- University of Science and Technology of China spinout secures backing from Ant Group and top venture investors
- Funding comes as China’s fusion startups attract record levels of capital to appease power-hungry AI data centers with boundless energy
Xeonova (星能玄光), a nuclear fusion startup spun out of the University of Science and Technology of China (USTC), has raised 500 million yuan ($74 million) in fresh funding, underscoring growing investor enthusiasm for fusion technologies as China races to develop next-generation energy sources for the AI era.
The Hefei-based company recently completed a Series A round and another follow-on financing, bringing in a consortium of new investors including GP Capital, Fortune Capital, CoStone Capital, Highlight Capital, Shilin Group and Shanghai Sci-Tech Innovation Group.
Existing backers, including Ant Group, CAS Star, Soul Capital, Pagoda Innovation, Jolmo, Hefei Industrial Investment Angel Fund and Tianjin Venture Capital, also participated.
The latest funding will support efforts to improve key performance parameters of its field-reversed configuration, or FRC, systems and accelerate engineering validation and prototype reactor development.
Founded in March 2024, Xeonova commercializes technology developed at USTC’s KMAX-FRC facility under the leadership of professors Sun Xuan and Li Hong.
Compact and lower-cost
The company focuses on FRC fusion systems and combines FRC technology with tandem magnetic mirrors and electrostatic barriers in an effort to build compact, lower-cost fusion power plants.
Unlike the more widely pursued Tokamak approach, FRC reactors feature a simpler structure, higher plasma pressure and potentially lower construction costs.
In February 2025, Xeonova said its self-developed Xeonova-1 device achieved first plasma less than two months after installation began, setting what the company described as a world record for fusion-device construction speed.
The startup aims to achieve megawatt-scale fusion power output by 2030 and validate a 100-megawatt engineering reactor by 2035.
Unprecedented funding
China’s fusion sector has attracted unprecedented investor attention over the past year, with publicly disclosed financing surpassing 20 billion yuan for the first time, according to industry data.
Earlier this year, Tsinghua University-affiliated startup Transwarp (星环科技) raised 1 billion yuan in a Series A round, setting a record for a single financing by a privately funded fusion company in China.
Driven by rising AI-related electricity demand and global energy-security concerns, fusion has become one of China’s most closely watched deep-tech investment themes.
Technology companies, energy groups and venture capital firms increasingly view the technology as a potential long-term power source for future computing infrastructure.
Xeonova’s latest fundraising suggests investors are placing bets on multiple technical pathways, with both Tsinghua- and USTC-linked fusion ventures now attracting substantial capital as China’s commercial fusion industry begins to take shape.
