Pat Gelsinger may have departed Intel after 35 years, but the semiconductor veteran hasn’t slowed down. Rising at 4 a.m. daily, he’s now channeling his expertise into venture capital as a general partner at Playground Global, where one particular portfolio company has captured his strategic focus: xLight.
The semiconductor startup recently secured a preliminary $150 million deal from the U.S. Commerce Department—with the government poised to become a significant shareholder. This development represents both a personal vindication for Gelsinger following his Intel exit and highlights a controversial shift in American industrial policy.
The Technology Revolution Behind xLight
As xLight’s executive chairman, Gelsinger is betting on solving what he identifies as the semiconductor industry’s critical bottleneck: lithography—the process that etches microscopic patterns onto silicon wafers. The company is developing massive ‘free electron lasers’ powered by particle accelerators that could fundamentally transform chip manufacturing.
‘We think this is the technology that will wake up Moore’s law,’ Gelsinger explained during a recent TechCrunch event at Playground Global, referencing the principle that computing power should double approximately every two years—a progression that has slowed in recent years.
The technical breakthrough centers on generating extreme ultraviolet light at wavelengths as precise as 2 nanometers—significantly more powerful than the current 13.5 nanometer standard used by ASML, the Dutch company that dominates the EUV lithography market. This advancement could enable the next generation of semiconductor fabrication.
Government Investment Sparks Silicon Valley Debate
The xLight deal marks the first Chips and Science Act award under Trump’s second term, specifically targeting early-stage companies with promising technologies. While currently at the letter of intent stage, the arrangement has ignited discussion about government involvement in private enterprise.
‘What the hell happened to free enterprise?’ California Governor Gavin Newsom publicly questioned, reflecting broader concerns in Silicon Valley about departing from the industry’s traditional free-market principles.
Gelsinger appears unmoved by these philosophical objections. ‘I measure it by the results,’ he stated, framing government participation as necessary for national competitiveness. ‘Does it drive the results that we want and that we need to reinvigorate our industrial policies? Many of our competitive countries don’t have such debates.’
The Commerce Department’s stake reportedly comes with minimal oversight—no veto rights, board seat, or special information access. ‘It’s a minority investment, in a non-governing way, but it also says we need this company to succeed for national interest,’ Gelsinger explained.
xLight’s Technical Approach and Timeline
Leading xLight is Nicholas Kelez, whose background spans quantum computing and large-scale X-ray science facilities at national laboratories. The company’s approach differs significantly from previous attempts at similar technology.
‘The difference was the technology wasn’t as mature,’ Kelez explained regarding why ASML abandoned a similar approach nearly a decade ago. The key innovation lies in treating light as a utility rather than integrating it into each machine.
‘We go away from building an integrated light source with the tool, which is what [ASML does] now and that fundamentally constrains you to make it smaller and less powerful,’ Kelez said. ‘We treat light the same way you treat electrical power or HVAC. We build outside the fab at utility scale and then distribute in.’
These machines would be enormous—approximately 100 by 50 meters, roughly the size of a football field—positioned outside semiconductor fabrication plants. The company aims to produce its first silicon wafers by 2028 and have its first commercial system operational by 2029.
Competitive Landscape and Industry Partnerships
Despite the ambitious technology, xLight isn’t positioning itself as a direct competitor to ASML. ‘We’re working very closely with them to basically design how we integrate with an ASML scanner,’ Kelez noted. ‘So we’re working with both them, as well as their providers, [like] Zeiss, who does their optics.’
When questioned about potential competition from Peter Thiel-backed Substrate—which recently raised $100 million to develop U.S. chip fabs, including EUV tools—Gelsinger suggested complementary roles: ‘If Substrate is successful, they could be a customer for us.’ He explained that Substrate focuses on building full-stack lithography scanners that would ultimately require free electron lasers—precisely what xLight is developing.
Though major chipmakers haven’t yet committed to purchasing xLight’s technology, Gelsinger indicated active discussions: ‘Nobody has committed yet, but the work is going on with everybody on the list that you would expect, and we’re having intense conversations with all of them.’
Gelsinger’s Second Act
For Gelsinger personally, xLight represents more than just another venture investment. It offers an opportunity to maintain his semiconductor industry influence after his Intel departure. The company has raised $40 million from investors including Playground Global and plans another fundraising round in early 2024.
Unlike some deep tech startups requiring billions in capital, Kelez maintains that xLight’s path is more financially manageable: ‘This is not fusion or quantum. We don’t need billions.’ The company has also signed a preliminary agreement with New York to build its first machine at the CREATE site near Albany.
When asked if working across 10 startups provides enough challenge for someone who previously led Intel, Gelsinger responded enthusiastically: ‘Absolutely. The idea that I can now influence across such a wide range of technologies—I’m a deep tech guy at the core of who I am. My mind is so stretched here.’
He added with a smile, ‘And I gave my wife back her weekends’—though given his reputation as a workaholic, one might question how long that arrangement will last.