In 1949 expatriate German Ronald Richter proposed the Huemul Project in Argentina, announcing positive results in 1951. These turned out to be fake, but prompted others' interest. Lyman Spitzer began considering ways to solve problems involved in confining a hot plasma, and, unaware of the Z-pinch efforts, he created the stellarator. Spitzer applied to the US Atomic Energy Commission for funding to build a test device.
During this period, James L. Tuck, who had worked with the UK teams on Z-pinch, had been introducing the stellarator concept to his coworkers at LANL. When he heard of Spitzer's pitch, he applied to build a pinch machine of his own, the Perhapsatron.
Spitzer's idea won funding and he began work under Project Matterhorn. His work led to the creation of Princeton Plasma Physics Laboratory (PPPL). Tuck returned to LANL and arranged local funding to build his machine. By this time it was clear that the pinch machines were afflicted by instability, stalling progress. In 1953, Tuck and others suggested solutions that led to a second series of pinch machines, such as the ZETA and Sceptre devices.
Spitzers first machine, A worked, but his next one, B', suffered from instabilities and plasma leakage.
In 1954 AEC chair Lewis Strauss foresaw electricity as "too cheap to meter". Strauss was likely referring to fusion power, part of the secret Project Sherwood—but his statement was interpreted as referring to fission. The AEC had issued more realistic testimony regarding fission to Congress months before, projecting that "costs can be brought down... [to]... about the same as the cost of electricity from conventional sources..."