It’s a common occurrence in every nascent industry: founders and investors strive for a unified objective, until financial gains begin to flow and the collective vision starts to split.

Fissures are appearing in the realm of fusion energy, which I witnessed firsthand at The Economist’s Fusion Fest in London last week. The overall optimistic atmosphere remained intact, buoyed by fusion startups securing $1.6 billion in funding over the past year. Nevertheless, participants held varying views on two pivotal questions: When ought fusion startups to go public? And do ancillary businesses serve as diversions?

The prospect of going public was paramount in discussions. In the past four months, TAE Technologies and General Fusion have revealed intentions to merge with publicly traded entities. Both are poised to obtain hundreds of millions of dollars to sustain their research and development endeavors, while investors, some of whom have maintained their faith for two decades, are finally seeing a chance to realize returns.

However, there isn’t unanimous consensus. Most individuals I conversed with expressed concerns that these companies were opting to go public too prematurely and that they hadn’t met significant milestones many consider critical for assessing the progress of a fusion firm.

To recap: TAE declared its merger with Trump Media & Technology Group in December. Although the agreement isn’t finalized yet, the fusion segment of the business has already secured $200 million of a possible $300 million from the agreement, providing it some runway to further develop its power plant. (The remaining funds are expected to be transferred to its account once it submits the S-4 form to the U.S. Securities and Exchange Commission.)

General Fusion announced in January that it would go public through a reverse merger with a special purpose acquisition company. The arrangement could yield the company $335 million and value the combined organization at $1 billion. 

Both firms could benefit from the influx of cash.

Prior to the merger announcement, General Fusion was facing challenges in fundraising, and around this time last year, it laid off 25% of its workforce as CEO Greg Twinney issued a public appeal for investment. It received a brief respite in August when investors extended a $22 million lifeline, but that level of funding doesn’t last long in the fusion sector, where equipment, experiments, and personnel are costly.

TAE’s situation was not as critical, but it still needed additional funding. Before the merger, the company had secured nearly $2 billion, which seems substantial, yet keep in mind the company is approaching 30 years of operations. Moreover, its pre-merger valuation stood at $2 billion, as reported by PitchBook. Investors were at best breaking even.

Neither entity has reached scientific breakeven, a crucial milestone indicating a reactor design possesses potential for a power plant. Many observers doubt they’ll achieve that level before other privately held startups do. One executive remarked that if they were in the same position, they wouldn’t know how to utilize time during quarterly earnings calls if these companies don’t reach scientific breakeven soon.

If TAE or General Fusion fails to deliver tangible outcomes, several individuals expressed concern that public markets might turn against the entire fusion sector.

Currently, not everything may be bleak. TAE has already begun promoting additional products, including power electronics and radiation treatments for cancer. This could afford the company some short-term revenue to appease its shareholders. However, General Fusion has not disclosed any similar initiatives.

Therein lies another point of contention: fusion companies remain divided on whether to seek revenue now or wait until they have an operational power plant.

Certain firms are seizing the chance to generate income along the way. A reasonable approach! Fusion is a lengthy endeavor, so why not enhance your prospects? Both Commonwealth Fusion Systems and Tokamak Energy have stated their intentions to market magnets. TAE and Shine Technologies are both involved in nuclear medicine.

Other startups are concerned that side ventures could serve as a distraction. Inertia Enterprises, for instance, told me they are intensely focused on their power plant. This aligns with the sentiments expressed by another investor months ago: they were apprehensive that fusion startups might lose focus due to lucrative, but peripheral businesses.

There was little agreement on the appropriate timing for going public as well. I encountered several suggested milestones. Some believe that startups should first reach the scientific breakeven milestone, where a fusion reaction produces more energy than is required to initiate it. No startup has accomplished this thus far. The other alternatives include facility breakeven — when the reactor generates more energy than the total site requires to function — and commercial viability — when a reactor produces enough electricity to contribute significantly to the grid.

We might have an answer to this question sooner rather than later. Commonwealth Fusion Systems anticipates hitting scientific breakeven sometime next year, and some speculate the company may capitalize on that event to pursue a public offering.