German fusion start-up Proxima Fusion secured €400 million in a funding round led by XTX Markets and including Google as a strategic investor. The deal values Proxima at €2.4 billion and signifies a growing trend of tech giants investing in nuclear fusion as a potential source of clean energy for power-intensive applications like AI.

XTX Markets, founded by billionaire Alex Gerko, contributed a quarter of the funding. Google's investment marks its first in a European fusion company, expanding its portfolio beyond U.S.-based firms like Commonwealth Fusion Systems and TAE Technologies. Proxima plans to use the capital to build a €2 billion demonstration facility in Germany by 2031, aiming for commercial power generation by the late 2030s.

The race for fusion power is driven by the escalating energy demands of data centers and the challenges of grid connections. While tech companies like Google are spreading their bets across various fusion concepts, investors caution that the technology's economic viability and scalability remain unproven. The investment from RWE, a German energy company, also includes providing a site for Proxima's future commercial plant.