Fusion Startups Xcimer and Pacific Fusion Turn to Defense Funding
Xcimer and Pacific Fusion deepen defense ties as RTX and the NNSA back laser and high-energy experiments that could also advance commercial fusion power.
Summary
Fusion startups are expanding into defense as stalled climate-tech venture commitments leave capital-intensive developers seeking new funding, despite fusion capturing a large share of recent climate investment. The industry traces its dual-use lineage from Cold War thermonuclear research to the National Ignition Facility’s 2022 fusion breakthrough after more than 25 years supporting national security. Drone warfare strengthens the business case: about a decade ago, a U.S. ally used a $3 million Patriot missile against a $200 consumer drone, while lasers promise rapid, cheaper shots powered by generators, ship reactors or engines.
In September 2026, Denver-based Xcimer announced an RTX Ventures investment and RTX partnership, allowing Raytheon’s parent to explore its lasers. Xcimer calls Phoenix the world’s largest privately owned laser; its planned power plant would bombard and compress fuel targets until atoms fuse, although Phoenix operates one order of magnitude below the required power. In August 2026, Pacific Fusion signed an NNSA memorandum covering high-energy-density fusion experiments. Its newly started New Mexico demonstration facility near Sandia and Los Alamos National Laboratories aims to generate more power than it consumes, while producing fusion reactions far more powerful than those currently used for government nuclear weapons experiments. CTO Keith LeChein developed the core technology after working at Sandia, Lawrence Livermore and the NNSA; COO Carrie von Muench said defense applications were always considered.
Positives
- RTX Ventures’ investment gives Xcimer another funding source while allowing RTX to assess the startup’s lasers for defense applications.
- Phoenix is described by Xcimer as the world’s largest privately owned laser and will support development of its fusion power plant.
- Pacific Fusion’s August 2026 NNSA memorandum creates a pathway for joint high-energy-density fusion experiments.
- Pacific Fusion’s New Mexico facility targets energy output exceeding total facility consumption.
- Laser defenses could replace some expensive single-use interceptors with rapid shots powered by generators, ship reactors or engines.
Risks & concerns
- Phoenix operates one order of magnitude below the power Xcimer says its commercial fusion plant will require.
- Climate-tech venture commitments have stalled even as expensive fusion projects continue requiring substantial capital.
- Pacific Fusion has not yet demonstrated that its New Mexico facility can produce more power than it consumes.
- Traditional air defenses remain poorly matched against numerous cheap drones, exemplified by a $3 million Patriot intercepting a $200 device.
- Pacific Fusion’s planned reactions deepen the technology’s connection to government nuclear weapons experimentation.