In a deal that is believed to be the first commercial agreement for fusion power, the tech giant has agreed to purchase electricity from startup Helion Energy within about five years.

Helion is backed by OpenAI founder Sam Altman and is committed to start producing electricity through fusion by 2028 and target power generation for Microsoft of at least 50 megawatts after a year or pay financial penalties. The commitment is a bold one given that neither Helion nor anyone else in the world has yet produced electricity from fusion.

Microsoft President Brad Smith said that Vole would not have entered into the agreement if it did not think Helion could deliver.

Fusion powers the sun and stars and has the potential to provide nearly limitless amounts of carbon-free power if someone can harness it on Earth.

The International Atomic Energy Agency expects electricity from fusion to be produced in the second half of the century. Helion is building a prototype that it says will demonstrate the ability to produce electricity through fusion next year.

Altman said that the goal is not to make the world's coolest technology demo but power the world and to do it extremely cheaply.

He said that having a first customer was critical for keeping Helion grounded in the realities of business, including working with clients, utilities, and electric-grid operators.