Nobody said building a fusion power plant would be easy. Physicists and engineers have been working for decades to crack the problem. But over the last year or so, fusion startup Zap Energy took a deeper look at its pathway to a working power plant and decided that it would be quicker to build a fission power plant first.

Wait, what?

“Fission and fusion are two sides of the same coin,” Zap’s new CEO, Zabrina Johal, told TechCrunch. “They have so many challenges that are congruent with each other.”

Zap is among the better-funded fusion startups, having raised more than $300 million, so this partial pivot holds some shock value, no matter how many synergies exist between fission and fusion.

It starts to make more sense against the backdrop of rising energy demand from AI data centers, which is expected to nearly triple by 2030. Tech companies want electricity today, and one of the challenges facing every fusion startup is that grid-ready power plants won’t be ready for several more years — likely a decade or more.

“There is not enough power and energy in the world to build all the data centers that are needed,” Johal said. “It just meant we need to pull this in faster; we need to get something that’s relevant to the grid today.”

Two ways to split an atom

Fission is commercially viable in a way that fusion is not. Fusion is the practice of fusing two light atoms like hydrogen, which also releases energy. One experiment has been able to produce more energy than the fusion reaction needed to ignite, but it wasn’t anywhere close to what a power plant would need to generate. Fission splits heavy atoms like uranium to produce power, and we’ve been doing that since the 1950s.

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Despite decades of experience, building fission reactors cost-effectively remains a significant challenge. Fission startups building small modular reactors (SMR) are counting on mass manufacturing to help bring costs down, though that theory has yet to be proven. Benefits from scaling production can take around a decade to materialize.

Johal said that Zap expects to start generating revenue from the new fission business within a year. “Our business model is not dependent upon generating electrons,” she said. Revenue could come from federal programs from the Department of Defense and the Department of Energy, but it could also include “milestone payments” and reserved production capacity from companies that need massive amounts of electricity, she said.

Milestone payments could be an intriguing model for Zap and other energy startups to follow.

It’s similar in concept to how ASML extracted money from Intel, TSMC, and Samsung to develop extreme ultraviolet lithography (EUV). The semiconductor manufacturers effectively paid a premium for ASML shares, underwriting R&D in the technology and reserving capacity once EUV machines entered production.

But there’s a fundamental difference between what Zap is attempting and what ASML pulled off. When ASML ginned up its “Customer Co-Investment Program for Innovation,” it was clear the Dutch company was the only show in town — everyone else had given up on EUV. In the energy world, tech companies have a range of different technologies and suppliers to pick from. They’ll want to see something extra special in Zap’s fission proposal before they pony up.

On that front, potential buyers can already start assessing Zap’s plans. The startup’s fission reactor will be based on the 4S, a molten salt-cooled design that was jointly developed by Toshiba and Japan’s power industry research institute. Ultimately, it was never built, but Johal said the design comes with “no intellectual property entanglement.”

Johal expects there will be enough demand in the 2030s that Zap will find plenty of customers, despite being years behind other fission startups. “There will not be enough reactors in the near term,” she said.

Follow the money

For Zap’s fission gambit to pay off, one of two things needs to occur: It’ll have to bring in revenue or bring in new investment.

Given Johal’s comments on government funding and milestone payments from large energy users, revenue is the obvious play. The cost of developing one reactor concept is eye-waterin

Fusion power startup Zap Energy pulls a partial pivot, adding nuclear fission to the mix