land owned by utility giant Dominion Energy (D).

If it proceeds as planned, ARC will be the world's first fusion plant connected to a commercial power grid. Construction should begin later this decade.

Why This Matters to Tech Investors Today

Government leaders, grid operators, and tech companies are each saying the same thing in different ways...

The massive wave of artificial-intelligence ("AI") computing is colliding with real-world power scarcity.

This spring, Virginia's governor, Glenn Youngkin, put it simply:

Virginia already contains the world's densest cluster of data centers. It's building more. And its electric grid is straining to meet the record demand. PJM, the regional grid operator, expects peak demand to rise even more sharply in the coming years.

No surprise, data centers are driving most of the increase.

That's one reason why in July, Google stepped up to buy half of this new fusion plant's total power generation. And it took a bigger stake in the company. As we wrote at the time...

In other words, Google is not only promising to buy CFS's future energy – it's helping fund the race to get that energy on the grid. The initial deal for 200 megawatts ("MW") of power is four times the amount that Microsoft (MSFT) committed to buying from Helion Energy. And for context, that's enough power for roughly 75,000 homes.

That's a strong vote of confidence in a technology that has not yet been commercialized – and it's exactly why Wall Street analyst Whitney Tilson is predicting an "Amazon Helios" moment in his latest documentary.

In short, Google sees fusion as an answer to secure its energy needs in the AI era. And the deal underscores that the race for AI "compute" is also a race for electricity.

Why AI Needs Fusion Power

Fusion is the same reaction that powers the sun.

Unlike current nuclear fission reactors – which split heavy atoms – nuclear fusion forces light hydrogen isotopes together until they merge and release heat. That heat then converts water to steam. And the steam turns turbines to generate power.

That means fusion power is truly clean energy. And most important for AI, it means it's practically limitless...

My colleague and Wall Street legend Whitney Tilson has pointed to a convergence of fusion breakthroughs, including new high-temperature superconducting magnets, along with a flood of private capital and the urgent need for power thanks to AI.

Because AI's computation requirements are essentially limitless, AI is forcing tech giants to secure new sources of reliable, near-limitless energy.

The International Energy Agency projects that global electricity consumption by data centers could more than double to 945 terawatt-hours by 2030. And the agency notes that data centers are on course to consume almost half of the growth in electricity demand over the next five years...

Driven by AI use, the U.S. economy is set to consume more electricity in 2030 for processing data than for manufacturing all energy-intensive goods combined, including aluminium, steel, cement, and chemicals.

CFS says ARC in Chesterfield County will be its first grid-scale plant. It pegs the eventual electricity output at around 400 megawatts – enough to power roughly 150,000 homes.

And if all goes well, Chesterfield is just the start of the grid-scale fusion plants coming down the line for tech giants. As my colleague Nick Koziol recently wrote...

Big tech companies have seen the writing on the wall. And they're investing heavily to secure power supplies for their data centers. Here are just a few of the investments...

• Microsoft (MSFT) locked in 20 years of power from Constellation Energy's (CEG) Three Mile Island nuclear plant.
• Alphabet (GOOGL) will pay to develop and construct several small, modular reactors to provide up to 500 megawatts of power.
• Amazon (AMZN) secured 1.9 gigawatts of nuclear power from Talen Energy (TLN).
• Meta Platforms (META) announced a 20-year partnership for 1.1 gigawatts ("GW") of nuclear power from Constellation Energy.

What do all these investments have in common?

Every single one is building on the idea that Whitney calls Amazon Helios...

What Is the Amazon Helios Project?

Fusion is the only energy tech that can truly scale with AI... and do it in a clean, safe way.

As we wrote in our explanation of what the Amazon Helios Project is...

If successful, it would inaugurate a new age where energy is abundant and cheap, leading to leaps in productivity and quality of life that are hard to imagine today... much like someone in 1925 would struggle to imagine our high-tech life now.

Of course, with any big revolution, especially one in its early stages, there's a note of caution. The broader market volatility of breakthrough technologies is real.

We fully expect plenty of failures along the path – from scientific hurdles to regulatory delays, funding challenges, and even company failures.

But if this Chesterfield plant wins the race for the first-ever fusion plant connected to the grid... it certainly won't be the last.

Learn all about the Amazon Helios Project in Whitney Tilson's latest documentary by clicking here.