The Photon Layer: Why Lasers are the Next Piece of the Electric Stack
And Why the US Can't Afford to Lose it
Disclaimer: This piece is intended as an argument, not a research paper. In it, I make some educated predictions about the direction of the laser industry, but Photonics is an extremely complex field and it is highly likely I will get some details wrong or miss something important. If you find any such errors, please reach out and I will update accordingly.
Also, I am currently on paternity leave and had to write this in between cage matches with a screaming infant (highly recommend fatherhood, unironically) so if my writing is not up to snuff please have mercy.
That’s enough disclaimers. Without further ado…
The Electric Stack and Its New Layer
There is a revolution underway in human civilization, one that transcends any single invention or headline. Instead it accumulates, layer by layer, in the form of computer chips, cheap and high-capacity batteries, power electronics, and electric motors (or, more specifically, the rare earth magnets at their core). Taken together, these form what Sam D’Amico and Packy McCormick have termed the Electric Stack: an interlocking set of technologies that are redefining the industrial basis of modern power.
Just as digital technologies, from transistors to the internet, compounded in capability and strategic importance over decades, the electric stack is compounding now. Each layer enables and accelerates the next. New electric motors and cheap battery storage make electrified vehicles viable. EV’s create demand for fast charging, which requires advances in power electronics. The layers are not independent; they are mutually reinforcing, and the nations that hold structural positions within them will have massive influence over the economies and militaries of the twenty-first century.
This is why the current geopolitical contest over batteries, semiconductors, and EV’s is more than conventional industrial competition. It is a struggle over owning the stack, and to this point the United States has failed to act in time to definitively claim a single layer.
But the stack is not finished. Just as the Internet did not emerge immediately from the void after the first transistor was fabricated, the electric stack is still growing. In this piece I will argue that there is another, under-appreciated layer, one which is rapidly advancing and, crucially, is not yet dominated by any one nation: directed energy. Every layer of the electric stack to date has concerned itself with the flow of energy: through wires, through cells, through circuits. What no layer has yet addressed systematically is energy that aims: that can be concentrated, steered, and precisely delivered without a physical medium connecting source to target.
In short: the next frontier is Big Ass Lasers12. Hell yeah.
Why Big Ass Lasers Matter: The Use Case Landscape
The layers of the electric stack share a few notable features: they are general purpose technologies with both civilian and military applications, but are not in and of themselves end products. Instead, they are the building blocks underpinning nearly every modern device, from smartphones to televisions to drones. Lasers fit this description nicely: they are a general purpose technology with value in military and civil applications. Plus, while it may be fun to torment your cat with a laser pointer, lasers are generally an input rather than a final product. They provide critical capabilities in manufacturing, communications, medicine, and space, to name a few. Each of these applications shares a common thread: the ability to do work with light, at a power and precision that no other technology has matched. More specifically, lasers are good for:
Killing Things (Obviously)
The defense applications of high-power lasers tend to dominate the conversation for good reason. Modern warfare is facing a cost-exchange crisis that threatens to bankrupt even the most well-funded militaries on earth. The problem is straightforward: it currently costs vastly more to shoot something down than it costs to launch it in the first place. A Houthi drone assembled from consumer electronics for a few hundred dollars can compel the USS Carney to fire a SM-2, at roughly $2 million a shot. Multiply that across a contested theater and the numbers become catastrophic. There’s a reason the Pentagon has requested a $200 billion Iran War Supplemental after just a few weeks of conflict.
High-power lasers change the math. A laser engaging a target might spend only a few dollars of electricity per shot. It will not run out of ammunition as long as there is power. It engages at the speed of light, meaning no lead calculations and lower miss probability against fast moving targets. It can scale from a warning pulse to a disabling shot to a destructive beam by adjusting dwell time. The US Navy, Air Force, and Army are all actively fielding directed energy programs as responses to adversaries who have figured out how to destroy expensive, exquisite assets with cheap, disposable ones. And that’s actually one of the less important uses, compared to…
Making Things
Laser weapons are awesome, but in aggregate industrial lasers are far more economically significant. They are, in fact, already load-bearing infrastructure for the modern economy.
Consider semiconductors. Every leading-edge chip fabricated today depends on extreme ultraviolet lithography, a process that works by firing a laser at a tin droplet 50,000 times per second to generate plasma, which then emits the EUV light used to etch circuit features smaller than a virus. The machines that do this, built by the Dutch firm ASML, cost upward of $200 million each and are arguably the most complex manufactured objects ever made. Those machines are, at their core, very sophisticated laser delivery systems. When policymakers talk about semiconductor sovereignty, about who controls the commanding heights of the chip supply chain, they are talking (whether they know it or not) about laser capabilities.
While semiconductors may be the most dramatic example, they are not an outlier. Modern automotive bodies are laser-welded to tolerances that resistance welding cannot match. Electric vehicle battery packs are laser-welded because the geometry and thermal sensitivity of lithium cells makes it the only practical option at scale. Aerospace manufacturers use laser powder bed fusion to produce turbine blades and structural components with internal geometries that subtractive machining cannot reach; this is especially significant because these parts aren’t merely better, they literally could not be made otherwise. Medical device manufacturers cut coronary stents — sub-millimeter features in biocompatible alloys — with lasers, because nothing else is precise enough. The global industrial laser market sits at roughly $6–7 billion annually, growing rapidly, but that number dramatically understates the economic surface area it supports. Nobody buys a “laser-cut part.” They buy an aerospace bracket, a medical stent, a turbine blade. The laser is a silent prerequisite, invisible in the supply chain until it isn’t there.
This is exactly the pattern of every prior layer in the electric stack. Rare earth magnets don’t appear on any consumer invoice, but pull them out and the whole industrial economy stops. No normal person spends their day thinking about power electronics, but without them the grid collapses. Lasers are already in that category. Without them, the modern industrial economy ceases to function. Things get even more interesting when you push the power envelope.
Megawatt scale high-powered lasers represent a plausible step change in manufacturing. The barriers that currently make advanced manufacturing expensive are not primarily material costs, they are processing costs. Titanium is not expensive because titanium ore is scarce (it is in fact about 100 times more abundant than copper). It is expensive because titanium is extraordinarily difficult to extract, machine, form, and join with conventional tools. High-power lasers change that calculus: they could cut titanium faster, cleaner, and with less waste than mechanical tooling, and with stronger lasers powder bed fusion could print near-net-shape titanium components fast, increasing production rates for complex parts. Higher powered laser welding could reduce the number of passes needed to join parts. Carbon fiber composites, which currently require hours in an autoclave to cure — a capital-intensive bottleneck that constrains how widely composites can be used — could be directly laser-cured, enabling orders of magnitude higher production rates.
The nature of lasers as a general purpose technology means there are likely infinite more uses than anyone can imagine, but what can be said with some certainty is this: the countries that lead in high-power lasers will be able to make things that countries without those lasers simply cannot, and they will do so faster and at lower cost. As the power frontier advances, that gap will grow ever wider. Eventually we may even…
Ignite the Stars
In December 2022, the National Ignition Facility at Lawrence Livermore fired 192 laser beams at a target the size of a pencil eraser and produced more energy than it put in, the first demonstration of fusion ignition in a laboratory setting. It was, without exaggeration, one of the most significant scientific milestones of the century. The lasers were the entire mechanism: to over-simplify, NIF has turned fusion into a laser power delivery problem. As the field matures and the engineering challenges of commercial fusion come into focus, high-power laser capability could sit at the center of one of the most consequential energy technologies in human history. The countries that lead in lasers will have a structural head start in laser-driven fusion.
Beaming Power Across Distance
Finally, and perhaps the most straightforwardly science fiction-esque application: the ability to transmit energy without wires. Free-space power beaming (delivering electricity via laser to a receiver that converts light back to current) has already moved from theory to active research programs at NASA, DARPA, and several commercial ventures. The near-term applications are probably military: forward operating bases resupplied by drone, UAVs kept aloft indefinitely by a ground-based laser, remote sensors powered without batteries. The longer-term applications are where science fiction becomes reality: space-based solar power collected in orbit and beamed to ground stations, lunar surface energy logistics, and laser-propelled spacecraft.
The Unified Layer
Across all of these domains, the value proposition is the same: precise, efficient, directed energy delivery at speed and at scale. That consistency is what makes high-power lasers a stack-layer technology rather than a collection of unrelated applications. Just as the transistor turned out to matter for computing, communications, and consumer electronics simultaneously, the laser turns out to matter for defense, manufacturing, energy, and medicine. That is exactly what a foundational layer of the electric stack looks like.
The Electric Stack in Strategic Context
Like every other layer of the electric stack, ownership of directed energy technology has massive geopolitical implications. Understanding this in context requires, unfortunately, a tour of how the United States has handled the prior layers. It is a story of missed opportunities, belated recognition, and expensive lessons that we risk not learning.
The Scorecard So Far
The electric stack has been assembling itself for roughly three decades, and the ledger of who owns what layer is not flattering to the United States.
Batteries are the most visible and painful example. Lithium-ion battery technology was developed substantially in US research labs — John Goodenough, the Nobel laureate who did foundational work on the lithium ion battery, spent decades at the University of Texas. Today, Chinese firms CATL and BYD collectively produce more than half the world’s electric vehicle batteries, and dominate leading edge chemistries like Lithium-Iron-Phosphate. China refines roughly 70% of the world’s lithium, 60% of its cobalt, and nearly all of its processed graphite. China also produces the vast majority of the specialty chemicals that are needed for battery cathodes and anodes. The United States is, at present, structurally dependent on a strategic competitor for the storage layer of the electric stack. This did not happen because China out-researched us (at least not initially). It happened because China recognized the strategic value of the full manufacturing supply chain, and used it’s domination of the supply chain to build a world-leading battery innovation pipeline.
Rare earth magnets are arguably worse. The permanent magnets used in electric motors — like the neodymium-iron-boron magnets that make EVs drive, wind turbines spin, and actuators function — depend on rare earth elements that China has spent decades systematically cornering. China currently produces roughly 90% of the world’s processed rare earth elements and a similar share of the finished magnets themselves. This is not a matter of nature playing favorites; it’s almost cliche to point out that Rare Earths aren’t particularly rare. Rather, China’s dominance is an outcome of deliberate industrial strategy, executed patiently over decades while the United States treated rare earth processing as an unpleasant, low-margin business. The leverage this creates is massive, and China has already demonstrated willingness to restrict rare earth exports as a potent geopolitical tool.
Power electronics — the systems that convert, condition, and control electrical power in motors, chargers, inverters, and grid infrastructure — are a more complicated story. The US retains meaningful capability in the design of power electronics, and wide-bandgap semiconductors like silicon carbide and gallium nitride, which are critical to next-generation power conversion efficiency, remain areas of genuine American and allied strength. But manufacturing scale is increasingly Asian, and gallium — a key input for GaN power devices — is another material where China holds dominant refining capacity. China’s dominance in EV’s is increasingly resulting in a lead in high-voltage architectures, enabling its cars to charge far faster than foreign competitors.
Compute represent the most successful story for the US, and it is instructive precisely because it required a crisis to produce a response. The CHIPS and Science Act, passed in 2022, represented a belated but serious recognition that semiconductor fabrication was a strategic asset, not just a market outcome. I know from personal experience how real this investment is, as my wife helped open TSMC’s Fab 21 in Arizona (and … hoo boy do I have some stories from those days). This was major progress, but it came only after years of watching fabrication capacity migrate to Asia, after a global chip shortage exposed the fragility of the supply chain, and after a bipartisan panic about Taiwan’s role as the world’s most critical single point of failure for advanced chips. What’s more, it only addressed the leading edge, leaving trailing edge “analog” semiconductors to be dominated, increasingly, by China. We acted, but we did so late, at insufficient scale, and without the level of focus and rigor that the moment demanded.
The Pattern and What It Means
The through-line across all of these cases is not incompetence or malice (OK, maybe some incompetence). It is a structural difference in how the United States and China think about industrial technology. The United States, broadly, treats technology development as a market process and strategic competition as a matter of military procurement. China treats technology development as statecraft: a multi-decade project of identifying which layers of critical infrastructure it needs to own, and then deploying the full apparatus of the state to make it so. Made in China 2025, whatever its public reception, was an honest and detailed declaration of exactly this strategy.
The result is a consistent asymmetry: the US invents and researches, China manufactures and scales, and by the time the US recognizes that manufacturing is the strategic asset, China’s dominance is unshakeable.
The Next Layer Is Still Open
This is the context in which high-power lasers need to be understood. Unlike rare earths and batteries, no country has yet achieved structural dominance in this space. The technology is maturing, but there is still foundational innovation happening that could reshape the industry.
That will not be true forever. The question is whether the United States will approach this layer with the strategic intent the moment demands, or whether we will find ourselves, a decade from now, writing the same uncomfortable postmortem we are currently writing about batteries.
The Technology: CBC, PICs, and the Path to Practical High-Power Lasers
Having established that high-power lasers matter enormously across a wide range of applications, the natural next question is: if they have so much potential, why aren’t they ubiquitous? Why isn’t the Navy shooting down every incoming missile with a beam of light, why aren’t industrial lasers cutting through six inches of titanium at a fraction of current costs, and why isn’t anyone beaming power from orbit yet?
The answer is that scaling laser power is hard. Like, really hard. Understanding why, and the most promising approaches to solving it, is essential to understanding where the strategic opportunity lies.
The Scaling Problem
A laser, at its core, is a device that converts electrical energy into coherent light — photons that are all the same wavelength, traveling in the same direction, in phase with one another. That coherence is precisely what makes laser light useful: it can be focused to a point, transmitted over long distances without spreading, and delivered with extraordinary precision. The problem is that as you push more power through a laser, several things start going wrong simultaneously.
Heat is the first enemy. High-power lasers, even modern fiber lasers, are not particularly efficient — a large fraction of the input electrical energy becomes heat in the gain medium, the material that actually produces the light. That heat distorts the gain medium, degrades beam quality, and if not managed, destroys the device entirely. This is a fundamental physical constraint that has limited laser systems for decades.
Beam quality is the second problem. A laser that produces a megawatt of power is not very useful if that power is spread across a diffuse, distorted beam rather than concentrated in a tight, controllable spot. Power and beam quality tend to trade off against each other in conventional laser architectures — pushing one up pushes the other down. For applications like missile defense or power beaming, where you need both high power and a tight, precisely aimed beam delivered over long distances, this tradeoff is untenable.
Size, weight, and cost round out the picture. The high-power laser systems that exist today — the ones deployed on naval vessels or tested in airborne platforms — are large, heavy, expensive, and require substantial supporting infrastructure. A megawatt laser weapon system that requires a ship to host it is useful, but shrink that system down so that if fits on a truck or a drone and you’ve transformed warfare forever. The gap between those two things is largely an engineering problem, if a difficult one.
Coherent Beam Combining: The Elegant Solution
This is where things start to get a bit speculative, so feel free to sound off in the comments if you disagree. Based on my research, the most promising approach to cracking all of these problems simultaneously is coherent beam combining, or CBC. The DoW seems to agree, as this is the approach they chose for the HELSI (High Energy Laser Scaling Initiative) program. The core idea is surprisingly simple: instead of pushing more power through a single laser and fighting the resulting heat and beam quality problems, you run many lower-power lasers in parallel and combine their beams into one.
The trick — and it is a seriously non-trivial trick — is that the combination only works if the individual beams are coherent with one another: same wavelength, same phase, precisely synchronized so that their light waves add together constructively rather than canceling each other out or producing a chaotic mess. Achieve that synchronization across an array of emitters, and you get a combined beam that behaves as if it came from a single, much more powerful laser with the heat load distributed across all the individual emitters rather than concentrated in one.
The elegance of this approach is that it sidesteps the fundamental physics tradeoff between beam strength and quality, and transforms it into an engineering problem. The constraints that limit single-aperture lasers — heat concentration, beam quality degradation at high power — become manageable when the power is distributed.
Why CBC Is Becoming Viable Now
Coherent beam combining is not a new idea, researchers have understood the principle for decades. What has changed is that several independent streams of technological progress have matured simultaneously, and their convergence is making practical CBC systems viable.
The most significant of these is the maturation of high-power fiber lasers. Over the past two decades, driven largely by commercial telecom and industrial cutting and welding demand, fiber lasers have improved dramatically in efficiency, output power per channel, and cost. This matters enormously for CBC because more power per individual channel means fewer channels are needed to reach a given combined power level, and the complexity of the phase control problem for CBC tends to scale exponentially with the number of channels.
Phase control electronics have kept pace. The core engineering challenge of CBC is maintaining coherence across all channels in real time: measuring and correcting the phase of each beam faster than vibration, temperature changes, and air turbulence can disrupt it. The control electronics required to do this at high channel counts have become faster, cheaper, and more capable, tracking the same trajectory as computing hardware generally. Emerging AI-driven wavefront sensing and correction algorithms are accelerating this further, enabling adaptive phase control that can respond to disturbances more intelligently than prior rule-based approaches while potentially scaling better with the number of channels.
Photonic integrated circuits (PICs) enter the picture here as a critical enabling technology for the next stage of scaling. A PIC is to light what a conventional integrated circuit is to electricity: a miniaturized platform that routes, manipulates, and controls photons on a chip rather than in discrete bench-top optical components. For CBC specifically, PICs offer a path to integrating the phase measurement and control functions directly at chip scale with the emitter arrays themselves, collapsing what was a complex and expensive assembly of discrete components into something manufacturable at semiconductor scale. This is highly analagous to electronic circuits: early computers were built from discrete components wired together on circuit boards. The Integrate Circuit collapsed that onto a chip and created the basis for the electric stack. PICs are that, but for photonic systems.
PICs are a big part of why CBC could scale from impressive defense programs into a broadly deployable, cost-competitive technology. The systems being demonstrated now rely primarily on mature fiber laser technology and advanced control electronics. PICs are a key piece of the puzzle that may determine whether the technology crosses from specialized military hardware into the kind of manufacturable, widely deployable platform that defines a true stack layer — which is precisely why they deserve strategic attention, and precisely why the manufacturing ecosystem around them matters so much.
Importantly, even if I’m wrong about CBC specifically, all these same technological advancements are likely to feed into whatever takes CBC’s place just as well. Regardless of the specifics, the result will be that lasers get much, much more powerful.
Where the Technology Stands Today
Many-channel CBC systems are already being developed, which is the primary reason why I think they’re likely to win out in the long run. Programs like the aforementioned HELSI are pushing fiber-based CBC toward the Megawatt (MW) scale for defense applications. Commercial silicon photonics are getting a much needed boost from data center interconnect demand, which is already helping mature the underlying PIC manufacturing base in ways that are directly transferable to directed energy applications.
Yet there is still much work to be done. What we do not have is a mature, manufacturable, cost-competitive MW scale CBC system ready for broad deployment across defense and commercial applications. There is still substantial research and engineering work to be done to solve problems with local phase sensing, control algorithms, thermal management, system integration, and more. Even with current technology, there is a gap between laboratory demonstration and the kind of scalable, manufacturable technology that can anchor a new layer of the electric stack. That gap is what the next decade of investment will be racing to close. That race is the strategic contest, and unlike the races over batteries and rare earth magnets, the United States has not lost it yet.
The Strategic Landscape: Where the US and China Stand
So what, exactly, is the state of play for this technology from a geopolitical standpoint? The United States has a long and distinguished history of inventing foundational technologies, failing to notice they were foundational, and then writing alarmed Senate reports about it a decade later. Will directed energy become another entry in that tradition, or is the US position actually defensible this time? The answer, unsurprisingly, is complicated.
What the US Has Going For It
Start with the good news, because there is good news.
The defense research ecosystem is significant. DARPA, the Air Force Research Laboratory, the Naval Research Laboratory, MIT Lincoln Laboratory, Livermore, Sandia, and various university labs provide an incredible concentration of directed energy expertise. The NIF fusion ignition milestone was achieved for precisely this reason: the United States has spent decades building serious institutional knowledge in the kinds of photonic power delivery problems that underlie CBC and related systems. That knowledge lives in people, in cleared facilities, in accumulated experimental data, and in the kind of hard-won understanding of failure modes that cannot be replicated quickly by throwing money at a problem. It is a major strategic asset.
The commercial silicon photonics industry is a second advantage. Data center demand for optical interconnects has driven Intel, Broadcom, and a growing ecosystem of startups to invest in PIC fabrication and design capability. This means the US is not starting from scratch on the manufacturing base critical to next-generation CBC systems. It is starting from a commercially validated foundation that needs scaling and direction, but not re-invention.
Defense procurement as a demand-side anchor is a third advantage, and arguably the most important for the near term. The US military’s willingness to pay for early-generation directed energy systems at prices no commercial market would sustain underpins the development ecosystem. It is the same mechanism that seeded commercial aviation, semiconductors, and the internet. China can replicate a lot of American advantages, but it will struggle to win a contest of spending money against the Pentagon.
Finally, and most importantly: the US enters this race with something it did not have (at least not to the same degree) in the battery and solar contests: a mature, competitive domestic industry in the most relevant existing technology. IPG Photonics, the world’s leading fiber laser manufacturer, is a Massachusetts-based company with its primary manufacturing and R&D campus in Oxford and a newly opened dedicated defense facility in Huntsville, Alabama. Coherent Inc., another major player, is headquartered in Pennsylvania with production facilities across more than a dozen states. NLight, which won the contract for the DoW’s HELSI, is another major player headquartered in Camas, Washington. The US is not starting from scratch on the manufacturing base. That, by itself, is a notably stronger starting position than the one it occupied when China began its battery industry build-out. However…
China still has big advantages
Tell me if this sounds familiar: the gain media in high-power fiber lasers — ytterbium-doped fiber, neodymium-based crystals — depend on rare earth elements that China dominates from mine to finished product. Once again China’s control of Rare Earth refinement gives it major leverage directly upstream of a critical supply chain, leverage which China knows how to use.
What’s more, while the US may currently lead in high-end fiber laser systems, China is not absent from this market. It already has a significant and scaling fiber laser industry through firms like Raycus and JPT, and leading Western manufacturers like IPG have facilities in China — though precisely what share of their production is Chinese is hard to know. China’s existing fiber laser industry means it has a running start on the manufacturing base, supply chain relationships, and cost discipline most relevant to scaling CBC technology.
China also has the advantage in scale: it is by far the largest market for fiber lasers, with approximately 30% of global sales compared to the US and Europe at about 15% each. The most common uses for high powered lasers are mostly in manufacturing: tube cutting, laser welding, materials processing, etc. If the US gets its demand bridge from the military, China gets its from a deep customer base of domestic manufacturers.
That manufacturing base also includes adjacent industries that could cross-polinate with high power lasers, like LiDAR. Chinese firms like Hesai, RoboSense, and others have scaled aggressively in automotive and consumer LiDAR, becoming dominant in what is now a high-volume precision photonics manufacturing market. LiDAR involves precision optical components, beam steering, phase-sensitive detection, and photonic component supply chains that are adjacent to, though not identical with, what CBC systems require. The manufacturing skills don’t transfer perfectly — coherent beam combining demands phase control precision that goes far beyond what automotive LiDAR requires — but the supply chains, the precision optics manufacturing base, and the engineering talent are meaningfully transferable.
As it does with every other layer of the Electric Stack, electricity generation also matters. Manufacturing and testing high-power laser systems is, unsurprisingly, electrically intensive. China’s combination of massive generation capacity, cheap industrial electricity pricing, and state-directed investment gives energy-intensive advanced manufacturing a structural cost advantage that is difficult to compete with. When you are trying to test a 500kW CBC system, electricity costs and availability become non-trivial.
The Most Important Asymmetry
Laid out side by side, the US and Chinese positions look something like this: the United States has a lead in research depth, institutional knowledge from decades of serious defense programs, a commercially validated PIC manufacturing base, and a defense procurement system that can function as a demand-side bridge to commercial scale. China has dominant upstream positions in many of the materials and components most critical to current laser technology, an existing and cost-competitive fiber laser industry, adjacent photonic manufacturing scale from industries like LiDAR, abundant electricity, and a national industrial strategy that treats stack-layer dominance as an explicit objective rather than a market outcome.
The US advantages are meaningful, but they are overly-concentrated in early-stage activities like research, design, and defense procurement. The Chinese advantages are concentrated in exactly the activities that determine whether a technology becomes a foundational layer or remains a specialized capability: materials, components, manufacturing scale, and industrial strategy. This positions it well to take advantage of any paradigm shift in the industry: even leading American manufacturers like IPG could be disrupted if a major technological shift occurs, akin to how Chinese auto makers used the transition to EV’s to leapfrog incumbents.
Thus we have an uncomfortably familiar pattern. The US invented the solar cell and foundational battery chemistry. What it did not do was treat the manufacturing layer as strategically important, at least until someone else already owned it. The question for directed energy is whether the lesson has actually been learned, and will we react before this industry is in crisis, or will we be reading about China’s dominant position in fiber laser and PIC manufacturing in a Senate report circa 2035.
The window is open, but the fiber laser market share data, the history of rare earth export controls, and adjacent industries like LiDAR are all telling the same story — and it is a story about a country that has studied the electric stack playbook carefully and is running it again. If we want to maintain a lead in this new layer of the electric stack, we need to approach it with the kind of deliberate, intentional strategy we lacked for the previous layers. Here’s what that strategy might look like:
Policy Recommendations: Claiming the Photon Layer
1. Increase and Coordinate R&D Investment
The US directed energy research ecosystem is genuinely world-class, but also fragmented. DARPA, DOE, NSF, NIST, and the service research laboratories are all running their own programs, producing research that is excellent, and isolated. More funding is key, but it risks being rendered ineffective without a unified national roadmap that aligns investment across agencies around shared milestones, prevents duplication, and accelerates the path from laboratory demonstration to manufacturable system.
The National Nanotechnology Initiative, launched in 2000, provides a reasonable template: a cross-agency coordination body with a shared strategic vision, common metrics, and enough institutional weight to actually influence budget priorities. It was imperfect, as all such bodies are, but by most accounts it accelerated the translation of nanotechnology research into commercial and defense applications. A National Photonics and Directed Energy Initiative modeled on that framework would give the ecosystem a coordination layer.
2. Secure the Supply Chain
The supply chain problem in directed energy has three distinct layers, each requiring a different intervention.
Upstream, the rare earth problem is urgent and tractable within existing policy frameworks. The gain media in high-power fiber lasers depend on ytterbium, erbium, thulium, and other rare earth elements that China dominates. The fix is not complicated: domestic mining and processing investment, allied sourcing agreements with Australia, Korea, Japan, and others, and integration of laser-critical rare earths into existing critical minerals frameworks. The goal is to ensure that no single export control decision in Beijing can switch off the American directed energy industry overnight. This will become all the more crucial as Directed Energy Weapons become a staple of defense technology. Nobody wants to go into battle against the worlds dominant drone manufacturing power and suddenly have their supply of drone-killing lasers disappear.
Midstream, the component supply chain — optical fiber, laser diodes, PIC fabrication capacity — is probably most amenable to a CHIPS Act model. Targeted incentives, R&D subsidies, and defense procurement can anchor domestic and allied manufacturing capacity in these components before Chinese manufacturers achieve the same kind of cost-driven dominance they have established in solar panels and battery cells. This is, critically, not about building a hermetically sealed domestic supply chain. It is about ensuring enough allied manufacturing depth that cost competition from Chinese suppliers does not hollow out the laser industrial base the way it hollowed out solar manufacturing.
Downstream is probably the most difficult, but nevertheless important: civilian proliferation of directed energy technology ultimately requires a domestic industrial base capable of absorbing and deploying it. Manufacturing equipment suppliers, medical device manufacturers, system integrators — these are the customers that will determine whether directed energy becomes a true stack layer or remains a specialized defense technology. Building that downstream base is a larger industrial policy challenge than any single initiative can address on its own, but policymakers should be clear-eyed that the upstream and midstream investments will only achieve their full strategic value if the downstream civilian customer base exists to create the demand that drives manufacturing scale. This is another area where allied-scale can help, taking advantages of the strong industrial bases in countries like Japan, Korea, and Germany.
3. Use Defense Procurement as a Demand-Side Bridge
The commercial market for high-powered directed energy systems is clear, but does not yet exist at the scale required to justify the manufacturing investment needed to drive costs down to the level at which the commercial market will exist. This is the classic chicken-and-egg problem of deep technology commercialization, and the US government has a well-tested tool for breaking it: structured defense procurement commitments that de-risk technological innovation and eat the high costs of developing that into viable new products.
The commercial space industry is probably the most recent and instructive example. NASA’s Commercial Crew and Commercial Resupply programs provided the early revenue stream that allowed SpaceX to invest in manufacturing infrastructure and innovation that has driven launch costs down by an order of magnitude, spawning a commercial space economy that was unthinkable fifteen years ago. The same logic applies here. Air Force directed energy programs, Missile Defense Agency investments, and Navy shipboard laser systems should be structured not merely as procurement contracts but as deliberate demand-side anchors — designed with an eye toward driving the cost curves and manufacturing scale that will eventually make civilian markets viable. This is precisely what the US defense procurement system has done, at its best, throughout history.
4. Invest in the Workforce Pipeline
Technology competition is ultimately talent competition, and the directed energy talent pipeline is undernourished relative to its strategic importance. Computer Science and AI attract extraordinary investment in fellowships, university programs, and corporate recruitment, investment that reflects the foundational importance of those fields. Photonics and directed energy engineering attract a fraction of that attention despite being, arguably, comparable in importance to the next generation of the electric stack.
The intervention here is straightforward: targeted graduate fellowships in photonics and directed energy engineering, expanded investment in national lab resources for researchers, and dedicated program funding at universities with existing photonics strength. The goal would be to redirect some of the talent that would otherwise graduate into the depressed CS labor market into becoming the engineers that staff the research programs, defense contractors, and commercial companies that a serious directed energy industry requires. Talent gaps are slow and expensive to close. The time to act is before the gap becomes acute, which is now.
5. Deliberately Diffuse Defense Innovations into the Civilian Economy
The history of successful US industrial policy is largely a history of defense-funded innovations that achieved their full strategic and economic potential only when they escaped into the civilian economy. The internet was ARPANET until it wasn’t. GPS was a military navigation system until it became the invisible infrastructure underlying a trillion dollars of civilian economic activity. Semiconductors were funded by defense contracts until they became the foundation of the modern economy. In each case, the transition from defense-sequestered capability to civilian stack layer was what created the manufacturing scale, the cost curves, and the ecosystem density that let the technology truly flourish.
High-power lasers need to make that transition. Defense classification, ITAR restrictions, and the structural incentives of defense procurement can easily push toward keeping the technology inside the bubble of cleared contractors and military programs where it is useful but limited in scale. Without deliberate policy, directed energy risks follows that path; it will be a capable, expensive defense technology, and nothing more.
Importantly, none of these recommendations require me to be right about CBC to be valuable. Investment in workforce, supply chains, and technological diffusion will benefit whatever technical solution wins the day. That is the essence of smart industrial strategy. China understands this, and has run it’s own strategic playbook over and over again to claim the infrastructure of the modern economy layer by layer. The United States should meet that strategy with one of its own, and finally own a piece of the Electric Stack.
Thanks for reading! If you enjoyed this post, consider subscribing. This is a personal blog that I write when I have something to say that doesn’t fit in my Twitter feed. I used to be a Tech and Trade Staffer in the US Senate so I tend to write about politics, semiconductors, technology, industrial policy, and any other random topic I find interesting. All posts are free, I don’t make money off this blog.
Ok time for more disclaimers: Directed Energy encompasses more than just lasers — for example, it also includes High Energy Microwaves — but for this piece I’m going to focus on lasers because Lasers Are Awesome and also I need to limit the scope of this piece somehow.
The more technically minded readers might object to this framing, as there are many other axes of laser advancement beyond raw power. For this post, however, I am going to use power as a proxy for sophistication, because I am trying to limit the amount of technical jargon I use and this post has already become longer than I intended. For those of you working on high speed lasers, you are seen, you are heard, you are loved, please have mercy on me.