Pat Gelsinger is aiming to preserve Moore’s Law, seeking some assistance from the federal government

Pat Gelsinger’s Next Act: Championing xLight in the Semiconductor Race

Since departing Intel a year ago, Pat Gelsinger continues to rise before dawn, remaining deeply involved in the semiconductor sector—though now from a different vantage point. As a general partner at Playground Global, he’s advising a portfolio of ten startups. Among them, xLight, a semiconductor innovator, has become his primary focus. Last week, xLight revealed a preliminary agreement with the U.S. Commerce Department for up to $150 million in funding, which would make the government a significant shareholder.

This development marks a notable achievement for Gelsinger, who dedicated 35 years to Intel before being ousted by the board over doubts about his turnaround strategy. The xLight deal, however, is also drawing attention to a growing unease in Silicon Valley: the Trump administration’s increasing involvement as an equity holder in strategically vital tech companies.

“What happened to free enterprise?” California Governor Gavin Newsom questioned at a recent event, echoing the discomfort felt by many in an industry long defined by its commitment to open markets.

At a TechCrunch StrictlyVC event hosted at Playground Global, Gelsinger—now executive chairman of xLight—appeared unfazed by the ideological debate. His focus is on xLight’s potential to address what he considers the semiconductor industry’s most pressing challenge: lithography, the process of imprinting intricate patterns onto silicon wafers. xLight is developing enormous “free electron lasers” powered by particle accelerators, a technology that could transform chip manufacturing—if it can be scaled successfully.

“My long-term goal is to keep Moore’s law alive in semiconductors,” Gelsinger explained, referencing the principle that computing power should double every two years. “We believe this technology could reignite Moore’s law.”

Government Investment and Industry Disruption

The xLight agreement is the first award from the Chips and Science Act during Trump’s second term, targeting early-stage companies with breakthrough technologies. The deal is currently at the letter of intent stage, so terms are not yet final and could change. When asked if the funding might increase—or fall through—Gelsinger was straightforward: “We’ve reached a preliminary understanding, but there’s still work ahead before it’s official.”

Ambitious Technology and a New Approach

xLight’s vision is bold in both scale and ambition. The company aims to construct machines about the size of a football field—100 by 50 meters—to be installed outside chip fabrication plants. These free electron lasers would produce extreme ultraviolet light at wavelengths as short as 2 nanometers, far surpassing the 13.5-nanometer standard used by ASML, the dominant player in EUV lithography.

“Roughly half of all capital in the semiconductor industry goes into lithography,” Gelsinger noted. “At the heart of every lithography machine is light, and the ability to innovate with shorter, more powerful wavelengths is crucial for advancing chip technology.”

Leadership with a Unique Background

xLight is led by Nicholas Kelez, whose experience is atypical for the semiconductor field. Before founding xLight, Kelez spearheaded quantum computing projects at PsiQuantum and spent two decades developing large-scale X-ray facilities at national labs like SLAC and Lawrence Berkeley, where he served as Chief Engineer for the Linac Coherent Light Source.

Why Now? Timing and Technological Readiness

Why is this approach feasible today, when ASML abandoned similar efforts nearly ten years ago? Kelez explained that the technology simply wasn’t mature enough back then, and the industry had already invested heavily in existing solutions. “It wasn’t the right moment to pursue something entirely new,” he said.

With EUV now standard in advanced chipmaking and current light source technologies reaching their limits, the timing is better. Kelez’s key innovation is to treat light as a utility, generated outside the fab and distributed in, rather than integrating it into each machine. “This allows us to build larger, more powerful systems, unconstrained by the need to miniaturize,” he said.

The company targets producing its first silicon wafers by 2028 and aims to have its initial commercial system operational by 2029.

Collaborating with Industry Leaders

Despite the ambitious goals, xLight is not positioning itself as a direct competitor to ASML. “We’re collaborating closely with ASML and their partners, such as Zeiss, to ensure our technology integrates seamlessly with existing scanners,” Kelez shared.

As for customer commitments, Gelsinger admitted that no major chipmakers, including Intel, have signed on yet. “No one has made a firm commitment, but we’re in active discussions with all the key players,” he said.

Rising Competition and Strategic Partnerships

The competitive landscape is intensifying. In October, Substrate, a semiconductor startup backed by Peter Thiel, announced a $100 million raise to develop U.S. chip fabs, including an EUV tool similar to xLight’s concept. Gelsinger doesn’t view them as rivals, however. “If Substrate succeeds, they could become our customer, since they’ll need a free electron laser like the one we’re building,” he explained.

Government Involvement: A New Paradigm

Gelsinger’s ties to the Trump administration add another dimension. He first mentioned xLight to Commerce Secretary Howard Lutnick in February, before Playground invested and before Lutnick’s confirmation. Kelez had already spent over a year pitching xLight as a way to bolster U.S. chip manufacturing. While some critics see the government’s equity stake as overreach, Gelsinger defends it as essential for national competitiveness. “I judge by outcomes,” he said. “If this helps revitalize our industrial policy, it’s worth it. Other countries aren’t debating—they’re acting to secure their competitive edge.”

He cited energy policy as another example: “The U.S. isn’t building any new nuclear reactors, while China is constructing 39. In a digital, AI-driven economy, energy policy directly impacts national economic strength.”

Terms of the Government Investment

According to Kelez, the Commerce Department’s stake in xLight comes with minimal oversight—no board seat, no veto power, and no information rights. “It’s a minority, non-controlling investment, but it signals the importance of xLight’s success for national interests,” Gelsinger added.

xLight has already secured $40 million from investors such as Playground Global and plans another fundraising round next month. Unlike fusion or quantum startups that require massive capital, Kelez said xLight’s financial needs are much more modest. “We don’t need billions,” he emphasized.

The company has also signed a letter of intent with New York to build its first machine at the CREATE site near Albany, though this agreement is still being finalized.

Gelsinger’s Personal Commitment

For Gelsinger, xLight is more than just another investment—it’s an opportunity to reinforce his legacy in the semiconductor world, even if it means challenging Silicon Valley’s traditional values.

Asked how he balances his principles in today’s political climate, Gelsinger took a pragmatic stance: “CEOs and companies shouldn’t align with any political party. Our responsibility is to achieve business goals and serve our stakeholders. That means navigating whichever policies—Republican or Democrat—best support our objectives.”

On the $150 million from the Trump administration, he added, “Taxpayers will benefit.”

Life After Intel

When questioned if overseeing ten startups is enough for someone who once led Intel, Gelsinger was enthusiastic: “Absolutely. I now get to influence a wide spectrum of technologies. I’m a deep tech person at heart, and this role stretches my mind. I’m grateful to the Playground team for letting me join and contribute as a rookie venture capitalist.”

He paused and smiled, “And I’ve finally given my wife her weekends back.”

Still, those familiar with Gelsinger’s tireless work ethic may wonder how long that will last.