Vertical Semiconductor Raises $11 Million to Power the Next Generation of AI Chips and Data Centers
Vertical Semiconductor (“Vertical”), a cutting-edge semiconductor company spun out of the Massachusetts Institute of Technology (MIT), today announced it has secured $11 million in seed funding to accelerate the development of vertical gallium nitride (GaN) transistors, a breakthrough technology designed to power the next generation of AI chips in data centers. Playground Global led the funding round, with participation from JIMCO Technology Ventures, milemark•capital, and Shin-Etsu Chemical.
The exponential growth in AI workloads has placed unprecedented demands on data center infrastructure, making power delivery a critical bottleneck for the next generation of computing. Vertical’s innovative vertical GaN transistors are designed to address this challenge by delivering power closer to the chip, significantly reducing energy loss and heat generation. This approach not only enhances efficiency but also simplifies data center infrastructure, improving power conversion efficiency by up to 30% and allowing for up to 50% smaller power footprints in AI server racks.
“The pace of AI is not only limited by algorithms. The most significant bottleneck in AI hardware is how fast we can deliver power to the silicon,” said Cynthia Liao, CEO and co-founder of Vertical. “We’re not just improving efficiency; we’re enabling the next wave of innovation by rewriting how electricity is delivered in data centers at scale.”
Vertical Semiconductor’s technology builds on over a decade of research at MIT’s Palacios Group, a globally recognized GaN research lab. By leveraging GaN, a semiconductor material that is more power-dense and efficient than traditional silicon, and combining it with a novel vertical transistor architecture, Vertical has created a solution that delivers power faster, more efficiently, and with lower heat dissipation. This advancement is especially crucial for high-performance AI workloads that demand both high power and high efficiency.
A key advantage of Vertical’s approach is its compatibility with standard silicon CMOS manufacturing methods. The company has successfully demonstrated its vertical GaN transistors on 8-inch wafers, ensuring seamless integration with existing semiconductor fabrication processes. This compatibility not only accelerates the path to commercialization but also makes the technology suitable for a wide range of applications, supporting devices operating from 100 volts to 1.2kV.
“The Vertical team has cracked a challenge that has stymied the industry for years: how to deliver high-voltage, high-efficiency power electronics with a scalable, manufacturable solution,” said Matt Hershenson, Venture Partner at Playground Global. “They’re not just advancing the science; they’re changing the economics of compute.”
Vertical’s vertical GaN transistors enable a new paradigm in power delivery, where energy can be converted closer to where it is consumed on the chip. This proximity reduces energy loss and heat, two of the most significant constraints in high-performance computing today. By increasing efficiency and shrinking the size of power infrastructure, Vertical’s technology makes AI data centers more sustainable and cost-effective while providing the necessary power density to support increasingly complex workloads.
With its prototype already under development, Vertical Semiconductor plans to begin early sampling of its first packaged devices by the end of the year. The company is targeting a fully integrated solution in 2026, positioning itself to play a pivotal role in the next wave of AI and high-performance computing. As AI adoption continues to accelerate globally, Vertical’s technology promises to be a critical enabler for data centers striving to meet the demands of future workloads while maintaining efficiency, scalability, and economic viability.
By combining MIT’s foundational research with industry-focused engineering and manufacturing expertise, Vertical Semiconductor is poised to transform the way power is delivered in high-performance computing environments. The company’s vertical GaN transistors represent not only a technical breakthrough but also a strategic leap forward for the AI and data center ecosystem, unlocking new possibilities for energy-efficient, high-performance computing at scale.
