Vertical Semiconductor signs $73m CHIPS letter with Commerce stake

Vertical Semiconductor signed a letter of intent with the US Department of Commerce for up to $73 million in CHIPS funding, with Commerce taking a minority, non-controlling and non-voting equity stake, Data Center Dynamics reported.

The funding will support domestic development and production of vertical gallium nitride power transistors aimed at AI power infrastructure and high-performance computing. GaN handles more power than silicon, and the vertical design pushes current through the substrate instead of across its surface, raising voltage capacity without enlarging a chip's footprint.

Allocators underwriting the AI power chain are taking early-stage hardware risk, not contracted data-center cash flow, because this is R&D-stage funding for a 2024 company with a non-controlling and non-voting government stake. The concrete due-diligence question is where the next round of capital comes from and how Commerce's minority stake ranks alongside private holders.

Vertical is an MIT spin-out co-founded in 2024 by CEO Cynthia Liao, Josh Perozek and Tomas Palacios. The company said commercial partners will produce what it calls a first-of-its-kind 2.5MW AI rack that cuts energy losses by 30%, shrinks physical footprint by 50% and converts otherwise wasted electricity into compute capacity. “Power is the most significant bottleneck in the build-out of AI infrastructure,” Liao said in a statement. She said the CHIPS R&D award will accelerate research and commercialization.

Data Center Dynamics also reported Oct. 23 that Commerce signed $389 million in power-semiconductor R&D letters of intent, including up to $175 million for Helion and up to $85 million for Commonwealth Fusion Systems. A letter of intent is not a completed award.