At least, that's what DeBeers, the world's largest supplier of the sparkly gemstones, hopes. The venerable South African outfit Monday opened a venture capital office in Silicon Valley, hoping to find and fund startups that can develop a range of applications for the company's man-made diamonds.
Diamonds may not seem like a logical ingredient for tech wizardry, but the head of Element 6 Ventures (named for carbon, the core ingredient of diamonds) says industrial gems manufactured by her parent company, a DeBeers subsidiary, can be used in everything from cleantech to health care.
Passing a current through a combination of boron and diamond, for instance, can create ozonated water that sterilizes without detergents. A similar process can be used to break down toxins in wastewater. And because a diamond is tremendously effective at diffusing heat, it can be put into semiconductors to let them run faster without overheating, making chips more efficient and less expensive.
"These are materials that can perform in extreme environments," said Element 6 managing director Susie Wheeler.
The U.S. Geological Survey says diamond "may well be the world's most versatile engineering material," noting it is the strongest and hardest material known to man.
Although diamond that doesn't meet gemstone-quality standards has been used for cutting or drilling, Element 6 has pushed into new technologies
since launching its venture arm in 2007.
The four-person shop -- which until now has been based in Luxembourg -- already has sunk tens of millions of dollars into half a dozen startups, two of which are here in Silicon Valley. The new office aims to dramatically ramp up that investment pace, including via partnerships with local venture firms.
Element 6 also is building an adjoining 20,000-square-foot facility in Santa Clara to manufacture industrial diamonds.
"They bring scale, and they bring manufacturing excellence," said Felix Ejeckam, chief executive of Group4 Labs in Fremont. "Our customers aren't worried that we're going to trip on ourselves and not deliver the quality and volume that they want."
His 8-year-old company is developing diamond semiconductor wafers for use in GPS satellites, cellphone base towers and solar and wind farms. While the startup had previously landed a number of government grants and inked contracts with the Department of Defense and NASA, two years ago it finalized an investment from Element 6.
Ejeckam said the diamond expertise of DeBeers -- founded in the late 19th century by mining magnate Cecil Rhodes -- was just as important as its deep pockets in his decision to close the deal.
"Everybody has known for probably 100 years that diamond is the most thermally conductive material in the world," he said. "The difficulty has been how to bond it to a chip or other device."
With patents in hand that he says solve that problem, Ejeckam's company is using diamond's heat-transferring abilities to create chips that consume far less energy than those made from regular silicon.
"We don't use gem-quality diamond," he added. "It doesn't look pretty, but it's 10 times better than silicon and only slightly more expensive."
James Mawson, editor of Global Corporate Venturing in London, said the fact that Element 6 Ventures relocated to Silicon Valley from Europe "says a lot about where innovation is still centered."
DeBeers is hardly alone in opening a venture arm: With corporate coffers bulging and new technologies making it easier than ever to build startups, companies from Intel (INTC) to Intuit (INTU) have been pouring millions into fledgling firms as a cheaper alternative to in-house research and development shops.
Canice Wu, president of Plug and Play Tech Center, said more and more large corporations have been making pilgrimages to his Silicon Valley startup warehouses, hoping to make deals. They include consumer brands that most people don't necessarily think of as technology companies, such as Barnes & Noble and General Motors.
"Companies are looking more and more to invest early," he said, "rather than wait for a startup to hit big and have to pay more to acquire it."
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