A closer look at Commonwealth Fusion's $2 billion investment in harnessing solar and stellar energy.

• Commonwealth Fusion Systems CEO Bob Mumgaard discussed with CNBC why the fusion industry is at a tipping point.
• The company is a pioneer in the emerging industry, boasting over $2 billion in financial backing.
• In May, CNBC visited Devens, Massachusetts, to observe the construction of a fusion reactor.

Bob Mumgaard, CEO of Commonwealth Fusion Systems, is well-versed in the history of technology.

Mumgaard stated in a recent CNBC video interview that if you observe fusion today, it resembles flight in 1918.

In 1919, two British aviators and war veterans made the first nonstop transatlantic flight, departing from Newfoundland and landing in Ireland. Today, transatlantic flights are commonplace.

Fusion is the process by which stars produce energy, and it releases more energy than fission, which powers nuclear reactors. Like fission, fusion does not contribute to global warming, but unlike fission, it does not produce long-lasting nuclear waste.

Fusion is commonly referred to as the "Holy Grail" of clean energy due to its numerous advantages.

Since the 1950s, research on a device that can replicate and maintain fusion on earth has been ongoing, but progress is uneven. In May, scientists at Lawrence Livermore National Lab announced they achieved the key fusion milestone of ignition, where more power was generated from the reaction than went into it. However, this was a brief flicker, and a fusion power plant remains firmly in the realm of science fiction.

The Commonwealth is attempting to alter the current situation, and has secured over $2 billion in venture capital from notable investors such as Bill Gates, Gates' climate investment firm Breakthrough Energy Ventures, Google, John Doerr, Khosla Ventures, Lowercarbon Capital, and Marc Benioff's TIME Ventures. This makes Commonwealth the fusion startup with the most private capital, according to the Fusion Industry Association, the industry's trade group.

The U.S. Department of Energy has awarded Commonwealth $46 million in funding for achieving preestablished milestones.

So why now?

Mumgaard is accustomed to listening to arguments against the feasibility of fusion.

We understand the skepticism," Mumgaard said to CNBC. "It doesn't bother us. Our task is to construct and demonstrate the effectiveness of these things.

Historically, humans are slow to change their understanding of technological possibility.

Different people have varying levels of evidence required to believe something," Mumgaard stated. "Even during the Wright brothers' flight, there were skeptics who doubted the existence of planes.

Mumgaard encouraged CNBC to watch and track the story, even if they don't believe it, as it's a race and they are at the beginning.

To follow the race for fusion, you don't need to be a nuclear physicist. Mumgaard outlined the stages for fusion watchers. First, fusion companies must create plasma, which is the fourth state of matter and is the fragile condition required for a fusion reaction. Then, they must heat the plasma to extreme temperatures. Finally, the hot plasma must be confined and protected. In the industry, this trio of conditions - density, temperature, and confinement or insulation - is known as the "triple product."

Fusion companies will achieve ignition and generate an abundance of clean, waste-free energy once they obtain the triple product.

According to Mumgaard, the race is currently "speeding up." There are more entrants, and they are becoming faster, pulling away from each other.

The demand for clean energy, advancements in science, and development in the technology of the component parts necessary to make a fusion device are all converging at this moment, according to Mumgaard, making it the tipping point in the race for fusion.

The growing need for renewable energy sources that do not contribute to climate change is the first factor.

The United Nations Intergovernmental Panel on Climate Change's top scientists have stated that achieving "no or limited" warming above pre-industrial levels requires hitting net-zero emissions around 2050. This is similar to knowing the world needs to transition to net-zero global emissions by 2050, as if we were in the analog age and knew exactly when the Internet Revolution was about to begin, Mumgaard says.

According to Mumgaard, the energy transition is the largest market shift in human history, which involves more than just generating electricity. It entails rebuilding various industries, including power generation, chemicals, steel, and cement, without carbon.

Fusion energy has the potential to replace large, baseload energy demands such as powering steel and cement manufacturing, industrial furnaces, and urban centers, according to Mumgaard. "That's a missing hole," Mumgaard told CNBC. "And it gets more and more acute as you get deeper and deeper into the transition."

Some populations are opposed to nuclear fission as a baseload energy source due to concerns about waste and the risk of nuclear accidents, as demonstrated by Germany's recent stance.

Mumgaard stated to CNBC that we should avoid compelling people to accept something they don't want or attempting to convince them of something they're firmly against.

Fusion is being propelled forward by both increased demand and scientific and technological advancements.

Despite not achieving a significant milestone in building a fusion power plant, we have made significant progress in fusion technology, accumulating a vast amount of scientific knowledge, similar to our understanding of gene sequences and the genome, Mumgaard told CNBC.

Fusion devices can now be made using new techniques such as machine learning and fast actuators, and large supercomputers can simulate what is happening inside these devices.

The ability to create extremely powerful magnets has improved significantly.

The material used to make those magnets did not exist in sufficient quantities five years ago, according to Mumgaard, who told CNBC.

The discovery of high-temperature superconducting material in the 1980s earned two physicists the Nobel Prize in 1987. However, it took a significant amount of time and scientific advancements before this material could be produced outside of a laboratory, according to Mumgaard.

What it looks like to spend $2 billion to build a fusion machine

In the race to deliver fusion, Commonwealth is a front-runner.

In just five years, Commonwealth Fusion Systems has experienced remarkable growth. This growth is not due to mere speculation or empty promises, but to tangible results. Andrew Holland, CEO of the Fusion Industry Association, stated this to CNBC. He added that Commonwealth Fusion Systems' leadership in organizing the fusion industry has propelled the entire industry toward a vision for commercialization on an aggressive timeline.

At Commonwealth's headquarters in Devens, Massachusetts, about 40 miles from Boston, the company's chief scientific officer, Brandon Sorbom, informed CNBC that the company has a substantial procurement team in charge of managing the supply chain required to construct a tokamak, the central component of the company's fusion system, as well as an extensive on-site manufacturing team.

Commonwealth aims to turn on its tokamak, SPARC, by 2025 and then demonstrate net energy gain, as stated by Sorbom to CNBC.

Sorbom informed CNBC that after completing SPARC, Commonwealth's next objective is to construct ARC, a more advanced version of its fusion device that will supply electricity to the grid. ARC is expected to be finished in the early 2030s and will utilize the heat generated by the fusion reaction in molten salt to drive a turbine generator and produce electricity.

Ally Yost, chief of staff, informed CNBC that Commonwealth will initially own and operate fusion power plants, and generate revenue by selling electricity like other power producers.

Eventually, Boeing will operate more like Commonwealth does for the airline industry.

The designers and owners of the IP around the designs of the planes are also manufacturers of key components. Commonwealth may also have a service component to its business, and its customers are likely utilities, industrial companies, or energy-hungry tech companies, according to Yost.

Currently, the priority is to activate the demonstration plant, SPARC.

The facility that will house SPARC has five prongs, with the room that houses the tokamak being at the center. The tokamak is going to be 25 feet tall and about 25 feet in diameter, and the ARC tokamak will be roughly twice as big, according to Alex Creely, the head of tokamak operations, during a tour of the facility.

Despite Commonwealth's ongoing construction of its first demonstration reactor, Mumgaard predicts the inevitable arrival of the fusion age.

"If you know that it is scientifically, industrially, and commercially feasible to turn heat into electricity, and there is momentum to create a product, that is a significant development. How does this impact the larger narrative on climate?" Mumgaard shared with CNBC.