From Gems to Tech: How Lab-Grown Diamonds Are Powering AI Cooling, Quantum Sensing & Defense | EEHERALD

Srinivas: I’ve seen your profile—the diamond background, all the way from gems to industry-grade and tech-grade diamonds. I’ve also learned a bit about your previous company and the present one, Lattispec. Welcome to the talk.

You spent two decades studying lab-grown gem diamonds for the jewelry trade before Lattispec. What was the moment you realized that the same underlying technology had applications in electronics and defense? What was the shock of going from diamonds for rings to diamonds for technology?

Marty: Thank you for having us on today. We appreciate it.

Literally in 2004 was when we first started working with lab-grown diamonds for the gem sector. The technology itself goes back to the 1950s, believe it or not. But 2004 was the first year they could grow a one-carat white diamond suitable for gem quality—suitable to be sold in a jewelry store.

Within just a few years, the growing technology spread throughout the world. Nobody realized how quickly it would happen, but it did, with growers particularly in India becoming the leaders in gem diamond production. Consumer acceptance grew at the same time. Demand was huge and very organic—nobody was marketing it to consumers. It happened organically.

But the supply chain constricted because suddenly everyone was growing it. It became very competitive, and margins in the supply chain really shrank.

About three years ago, around 2023, we looked at the physical and scientific properties of diamond as a material. We told the growers—who were all our clients at the time—“You have to diversify your revenue stream. You cannot survive just selling gem material. You have to go into other sectors that are already using this material or that could use it if they knew what was available.”

So we started introducing the gem diamond growers to technology customers. We were shocked at how much interest there was. Many of them, particularly in some early fields, were quite interested. They had no idea how diamond growing had reduced the pricing and increased the availability of diamonds for technical material.

At that point, when we started doing matchmaking between growers and tech product developers, we saw that this was a gigantic business that would far outscale the gem business in terms of potential use.

Srinivas: So the opportunity became clear around 2004?

Marty: We saw the possibilities then. Gem was certainly a new possibility at that time. But semiconductor usage, quantum computers—some of these applications hadn’t even been developed in 2004. It wasn’t until about three years ago that an onslaught of technical applications really evolved.

Srinivas: I’ve seen the application of gold and silver in the electronics industry myself—people use them extensively. Diamond has been talked about, and we already use silicon carbide extensively, which has properties very close to diamond and is very popular now. So looking at it, diamond feels like a natural next progression.

In your report, you pointed out radar as one of the big markets, and AI data-center cooling as another major one right now. You’re essentially putting them in a race by 2030. Why did you pick these two as the hot topics? And from your knowledge, which one will be the main driver by 2030—will it be neck-and-neck, or will AI overtake radar?

Marty: From our perspective, the most powerful growth area right now is AI cooling of data-center servers. This is in the news regularly because these data centers are becoming massive users of energy, both for computing and for cooling. That’s probably not sustainable—there’s a big controversy about it in the U.S. and globally.

The use of diamonds—particularly polycrystalline diamonds, and eventually single-crystal diamonds—to both enhance computing power and reduce thermal challenges within the servers themselves is a very hot topic right now (excuse the pun). This is the biggest demand at the moment.

The defense sector is similarly gigantic because of the level of research being done in areas like quantum magnetometry based on diamond. There are some extremely innovative things happening in that space that defense sectors all over the world, including India, are very interested in.

Srinivas: People thought AI might be a bubble—some worried about the huge power demand and sustainability. But the growth is very much there. Silicon has essentially become like gold. Nobody is going to stop this AI wave in the next six months, and Edge AI is another big opportunity coming. So I agree—AI is going to be a really strong driver for some years at least.

I didn’t know much about the radar market, so it’s good you brought that up—it’s also going to be interesting.

You pointed out a volume-weighted price of around $1,900 rather than the catalog price of around $3,000. What do you think prices will do over the next two to five years? What’s your latest estimation for the average prices of the diamonds you listed in your analysis?

Marty: We tried to be very conservative in the pricing measurements we used. But in fact—and Liz can speak to this also—demand is far outstripping supply capabilities. That’s the most significant factor related to pricing.

Yes, over a decade the unit price will come down, unquestionably. But right now, many of these industries are in their infancy—particularly quantum sensing and magnetometry, but also quantum computing. What’s lacking are growers who have the technical and PhD-level expertise on staff to grow material to these very technical specifications.

The demand we’re seeing—the inquiries we get every day from technology product developers—is significant. The growers capable of fulfilling that demand are lagging behind.

I think we were actually very conservative in the pricing we listed in the report so as not to overestimate the potential return. What’s really happening right now is that prices are scaling up because demand is so great.

Liz, would you agree?

Liz: I would agree with that. Also, not all of the usages have even been defined yet. Even while writing the report, we had to take into account the potential diamond still has that’s, as they say, “on the drawing board”—things nobody is actively doing right now. There are a lot of potential applications that haven’t even surfaced.

Taking all of that into account, I think usage will go up. In some categories, price will start coming down. And when areas like defense start designing for diamond from the outset—instead of trying to use diamond to replace parts of a configuration that aren’t working well—we’ll see a lot more use of diamond.

Srinivas: You have a good view of the supply-side capability. Can you briefly touch on whether future demand can be met by present supply? Do they have the ability to scale as demand comes in?

Liz: The real crown here belongs to India. Our history has been very intertwined with India since the 1990s, so we know the Indian capability—what the diamond cutting and polishing industry could do.

Now, with the backing of the Indian government supporting technology, electronics, defense, semiconductors, and so on, I think India is going to become the source for many tech-diamond applications.

By the way—tech diamond—here’s a small substrate [holds up sample]. These are already coming from India. Thousands of units are being produced, but frankly we need millions of units.

Srinivas: I knew a little about India’s role, but I didn’t realize it was one of the best sources—good that you brought that up.

I’m very much into electronics and semiconductors. We study gallium nitride and silicon carbide for their thermal, electrical, and optical properties. Thermal looks especially interesting for diamond. Can you touch on the thermal, electrical, and optical properties that make diamond so effective for electronics and semiconductors? Do you have any technical background to share on that? If not, we can skip it.

Liz: What I tell engineers and product developers is that diamond has unique properties they’re not used to. For example, in thermal conductivity: diamond doesn’t melt, it doesn’t freeze, it doesn’t expand or contract, and it doesn’t wear out like other materials. It’s truly unique.

If they start with that in mind and design around it, they find they can build and design things faster and smaller. Size is a huge issue across technologies. You don’t need layers and layers of thermal management built in, because diamond is its own natural thermal management.

Srinivas: Very good. We call silicon a great material for electronics—it’s been excellent and has served humanity remarkably well. Diamond is undoubtedly a great material too; the only issue has been cost. But with synthetic diamond bringing costs down, it’s excellent.

You explained how strong it is, and its optical properties are unique. Thermally, it dissipates heat like a metal—even better than metal.

You’ve already highlighted opportunities in AI. Are there any other opportunities in AI servers beyond thermal dissipation of heat from the chips?

Marty: Let me add one thing. There’s a whole range of properties of diamond that take it outside even the electronics industry—particularly in medical technology and medical pharmacology.

Diamond is biocompatible. It can actually be injected into the body in nanodiamond form to both identify cellular activity that may be diseased and deliver drugs to very specific locations. This is a combination of medical and electronic capability through biocompatibility.

You also have the nitrogen-vacancy center in diamonds that can be used to identify, through fluorescence, amazing things happening at a cellular level in brain cells or other parts of the body while the cells are still alive. So disease investigation, prevention, and even related pharmacology are all really big opportunities that are growing very rapidly with the use of diamond.

Srinivas: That’s a very good point, Marty. I really like that—these nanosensors that can get into the body and track health parameters, with diamond figuring prominently there. Another important input for me.

There’s jewel-grade diamond and tech-grade diamond. Can you explain the typical properties people look for in tech-grade diamond—certifications, quality requirements, testing, and so on?

Marty: We’ve identified 42 different subsectors of industries. In each of these 42 subsectors, there is a different type of diamond material request. This is part of the challenge for the growers, particularly in India, because it’s rare that a grower can produce all of these products. They tend to focus on very specific product areas.

Thermal conductivity is a critical one—watts per meter-kelvin. Atomic-level composition, nitrogen in parts per million and parts per billion, is critical for quantum and quantum sensing. Size, thickness, and purity of the crystal are also critical.

There are really specific requirements that every tech product developer needs, and the growers have to meet these very stringent standards. Right now there’s a challenging testing and certification balance that is a missing piece of the supply chain. The product has to be tested by the grower, then submitted in sample form to the tech product team, who retest it to verify the specs. That generally takes a month and a half and adds quite a bit of cost.

We’re trying to work toward some sort of unified, acceptable body of testing that can represent the entire tech-diamond space, so we can shorten the supply chain and move the process along faster.

Srinivas: Good point, Marty. The electronics industry works with very strict, defined standards that keep updating. The same applies here. I don’t know if there’s already a standards body for this industry—that would be a good development.

You offer supply-chain information. Even though the internet is open, a lot of information related to this is not readily available. You seem to be the ones providing it. How transparent is your information? Do you open up a lot of supplier-side information to buyers, and vice versa? How transparent are your B2B operations?

Liz: First of all, we’re very transparent. We welcome all levels. We’re working across 11 different verticals—everything from aerospace to semiconductor.

We built a marketplace website, Lattispec.com. Anyone can go on and view the products. We have sellers on there who are all vetted—advanced diamond product sellers, or tools and equipment used to produce diamond or for after-production.

We welcome everyone to come to the website, take a look, find what could be a good match, and contact the sellers directly. The marketplace is there as a source to bring all these different verticals together around diamond material and the tools and supplies needed to use it.

Srinivas: Very good. That’s a driving factor—you’re a B2B connecting place. That objective will help you grow, and suppliers and buyers will be happy to connect.

I’ve worked in various B2B places, including Global Sources, the famous B2B company in Asia. They operated a similar model and helped scale Asian businesses.

What’s your plan to scale? If demand rises significantly tomorrow, is there a plan to go more global and enlist as many suppliers and buyers as possible in your directory?

Liz: That’s a very good question. Obviously we want this marketplace to be global. There are growers around the world who, up until now, may have felt isolated. A lot of them come out of universities. Some have received government or other grants. But then what do they do once they figure out exactly what can be produced? They need better connections with producers who can take this diamond material to the next step and service eventual buyers.

We help put those connections together—one by one, company by company, sometimes university by university. We’re very broad-based. Almost every usage is covered—we just touched on biomedicine and heat management today, but there are many more.

We’re always working to build this marketplace with one-on-one connections. We welcome everyone around the world. We have sellers and producers from almost every continent. We’re very excited about that. And frankly, we’re working so hard on this because we know how relevant the product is. You mentioned defense and aerospace—this is going to be a game-changer for all of that.

Marty: If I could just add to that: we call it the dawn of the tech-diamond age. We’re just scratching the surface now. This is the beginning.

One of the most critical functions we serve—and we’re expanding this—is that most tech product developers, whether in optics, lasers, or defense, know they have a problem, a pain point that needs a solution. But they don’t really know about the possibilities of diamond.

They come to us, and we talk to these product developers one-by-one. Then we try to precisely match them with the grower or growers capable of helping them. It’s not like the gem industry, where everybody is growing the same thing. In the dawn of the tech-diamond age, these growers have very specific capabilities. We know who can do what when a product developer asks us for a solution.

As you know from the electronics industry, when a material is going into something like an iPhone, you have to embed in the sample stage as early as possible with the designer. You can’t just grow everything for them. You have to grow something very specific in very small numbers, get it tested and approved, meet the specs, and get it to the product developer so they can measure and test it. When it works, then you start scaling up and repeating it—which is another complexity altogether.

So we’re literally precision-matchmaking the right buyer with the right seller. That’s where we are at this point, and then we help them move toward the scale component.

Srinivas: Talking to an Indian journal—even though we’re globally focused and headquartered in India—clearly indicates you’re going global. That’s a very clear signal.

My next question: diamond is a bit like rare-earth magnets, where China has a strong hold and can use it for geopolitics. Could this diamond material also play into geopolitical issues? Europe has policies to protect its diamond-related assets. Does the U.S. have similar protections, or is it more about keeping things global rather than letting someone dominate? This is a fast-emerging, geopolitically sensitive material—someone shouldn’t be able to take too much control of it.

Marty: That’s a very good question. There is a certain specialty developing in China, including the way they manufacture diamond—primarily the HPHT method, as opposed to the CVD method used mostly in the U.S., Asia, and parts of South America. Diamond is now being grown almost everywhere, including South Africa.

Like any other emerging material, there will be some restrictions, but the real restriction is on origin. You hit that correctly, because a lot of it will go into areas like defense or government needs, and all governments are very particular about origin—where the raw materials or finished components come from.

China has a role. They have vast production, mostly in HPHT. But the rest of the world, which is mostly concentrating on CVD, tends to be more cutting-edge and able to produce the next-generation needs for diamond rather than just nanodiamond.

There’s no global way to control all of the production, but origin is important, and every supplier needs to know the origin of their product—just like everything else.

Srinivas: Very good point. Thank you for that.

Now, for a first-time person trying silicon carbide who wants to try diamond for research purposes, or wants to cool chips faster using diamond—what should that person check before buying? What critical things should they look at on the supplier side? What specifications or vendor qualities should they look for before buying a sample? Any suggestions for a first-time tech buyer of diamond?

Marty: We will work with that person directly. They can tell us in a very personal, one-to-one conversation—with me or Liz—the exact specs they require. Then we communicate that to specific growers, who have to tell us if they can do it and prove to us that they can before we even introduce them to the buyer.

Once we confirm the required specs and identify the appropriate growers, we literally make that match and make the introduction personally in the first conversation. Then we see if the relationship is capable of evolving. We tend to give three or four choices to the product developer so they can decide who they want to work with.

Needing those specifications is critical. As you know from the electronics space, there’s very little flexibility and very little tolerance. You have to meet the specs within a very specific range, because you can’t have failure at the equipment level. The diamond has to meet those specs, and we know who the growers are that can work comfortably in every different sector.

Srinivas: Very much so. I think that’s the value you can add with your service—that’s my personal opinion, and it seems to be what you’re focused on.

With that, I’ll go to high-tech and quantum. Qubits are now getting stuck in diamond—there’s a lot of talk about nitrogen-vacancy (NV) centers. Can you throw a little light on the quantum opportunities? Where exactly is diamond figuring in, and what material properties matter? This is my last question.

Marty: This is my favorite question.

Let’s separate quantum computing from quantum sensing—two different things.

Quantum sensing is happening right now, particularly in defense with magnetometry—quantum magnetometry based on diamond. In the very near future it could replace GPS for positioning and is much more secure than GPS.

Here’s the bottom line: Diamond in its creation can develop nitrogen-vacancy centers—spaces in the diamond where nitrogen atoms are missing. It’s in these spaces where qubits love to live. They’re very comfortable and very stable there. So it’s a great material for both quantum sensing and quantum computing.

Whether the nitrogen-vacancy centers are grown in or post-growth treated and doped to expand how many there are, this is going to be the space where qubits can be stored and where they can communicate with other qubits over quite far distances in a very amazing way that Einstein years ago called “spooky entanglement.” And that’s literally what it is.

Giving the qubits a place to live in a nitrogen-vacancy center, diamond is probably the most stable place to do that. As such, it’s being used in quantum sensing—at a nano level in new microscopes that are recreating capabilities for medicine, in magnetometry for defense and aircraft, and it’s going to be used in space travel. There’s a multitude of usage happening right now, with big demand across a lot of different fields.

The next step is actual quantum computing—moving quantum computing out of the labs and into functioning devices that don’t require a lot of cryogenics. That’s going to be the next phase for diamond material and NV centers as well.

Srinivas: Thank you, Marty. You have very good knowledge in quantum. Electronics and quantum are different, and the natural defect of diamond looks like a real opportunity.

With that, thank you both for talking to me. It’s been a pleasure. Looking forward to more such interactions—and to learning so much more about diamonds and all their applications.