MIT spinout Vertical Semiconductor raises $11 million for AI power chip tech
Vertical Semiconductor co-founders Josh Perozek, Cynthia Liao and Tomas Palacios pose for a photo, in an undated handout image taken at an unknown location. Vertical Semiconductor/Handout via REUTERS
(Corrects spelling of Matt Hershenson's name in paragraph 4)
By Stephen Nellis
SAN FRANCISCO :Vertical Semiconductor, a startup spun out of the Massachusetts Institute of Technology, on Wednesday said it raised $11 million in funding to commercialize chip technology that can deliver electricity to artificial intelligence servers more efficiently.
Vertical makes chips out of a material called gallium nitride, an alternative to silicon which is becoming central to an effort led by chip designer Nvidia to rework auxiliary chips inside AI data centers to direct electricity and convert it into the form needed by Nvidia's chips.
Those data centers currently consume as much power as some cities. However, when converting huge voltages from power stations to the tiny voltages needed by microchips, much of that electricity simply generates heat. That has spurred a frenzy of investment and interest in reducing that loss.
"That is power you are not delivering to (computing tasks) - it straight turns into heat," Matt Hershenson, a partner with Playground Global, the venture capital firm that led the funding round, said in an interview.
Established chipmakers such as Renesas, Infineon and Power Integrations are all working with Nvidia to develop power chips made of gallium nitride, known as "GaN" in the chip industry, for AI data centers.
But Vertical, which plans to deliver prototypes this year and to deliver chips next year, has a different approach that it hopes will make its chips smaller and cooler.
On most existing GaN chips, the transistors - the fundamental building blocks of chips - are laid out horizontally. Vertical, as its name suggests, stacks the parts of the transistor on top of one another, leading to more compact chips.
The approach came out of work at MIT led by Tomas Palacios, a professor at the school who co-founded the firm, and developed by Joshua Perozek, whose doctoral research focused on the technology.
Cynthia Liao, who joined as CEO from MIT's Sloan School of Management, said the startup hopes to compete against established players by offering better cost savings to data center owners over time than more established technologies.
"We do believe we offer a compelling next-generation solution that is not just a couple of percentage points here and there, but actually a step-wise transformation," Liao said in an interview.
