The project was announced in 2014. The name and design were inspired by the fictional arc reactor built by Tony Stark, who attended MIT in the comic books.
The concept was born as "a project undertaken by a group of MIT students in a fusion design course. The ARC design was intended to show the capabilities of the new magnet technology by developing a point design for a plant producing as much fusion power as ITER at the smallest possible size. The result was a machine about half the linear dimension of ITER, running at 9 tesla and producing more than 500 megawatt (MW) of fusion power. The students also looked at technologies that would allow such a device to operate in steady state and produce more than  of electricity."