Commonwealth Fusion Systems announced on Thursday that it will supply high-temperature superconducting magnets to Realta Fusion, marking the second in a series of agreements indicating that the company plans to heavily rely on its magnet technology in the upcoming years to generate essential revenue.

“This is the largest transaction of its kind to date for CFS,” Rick Needham, the chief commercial officer of the company, informed reporters during a call. 

Commonwealth Fusion Systems, abbreviated as CFS, has previously provided magnets for the WHAM experiment at the University of Wisconsin, where fusion startup Realta has a close collaboration. The underlying physics of WHAM supports Realta’s method for fusion energy, recognized as a magnetic mirror reactor. 

In a magnetic mirror, plasma is confined in a configuration that resembles two 2-liter soda bottles joined at the base. At each end, strong magnets push the plasma back toward the center. Milder magnets encircle the central part of the bottle shape. 

To enhance reactor power, Khosla-backed Realta would only need to enlarge the central section, and since those magnets are less potent, they are more economical. Costs per kilowatt-hour are expected to decrease as Realta’s reactors grow in scale.

CFS is also working on another type of magnetic confinement fusion known as a tokamak. In a tokamak, D-shaped magnets generate strong fields to maintain plasma in a doughnut-like configuration. Over the years, the firm has improved its magnets in the quest to generate electricity from Arc, its forthcoming commercial-scale reactor planned for Virginia.

The existence of both CFS and Realta is rooted in the magnets themselves. CFS was established in 2018 when MIT scientists discovered that a new category of commercially available high-temperature superconductors could form the basis for a feasible tokamak design. Realta was launched a few years later when physicists at the University of Wisconsin “recognized that there was a new technology, a game changer that would allow us to return to the [magnetic] mirror and take advantage of the engineering benefits that the concept offers,” said co-founder and CEO Kieran Furlong.

Along with the Realta and WHAM agreements, CFS has also granted a license for its high-temperature superconducting magnet technology to Type One Fusion, which is developing a third reactor design type referred to as a stellarator. Although this agreement does not entail CFS constructing actual magnets for the company, it could potentially lead to that in the future, Christine Dunn, CFS’ head of external communications, informed TechCrunch.

These agreements will aid CFS in recouping its investment in magnet manufacturing. The startup dedicated seven years and hundreds of millions of dollars to establish a factory capable of producing high-temperature superconducting magnets tailored to fusion-power specifications. Thus far, this investment has been directed toward building Sparc, the company’s demonstration reactor, which is not expected to activate until later this year.

“With Sparc now 70% finished, it was the perfect time to begin supporting Realta with our magnet production,” Needham stated.

Given that Realta and Type One are pursuing distinct reactor designs, CFS does not currently view them as direct competitors. In the marketplace, Realta and CFS are even further apart, with the former initially concentrating on industrial applications requiring substantial amounts of heat.

To date, CFS has secured nearly $3 billion — a significant portion of all venture capital raised by fusion startups. This positions the company advantageously, granting it the resources to construct essential facilities such as its magnet factory ahead of its rivals. The startup promotes these deals as a service to the broader fusion sector, providing access to technologies that would cost millions to recreate. This is certainly valid, but it also enables access to even more venture funding, albeit indirectly.

Update 1:45 pm ET: CFS’s manufacturing facility produces HTS magnets, not tape, and it will remain operational, creating additional magnets for Sparc. The article also inaccurately identified Rick Needham’s position as COO; he is CCO.