The Commerce Department has agreed to invest as much as $150 million in xLight Inc., a semiconductor startup led by former Intel Corp. CEO Pat Gelsinger, the Trump administration’s latest push to revive domestic chipmaking.
The department’s Chips Research and Development Office signed a nonbinding letter of intent to provide the funding, according to a statement released Monday. The investment would be structured as equity, giving the federal government direct ownership in the company—a first for the Trump administration’s CHIPS Research and Development Office.
The Palo Alto, Calif.-based startup, founded in 2021, is developing free-electron laser technology as an alternative light source for extreme ultraviolet lithography machines, which are essential for producing cutting-edge semiconductors. The technology would compete with components currently supplied to ASML Holding NV, the Dutch company that dominates the EUV lithography market and sources many of its lasers from Germany’s Trumpf.
“For far too long, America ceded the frontier of advanced lithography to others. Under President Trump, those days are over,” Commerce Secretary Howard Lutnick said in a press release. “This partnership would back a technology that can fundamentally rewrite the limits of chipmaking. Best of all, we would be doing it here at home.”
The investment aims to help xLight construct and demonstrate a laser prototype that could advance semiconductor manufacturing and restore Moore’s Law, the principle that the number of transistors on a chip doubles approximately every two years.
Gelsinger, who serves as xLight’s executive chairman, called the opportunity to revive Moore’s Law “once-in-a-generation.” He joined the company in March, months after being ousted from Intel in late 2024 when the board determined his turnaround efforts had not delivered results quickly enough. He is also a general partner at Playground Global, the venture firm that led xLight’s $40 million Series B funding round in July.
The deal extends Washington’s expanding involvement in the chip industry. Earlier this year, the administration acquired roughly a 10% stake in Intel as part of efforts under the CHIPS and Science Act to bring semiconductor manufacturing back to American soil. Intel, now led by CEO Lip-Bu Tan, has been attempting a comeback after falling behind competitors like NVIDIA Corp. in the AI chip race.
Most advanced semiconductors are currently manufactured outside the U.S., primarily by TSMC in Taiwan and Samsung Electronics in South Korea. Intel warned in July that financial constraints could force it to halt development of its next-generation 14A chip, which industry analysts view as critical to U.S. chip manufacturing ambitions.
During his tenure as Intel CEO from 2021 to 2024, Gelsinger became one of the most influential advocates for the 2022 CHIPS Act. In an October interview with CNBC, he acknowledged that Intel “made a set of bad decisions over 15 years” and that technical leadership wasn’t “led by technologists for many years.”
“We were late on AI as well,” he said.
