Why Trump Media's merger with a fusion company is not surprising
Shares of Trump Media & Technology Group Corp. (DJT) soared nearly 42% on Thursday after the company announced a merger with TAE Technologies, a private fusion power company that Trump Media plans to take public.
The all-stock transaction is valued at $6 billion and shareholders of each company will own 50% of the combined company on a fully diluted equity basis upon closing.
Trump Media highlighted the crucial role that fusion power will play in securing America's AI "dominance and energy security," signaling a driving force behind the merger. It also noted that the transaction will create one of the world's first publicly traded fusion companies.
The company will provide $200 million to TAE after the deal closes. Trump Media has a market cap of about $4.2 billion.
TAE, which is backed by Alphabet, was founded in 1998.
The companies said that the deal will combine Trump Media's "access to significant capital" with TAE's "fusion technology" in order to supply power for the AI industry.
“Trump Media & Technology Group built uncancellable infrastructure to secure free expression online for Americans, and now we’re taking a big step forward toward a revolutionary technology that will cement America’s global energy dominance for generations,” Trump Media CEO Devin Nunes said in a statement.
"Fusion power will be the most dramatic energy breakthrough since the onset of commercial nuclear energy in the 1950s, an innovation that will lower energy prices, boost supply, ensure America’s A.I.-supremacy, revive our manufacturing base and bolster national defense,” Nunes added.
Nunes and Michl Binderbauer, CEO and director of TAE, plan to serve as co-CEOs of the new combined company.
Mixing politics with business
Although the merger of the two companies caught some by surprise, the transaction makes more sense when one sees how the actions of Donald Trump's role as president often blend with his role as a businessman.
Back in October, the US Department of Energy (DOE) released its Fusion Science and Technology (FS&T) Roadmap, which it called “a national strategy to accelerate the development and commercialization of fusion energy on the most rapid, responsible timeline in history.”
The DOE's strategy was tied directly to President Trump's executive order in January called "Unleashing American Energy."
By "accelerating progress toward commercial fusion power, DOE is strengthening America’s grid, rebuilding critical supply chains, and securing a new era of abundant, reliable, American-made energy," the department said.
Similar to quantum computing, fusion power is still an experimental technology that is not expected to reach commercialization until the 2030s, according to the World Economic Forum. Which means that any role it will play in powering AI data centers is still years away.
Trump Media's merger with TAE is essentially a bet on the future. And the DOE, working under President Trump, is trying to accelerate the speed at which that future commercialization gets here, which would in turn benefit Trump Media's combined company with TAE Technologies.
“Our talented team, through its commitment and dedication to science, is poised to solve the immense global challenge of energy scarcity," Binderbauer said in a statement. "At TAE, recent breakthroughs have prepared us to accelerate capital deployment to commercialize our fusion technology."
"We’re excited to identify our first site and begin deploying this revolutionary technology that we expect to fundamentally transform America’s energy supply," he added.
Economist Peter Schiff wasn't impressed with the merger, saying in a post on X that the "only real value that DJT offers an energy company is political leverage."
“$DJT, a company owned by Donald Trump, has little intrinsic value beyond its connection to the President," Schiff said. “It began as a social media company, pivoted into a Bitcoin treasury company, and is now merging with a fusion energy company. The constant reinvention makes clear that the business itself is not the point.”
The companies said that they are planning to begin construction of the world's first utility-scale 50 megawatt electrical (MWe) fusion power plant, pending regulatory approvals. They indicated that future plants will be 350-500 MWe.
The all-stock transaction values each share of the combined company at $53.89, but it's unclear how TAE is being valued since it's a privately held company.
Trump Media's shares, which are down nearly 58% for the year, were priced at $14.86 at the close of trading on Thursday.