Vertical Semiconductor, a Massachusetts Institute of Technology (MIT) spinout, has secured $11 million in seed funding led by Playground Global to accelerate the development of its vertical GaN (gallium nitride) transistors, poised to deliver the next generation of power for AI chips in data centers. Other investors include JIMCO Technology Fund, milemark- capital, and Shin-Etsu Chemical.
As AI workloads continue to surge, data centers face growing challenges with power delivery becoming the critical bottleneck. Vertical’s cutting-edge transistors bring energy conversion closer to the chip, drastically reducing power loss and heat. This innovation not only decreases energy waste and infrastructure complexity, but improves efficiency by up to 30% and enables a 50% smaller power footprint in AI data center 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.”
Built on a decade of research at MIT’s Palacios Group – a world-leading gallium nitride (GaN) research lab, Vertical’s breakthrough transistors use GaN, a material that makes power systems more efficient and power dense than silicon. When combined with a novel vertical architecture, it makes it easier, faster and more efficient to get power from the source to the chip. Vertical Semiconductor has demonstrated the technology on 8-inch wafers using standard silicon CMOS semiconductor manufacturing methods, enabling seamless integration with existing process technology and making it ready for real-world deployment for devices from 100 volts to 1.2kV.
“The Vertical team has cracked a challenge that’s stymied the industry for years: how to deliver high voltage and 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.”
With a prototype in development and commercial milestones ahead, the company plans to start early sampling for its first prototype packaged devices by the end of the year and a fully integrated solution in 2026.
