pat gelsinger wants to save moore’s law, with a little help from the feds

Pat Gelsinger's New Venture: Reviving Moore's Law with Federal Backing

One year following his departure from Intel, Pat Gelsinger maintains a rigorous schedule, rising at 4 a.m. and remaining deeply involved in the ongoing semiconductor industry competition – albeit from a different position. Currently serving as a general partner at venture firm Playground Global, he oversees a portfolio of 10 startups.

Focus on xLight and a $150 Million Deal

Among these ventures, xLight, a semiconductor startup, has garnered significant attention. Last Monday, the company announced a preliminary agreement for up to $150 million in funding from the U.S. Commerce Department, potentially making the government a substantial shareholder.

This development represents a notable achievement for Gelsinger, who dedicated 35 years to Intel across two tenures before being removed from his position late last year due to concerns regarding his turnaround strategies. However, the xLight deal is also highlighting a trend that is causing some unease within Silicon Valley: the U.S. government acquiring equity stakes in companies deemed strategically important.

Concerns over Government Intervention

“What has become of free enterprise?” questioned California Governor Gavin Newsom during a recent public address, reflecting the growing apprehension within an industry traditionally committed to free-market principles.

xLight's Technology: A Potential Breakthrough in Lithography

Speaking at a TechCrunch event hosted by Playground Global, Gelsinger – who serves as xLight’s executive chairman – appeared unfazed by the philosophical debate. His primary focus is on his belief that xLight can address the semiconductor industry’s most significant challenge: lithography, the intricate process of etching microscopic patterns onto silicon wafers.

The startup is developing large-scale “free electron lasers” powered by particle accelerators, a technology that could fundamentally change chip manufacturing. The success of this technology, however, remains contingent on its scalability.

“My long-term goal is to ensure the continuation of Moore’s Law within the semiconductor industry,” Gelsinger stated, referencing the principle that computing power should double approximately every two years. “We believe this technology holds the key to revitalizing Moore’s Law.”

The Chips and Science Act and Deal Details

The xLight deal marks the inaugural award under the Chips and Science Act during the Trump administration, utilizing funds allocated to early-stage companies with promising technologies. It’s important to note that the agreement is currently at the letter of intent stage, meaning it is not yet finalized and details are subject to change.

When questioned about the possibility of the funding doubling or potentially falling through, Gelsinger acknowledged the uncertainty. “We have reached a preliminary agreement on the terms, but as with any contract of this nature, further work is required for completion,” he explained.

Scale and Ambition of xLight’s Technology

The technology being pursued by xLight is ambitious in both its scope and scale. The company intends to construct machines approximately 100 meters by 50 meters – comparable in size to a football field – to be located outside semiconductor fabrication plants.

These free electron lasers would generate extreme ultraviolet light at wavelengths as precise as 2 nanometers, significantly exceeding the 13.5 nanometer wavelengths currently utilized by ASML, the dominant force in EUV lithography.

“Roughly half of all capital within the semiconductor industry is dedicated to lithography,” Gelsinger clarified. “At the heart of a lithography machine lies light… and the ability to continually innovate with shorter wavelengths and higher power light is crucial for advancing semiconductor innovation.”

Leadership and Expertise

Leading xLight is Nicholas Kelez, whose background is atypical for the semiconductor sector. Prior to founding xLight, Kelez spearheaded quantum computer development at PsiQuantum (also a Playground Global portfolio company) and spent two decades constructing large-scale X-ray science facilities at national laboratories, including SLAC and Lawrence Berkeley, where he served as Chief Engineer for the Linac Coherent Light Source.

Why Now? A Shift in Timing and Technology

The question arises: why is this approach viable now, when ASML abandoned a similar strategy nearly a decade ago? “The primary difference lies in the maturity of the technology,” explained Kelez, speaking alongside Gelsinger at the event. At that time, only a limited number of extreme ultraviolet lithography (EUV) machines existed, and the industry had already invested billions in the existing technology. “The timing was not right to pursue a completely new and orthogonal approach.”

Currently, with EUV technology widely adopted in leading-edge semiconductor manufacturing and existing light source technology reaching its limits, the timing appears more favorable. According to Kelez, the key innovation involves treating light as a utility rather than integrating it into each machine.

“We are moving away from building an integrated light source with the tool, which is the current approach taken by [ASML], and which inherently limits its size and power,” he stated. “Instead, we treat light in the same manner as electrical power or HVAC – we build it at utility scale outside the fabrication plant and then distribute it.”

Timeline and Future Plans

The company aims to produce its first silicon wafers by 2028 and have its first commercial system operational by 2029.

Collaboration with ASML and Competition

There are challenges ahead, but direct competition with ASML does not appear to be an immediate concern. “We are collaborating closely with them to design the integration of our technology with ASML scanners,” Kelez said. “We are also working with their suppliers, such as Zeiss, who provides their optics.”

When asked if Intel or other major chipmakers have committed to purchasing xLight’s technology, Gelsinger responded that no commitments have been made. “No one has committed yet, but discussions are underway with all the expected players,” he said.

The competitive landscape is also evolving. In October, Substrate – a semiconductor manufacturing startup backed by Peter Thiel – announced a $100 million funding round to develop U.S. chip fabs, including an EUV tool with similarities to xLight’s approach. Gelsinger does not view them as direct competitors, however. “If Substrate is successful, they could become a customer for us,” he suggested, noting that Substrate is focused on building a complete lithography scanner that would ultimately require a free electron laser, which is precisely what xLight is developing.

Gelsinger’s Relationship with the Trump Administration

Gelsinger’s connection with the Trump administration adds another dimension to the story. He initially discussed xLight with Commerce Secretary Howard Lutnick in February, prior to Playground’s funding of the startup and Lutnick’s confirmation. Kelez stated that he had been pitching xLight to the government for over a year as a means to revitalize chip manufacturing in the U.S., but the new arrangement has drawn criticism from those who perceive the administration’s involvement as overreach.

Gelsinger remains resolute, framing it as essential for national competitiveness. “I evaluate success based on results,” he said. “Does it achieve the desired outcomes and reinvigorate our industrial policies? Many of our competitor nations do not engage in such debates; they are proactively implementing policies to achieve their competitive goals.”

He cited energy policy as a parallel example. “How many nuclear reactors are currently being built in the U.S.? Zero. How many are under construction in China? 39. Energy policy in a digital AI economy equates to the economic capacity of a nation.”

Government Stake and Future Fundraising

For xLight, the government investment comes with minimal restrictions. The Commerce Department will not have veto rights or a board seat, according to Kelez. “There are no information rights, nothing,” Gelsinger added. “It’s a minority investment without governing authority, but it signifies the national interest in the success of this company.”

xLight has already raised $40 million from investors, including Playground Global, and is planning another fundraising round next month, in January. Kelez noted that their funding needs are more manageable compared to startups in fields like fusion or quantum computing. “This is not fusion or quantum,” he said. “We do not require billions.”

The company has also signed a letter of intent to build its first machine at the New York CREATE site near Albany, though this agreement also requires finalization.

Gelsinger’s Vision and Legacy

For Gelsinger, xLight represents more than just another portfolio company. It’s an opportunity to solidify his influence in the semiconductor industry he helped shape, even if his methods challenge Silicon Valley’s conventional norms.

When asked about balancing his principles in the current political climate, Gelsinger adopted a more pragmatic view of corporate leadership – one where funding originates from the U.S. government, administrations are transient, and CEOs must remain impartial.

“CEOs and companies should not align with either the Republican or Democrat party,” he said. “Your objective is to achieve business goals, serve your investors, and serve your shareholders. As a result, you must be able to identify policies that are beneficial regardless of political affiliation and navigate them accordingly.”

He concluded by stating that the $150 million from the Trump administration would be a sound investment for taxpayers.

When questioned about whether overseeing 10 startups is sufficient for someone with his experience leading Intel, Gelsinger was emphatic. “Absolutely. I can now influence a wide range of technologies – I am fundamentally a deep tech person. My mind is stretched here, and I am grateful that the Playground team would have me join them and let me make them smarter and be a rookie venture capitalist.”

He paused, then added with a smile: “And I gave my wife back her weekends.”

While a welcome change, those familiar with Gelsinger’s work ethic may question how long this arrangement will last.