Pat Gelsinger wants to save Moore’s Law, with a little help from the Feds

After a tumultuous year that saw him exit Intel, Pat Gelsinger has shifted his focus to the semiconductor sector from a new vantage point as a general partner at Playground Global. His attention is particularly drawn to xLight, a semiconductor startup that recently announced a preliminary agreement with the U.S. Commerce Department for potential funding of up to $150 million, which would see the government take a significant equity stake in the company. This development marks a notable moment for Gelsinger, who dedicated 35 years to Intel and faced challenges in restoring confidence in his turnaround strategies before his departure. The xLight investment also raises eyebrows within Silicon Valley, where the Trump administration's model of taking equity stakes in key companies is stirring up discussions about the future of free enterprise. California Governor Gavin Newsom recently expressed concern over this trend during a speaking engagement, highlighting the tension between governmental involvement and the free-market principles that have long defined the tech landscape. At a recent TechCrunch event, Gelsinger—now serving as xLight’s executive chairman—remained unfazed by the philosophical implications of federal investment. Instead, he is focused on guiding xLight in addressing what he identifies as a critical bottleneck in the semiconductor industry: lithography, the process essential for etching intricate patterns onto silicon wafers. The startup is innovating with powerful free electron lasers, powered by particle accelerators, which could transform chip manufacturing if successful at scale. Gelsinger emphasized his long-term objective to sustain Moore’s Law, the principle stating that computing power should double approximately every two years. He believes xLight's technology could play a pivotal role in this mission, stating, "We think this is the technology that will wake up Moore’s law." This funding initiative represents the first award under the Chips and Science Act during Trump's second term, aimed at fostering early-stage companies with promising technologies. However, the agreement is still in its infancy, described as merely a letter of intent, which means it is not yet finalized. When asked about the possibility of funding exceeding the announced amount or not coming to fruition, Gelsinger acknowledged the preliminary nature of the deal, stating, "We’ve agreed in principle on the terms, but like any of these contracts, there’s still work to get done." xLight's ambitious plans involve constructing machines approximately the size of a football field, designed to sit outside semiconductor fabrication plants. These lasers aim to produce extreme ultraviolet light with unprecedented precision, potentially outclassing current technologies dominated by ASML, a leading player in the lithography market. Gelsinger noted that lithography accounts for a significant portion of semiconductor capital costs, with the ability to innovate shorter wavelength, higher power light being crucial for advancing semiconductor technology. Nicholas Kelez, who leads xLight, brings a unique perspective to the company, having previously directed quantum computing projects and built large-scale X-ray facilities at national laboratories. Kelez explained that the timing is favorable for pursuing this technology now, as the semiconductor industry has matured since ASML abandoned a similar approach nearly a decade ago. The company’s strategy involves treating light generation as a utility, rather than as an integrated component of each machine, aiming to provide scalable solutions that are more powerful. xLight is targeting the production of its first silicon wafers by 2028 and hopes to have its initial commercial system operational by 2029. Despite the ambitious goals, challenges remain, including navigating potential partnerships with established players like ASML. While discussions are ongoing, no formal commitments have been made by Intel or other major chip manufacturers regarding the purchase of xLight’s technology. The competitive landscape is intensifying, with other startups like Substrate entering the fray. Gelsinger views potential collaborations rather than competition, suggesting that a successful Substrate could eventually become a customer for xLight’s innovative solutions. Gelsinger's rapport with the Trump administration has added another layer to the narrative, having introduced xLight to Commerce Secretary Howard Lutnick before securing funding. While some critics question the implications of government involvement in private enterprise, Gelsinger defends it as vital for national competitiveness and innovation. He emphasized the importance of results over ideology, asserting that the U.S. must adopt proactive strategies to maintain its industrial edge. The government’s investment carries minimal constraints, allowing xLight to operate independently while benefiting from federal support. With ongoing fundraising efforts and plans to establish its first machine in New York, xLight represents more than just a business venture for Gelsinger; it's an opportunity to reaffirm his influence in the semiconductor industry he helped shape. As he juggles multiple startups, Gelsinger remains committed to driving technological advancements, even as he navigates the complexities of the current political landscape.