By Rahul Meka, Principal, Playground Global
The age of artificial intelligence is here, reshaping industries and expanding what humans can achieve. But this new era comes at a cost. As AI models grow more capable, the data centers that run them are hitting a physical limit: the power wall.
The Data Center’s Power Challenge
The latest generation of AI hardware, like NVIDIA's GB200 which consumes 120 kW in a single system, is pushing power density far beyond the legacy 10-30 kW standard and accelerating the race toward the 1 MW rack. This exponential leap is straining the grid and creating a thermal crisis in the data center. Incumbent power electronics, which convert and manage electricity, are hitting their physical limits, leading to massive energy waste, excess heat, and a critical bottleneck for the future of AI compute.
A Foundational Shift in Power Electronics
To unlock the next phase of AI, we need a fundamentally new way to deliver power. The solution is clearvertical Gallium Nitride (GaN), a breakthrough wide band gap semiconductor that redefines how power is delivered.
That’s why we invested in Vertical Semiconductor, a company founded to transform power delivery for the next era of compute. Today they announced $11 million in funding led by Playground.
Pioneered over eight years of dedicated research at MIT, its technology combines breakthroughs in both device architecture and manufacturability that’s eluded the industry for decades. These advances translate into two core breakthroughs.
- Device architecture allows for higher breakdown voltage, higher switching frequency and stability. This expands the power envelope catering to the evergrowing data center needs.
- CMOS compatibility: Built on the trillion dollar semiconductor logic manufacturing industry, the device is designed for standard, high-volume CMOS foundries, creating a clear path to reliable and cost-effective production.
Their power transistor is the foundation to a step-change in performance, designed to make power delivery efficient, dense, and scalable:
- Unprecedented Efficiency: It cuts power conversion losses by over 35%, meaning more electricity is used for computation and less is wasted as heat.
- Radical Density: It shrinks the physical footprint of power supply equipment by 50%, freeing up invaluable rack space for more GPUs.
The Holy Grail of Power
AI’s power demands have exposed the limits of today’s infrastructure. Meeting that requires more than just tweaks - it requires a new foundation for power itself. Vertical is building that foundation and at Playground we are proud to stand behind co-founders Josh Perozek, Cynthia Liao and Professor Thomas Palacios.
Achieving this combination of efficiency, density, and scalability in high-voltage GaN has long been considered the holy grail of power electronics. It’s a difficult materials science and manufacturing challenge that has stymied the industry for years.
Vertical’s strategy leverages GaN’s superior high-voltage performance to simultaneously reduce conversion steps and increase input voltage across the entire power fabric. The roadmap begins by enabling efficient high-voltage power supply units up to 2000V, drastically cutting energy loss at the source. This enables a streamlined path to the rack, where their high-density devices will power the stages required for conversion from the high-voltage bus directly to the GPU.
Creating a whole new category of power electronics removes one of the most critical bottlenecks to progress in artificial intelligence. The impact is profound: enabling more powerful AI models, creating more sustainable data centers, and accelerating innovation in every field that relies on computation.
The explosive demand from the AI industry has made this breakthrough not just an opportunity, but an urgent necessity. The era of incremental improvements is over. The future of computing requires a revolution in power, and at Playground, we believe that revolution starts now, with Vertical Semiconductor.
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