MIT spinout debuts vertical GaN power conversion technology designed to dramatically reduce heat, shrink the footprint of power systems, and lower energy costs in AI infrastructure

Vertical Semiconductor (Vertical), a semiconductor company spun out of the Massachusetts Institute of Technology (MIT), today announced $11 million in seed funding led by Playground Global to help accelerate development of vertical GaN (gallium nitride) transistors, the next wave of power for AI chips in data centers. Additional investors include JIMCO Technology Ventures, milemark•capital, and Shin-Etsu Chemical.

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Founders of MIT-spinout Vertical Semiconductor: Dr. Josh Perozek, Cynthia Liao, and Professor Tomás Palacios.

The surge of AI workloads is straining data centers, and power delivery has become the critical bottleneck. The company’s vertical GaN transistors ease that bottleneck by pushing energy conversion closer to the chip with less power loss and heat, which is critical for powering the future of compute. This breakthrough reduces energy loss, cuts heat, and simplifies infrastructure, improving efficiency by up to 30% and enabling 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.

About Vertical Semiconductor

Vertical Semiconductor is reinventing power conversion for modern computing infrastructure. Spun out of MIT and backed by Playground Global, the company has developed a scalable transistor platform that enables direct, high-efficiency power conversion-- cutting energy loss, reducing heat, and unlocking new performance in AI data centers. As power delivery becomes a critical bottleneck at scale, Vertical is building the foundational electrical layer for the next era of compute. Learn more at www.verticalsemi.com or follow us on LinkedIn.

About Playground Global

Playground Global is a deep tech venture capital firm with $1.2 billion under management, backing early-stage startups tackling foundational challenges in next-generation compute, automation, energy transition, and engineered biology. Founded in 2015 and based in Palo Alto, Playground partners closely with technical and scientific founders to turn breakthrough ideas into enduring companies. The firm’s portfolio includes PsiQuantum, MosaicML (acquired by Databricks), d-Matrix, Agility Robotics, Ideon, Ultima Genomics, and Strand Therapeutics. Learn more at www.playground.vc.

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"We’re enabling the next wave of innovation by rewriting how electricity is delivered in data centers at scale." -- Cynthia Liao, CEO and co-founder, Vertical Semiconductor