Shanghai and Hefei are locked in a fierce rivalry, both betting big on the "ultimate energy" — who will be the first to crack the commercialization path of nuclear fusion?
Shanghai and Hefei are betting on the future of the fusion industry through different paths.
Recent extensive observations of the energy market by Foresee Energy have noted that the market for nuclear fusion, this "ultimate energy source," is surging with undercurrents.
Star Ring Fusion Energy has completed a 500 million yuan Series A+ financing round, with its valuation exceeding 1 billion US dollars, making it the first unicorn in China's nuclear fusion sector. Dongsheng Fusion and Nova Fusion followed closely by completing large-scale financing rounds, while Alibaba, Meituan Dragon Ball, and Hillhouse Capital have flocked to enter the arena. Standing behind all these transactions is the same entity — Shanghai State-owned Assets. Over the past year or so, from national team platforms to private device companies, from upstream superconducting materials to plasma control, almost every critical node has been covered.
Yet Shanghai is not the only player. On June 27, Hefei dropped a bombshell: the 582-ton toroidal field superconducting magnet passed final acceptance, with 100% of the entire chain domestically produced. Within half a month, three nuclear fusion enterprises in Hefei raised nearly 1 billion yuan in concentrated financing rounds.
When the "ultimate energy" that was always "50 years away" suddenly gains a concrete timeline, two cities are betting on the same future in drastically different ways.
01
The "Preemptive Move" Two Years in Advance
Shanghai Steps Up to the Table First
The layout of Shanghai State Investment began in 2024. Back then, the domestic "fusion craze" had not yet taken shape, and market-oriented VCs were still on the sidelines, but Shanghai State Investment had already surveyed dozens of scientist teams.
This relies on the national team platform. In July 2025, China Fusion Energy Co., Ltd. was established in Shanghai with a registered capital of 150 billion yuan, with shareholders including CNNC, PetroChina, and the National Green Development Fund. After settling in, this company quickly promoted the construction of China's Huanliu-4 facility, which is expected to generate tens of billions of yuan in direct investment.
As of the first quarter of 2026, the three leading industrial mother funds under Shanghai State Investment have leveraged capital exceeding 200 billion yuan. Among them, the future industry fund has a total size of 150 billion yuan, having invested in 61 projects with a total amount of 47.66 billion yuan. With a 15-year investment cycle, it is long enough for a fusion device to go from blueprint to demonstration reactor.
Shanghai State Investment's advantages lie not only in abundant capital, but also in acting early enough.
After Star Ring Fusion Energy announced its high-temperature superconducting route in 2022, it connected with its supplier Shanghai Superconductor — whose largest shareholder is precisely Shanghai Science and Technology Innovation Group. This brought Star Ring Fusion Energy to the attention of Shanghai State Investment: it was led in the 2024 Pre-A round to secure a position, the 1 billion yuan Series A round closed in January 2026, and a follow-on 500 million yuan Series A+ round was completed in May.
Dongsheng Fusion was jointly incubated by the Future Industry Fund and the Science and Technology Innovation Group, with continuous follow-on investments from its angel round up to the $100 million financing round in June. Nova Fusion secured 500 million yuan in its 2025 angel round with Lingang Science and Technology Innovation Investment's entry, and Lingang State-owned Assets continued to increase its stake in the 700 million yuan angel+ round in April 2026.
In the upstream supply chain, Shanghai Superconductor's production capacity has increased from 200 km in 2022 to over 4,000 km in 2026, and it submitted a STAR Market IPO application in 2025. Xixi Technology achieved a world-record 27.2T at the 20K temperature range. Xirong Zhaobo specializes in plasma control. Both companies have received investments from Shanghai State-owned Assets.
Shanghai does not bet on a single technical route, but places simultaneous bets on tokamaks, spherical tokamaks, deuterium-helium 3, and FRCs. The device is the "chain leader" of the industrial chain: whoever masters the core device can drive the entire upstream supply chain. In the eyes of Foresee Energy, it is clear that Shanghai is not aiming for one or two star projects, but the entire industrial chain.
As of June 2026, Shanghai has confirmed at least 8 fusion devices. According to media reports, Liu Lipeng, Executive General Manager of the Investment Department of Shanghai Future Industry Fund, judged: "It is expected to become the city with the highest density and quality of fusion devices in the world, and perhaps the only one."
02
Hefei's Cards
Are Not About Money
On June 27, 2026, the Hefei Institutes of Physical Science, Chinese Academy of Sciences announced that two sets of key superconducting magnets for fusion reactors had passed technical acceptance. The toroidal field superconducting magnet is 21 meters long, weighs 582 tons, has a volume 1.3 times that of the ITER model, 3 times its energy storage capacity, and costs only half of ITER's equivalent. The entire chain is 100% domestically produced, with 47 patents filed and 14 standards formulated.
This cannot be achieved simply by spending money — it is built through decades of accumulated effort.
Hefei's nuclear fusion research began in the 1970s. More than half a century of accumulation has resulted in the most complete nuclear fusion scientific research system in China. The Institute of Plasma Physics is the core source of technology; EAST continues to refresh world records; the main construction of CRAFT is over 70% complete; and BEST has entered the final assembly phase. The three major facilities are arranged in tiers, forming a continuous line from basic research to engineering testing and then to equipment manufacturing.
Hefei's real moat is its talent pool.
The University of Science and Technology of China (USTC) has a foundation in the nuclear fusion field unmatched by any other institution in China. In 1958, the year of its founding, it established the "Department of Nuclear Physics and Nuclear Engineering"; in 1974, it took the lead in setting up the plasma physics major; in 2007, it co-founded the School of Nuclear Science and Technology with the Hefei Institutes of Physical Science, CAS, and its "Nuclear Science and Technology" discipline is a national "Double First-Class" Class A+ discipline. In 2026, USTC established the School of Future Energy, linking top resources such as the Institute of Plasma Physics, the Institute of Nuclear Energy Safety Technology, and the Shanghai Institute of Optics and Fine Mechanics, CAS.
Its faculty lineup includes 9 academicians of the Chinese Academy of Sciences and Chinese Academy of Engineering, and nearly 100 high-level talents. Nearly half of the discipline leaders in plasma physics and fusion directions at domestic universities, as well as the founders of nearly ten emerging fusion companies, all graduated from USTC.
In January 2026, the School of Fusion Science and Engineering of Hefei University of Technology was inaugurated, and it co-built joint laboratories with six enterprises including Dongsheng Fusion. Anhui University of Science and Technology subsequently established the School of Fusion Engineering. According to the plan, around 10 universities will set up related schools in the future, covering directions such as physics, engineering, materials, and manufacturing, with the goal of building a talent reserve of ten thousand people.
Hefei has constructed a model of "college training + fund support": enterprises such as Fusion New Energy have set up postdoctoral research stations, and outstanding talents can enjoy housing purchase and rental subsidies. Hu Haomin, Executive Vice President of the Energy Research Institute of Hefei Comprehensive National Science Center, said: Nuclear fusion talent training should not only be carried out in universities, but also allow students to go to experimental facilities and delve into frontline enterprise work.
Dong Wei, CEO of Star Fusion, stated in a media interview that when enterprises choose to settle in Hefei, the core reason is that the local area has the nation's leading industrial foundation, complete industrial chain supporting facilities, and talent reserve. Currently, Hefei has gathered more than 60 nuclear fusion industry chain enterprises, forming a ten-billion-level industrial cluster.
Shanghai buys the industrial chain, while Hefei guards its talent pool. An industrial chain can be purchased with capital, but a talent pool can only be nurtured over time.
03
Two Cities, One Track
Under Heavy Bets, Who Will Be the First to Achieve Commercial Viability?
Now, after sorting out the development of the nuclear fusion industry in the two cities, we can see that Shanghai relies on capital-driven development and industrial chain integration. More than 200 billion yuan in funds, a 15-year cycle, 8 devices, and coverage of all technical routes — this combination of measures is unmatched by any other city. The goal is clear: no matter which route succeeds, the industrial chain will be in my hands.
In contrast, Hefei relies on accumulated scientific research and engineering breakthroughs. Seventy years of accumulation, three major scientific facilities, and the 582-ton world's largest magnet — these cannot be bought with money. Hefei's bet is that it must secure a key position at the critical node of engineering implementation.
Shanghai is betting: when the "singularity" of nuclear fusion arrives, whoever masters the industrial chain will have pricing power.
Hefei is betting: using technological accumulation and large scientific facilities to hold the commanding heights on the eve of commercialization.
Currently, nuclear fusion has been included in the "15th Five-Year Plan" outline, and the Atomic Energy Law has been officially implemented. At the 2026 Nuclear Fusion Energy Technology and Industry Conference, the industry consensus is that "the first light lit by nuclear fusion" is expected to be seen around 2030.
However, Foresee Energy believes that there is a huge gap between "lighting the first light" and "commercialization."
Tritium fuel self-sustainment is the top problem — tritium is almost "priceless but unavailable," with extremely small natural reserves, and it has to "breed" through the fusion reaction itself. Without a stable tritium supply, a fusion reactor is just a pile of expensive scrap metal. Irradiation-resistant materials are another major bottleneck. No device has yet achieved continuous and stable net energy gain (Q>1).
In addition, there is a hidden concern in the nuclear fusion track: overheated capital. Many devices are still in the assembly stage, and the speed of engineering implementation lags far behind the speed of financing. Almost all projects with single-round financing of over 500 million yuan have state-owned assets behind them — can they survive the 15-year waiting period?
The final outcome of this high-stakes gamble will not be revealed until 2030, but the table is already full: Shanghai State-owned Assets, Hefei Industrial Investment, CNNC, Alibaba, Hillhouse, Sequoia. No one wants to miss the first train of the "ultimate energy."
However, the road from the first light to the first kilowatt-hour of commercial electricity may be longer than anyone imagines.
This article is from the WeChat public account "Foresee Energy", written by Zhao Jianan, and published with authorization from 36Kr.