Chris Sacca’s Venture Firm Is Raising a Second Fusion Fund

(Bloomberg) -- Chris Sacca’s venture firm is doubling down on fusion as it seeks to raise a new fund dedicated to the next-gen nuclear technology.

“We are out talking with investors about our second fusion fund,” the Lowercarbon Capital co-founder said at the SOSV Climate Tech Summit on Thursday. Lowercarbon, which has backed fusion leader Commonwealth Fusion Systems, as well as upstarts Princeton Stellarators and Xcimer, announced its first nuclear fusion-focused fund of $250 million in 2022.

The venture firm aims to raise a bigger fund this time, according to a person familiar with the matter.

Venture interest in fusion has risen sharply as the artificial intelligence and cloud computing boom strains global power systems. In the US, data centers are expected to make up roughly 9% of the country’s total electricity usage by 2035, more than double 2024 levels, according to an April report published by BloombergNEF. 

That rising demand is a big allure for venture capitalists to bankroll technologies that could potentially unlock more power supplies. Commonwealth, for one, raised $863 million in August from investors that include Nvidia Corp.’s venture arm. Despite the boom in investments, though, fusion technology has yet to have proven viable commercially, with only a few successful experiments that have generated net energy. Developing components also remains costly.

“There's no doubt that AI is the biggest impact” on energy demand globally, Sacca said. He added that the rising middle class and need for more air conditioning in a hotter world is only speeding up the “growth curve for electrons.”

For climate investors, “electrons are the ball game right now,” he said.

Other investors have also placed bets on fusion. Microsoft Corp. co-founder Bill Gates recently said either nuclear fusion or fission will eventually be “the cheapest way to make electricity.” Breakthrough Energy Ventures, founded by Gates to back emissions-cutting technologies, has also invested in fusion startups, including Commonwealth and Xcimer as well as a handful of other companies. Vinod Khosla is also bullish on fusion and his venture firm has invested in Commonwealth as well as startup Realta Fusion.

Commonwealth is building a commercial pilot plant it expects to be online in 2027.  

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