A few miles north of San Francisco International Airport sits a squat, gray building just like a lot of other squat, gray buildings, except that this one contains a room full of machines growing billions of dollars’ worth of diamonds. Its facade is unmarked. “We don’t want to attract trouble, you know?” Says R. Martin Roscheisen, a founder of Diamond Foundry, over Japanese takeout at his headquarters. He opens his mouth wide to offer a resonant laugh that sounds like the noise karate champions make while kicking through a piece of wood: “Hi-yah! Hi-yah! Hi-yah!”
Born in Germany, Roscheisen, 48, studied engineering at Stanford University with Larry Page and Sergey Brin and went on to found an email messaging company with Page’s brother that Yahoo later acquired for $450 million. Then Roscheisen started a solar panel manufacturer, Nanosolar, that landed a $4.1 billion contract from the world’s largest utility company. His latest venture, which he started in 2015, has $100 million in funding from illustrious investors such as Leonardo DiCaprio. Diamond Foundry uses plasma reactors to turn diamond “seeds,” or tiny shards of diamond, into gemstones. The reactors—six-foot-tall metal and glass boxes that glow seafoam green when at work—mimic what happens to carbon after millennia of pressure, but faster, with less human labor and a carbon-neutral footprint. Diamond Foundry’s San Francisco facility (there’s another in Washington State, plus a polishing factory in China once owned by Tiffany & Co.) Produces 100,000 carats a year.
“They’re very high-quality diamonds,” Roscheisen says. “Here, I’ll show you one.” He reaches into the pocket of his gray jeans, pulls out a square of paper, and unfolds it next to a container of congealing teriyaki chicken. A brilliant-cut diamond the size of a pinkie nail rolls around the crease. “This is a $40,000 diamond,” he says. “I used to carry $100,000 of diamonds in my pocket, and then the marketing people said, ‘You can’t do that. You’ll devalue our product.’ It’s like we’re a serious corporation now. Hi-yah! Hi-yah! Hi-yah!” Jewelry brands as well-known as Swarovski and as trendy as Vrai & Oro, a direct-to-consumer outfit for engagement rings, rely on Diamond Foundry’s diamonds, which retail for 20% to 25% less than their mined counterparts. “The younger generation, the 28-year-olds buying organic food, they’re not into markups and they’re super concerned about traceability,” says Vrai & Oro founder Vanessa Stofenmacher.
So what’s the problem? According to Roscheisen, almost every time he or his partners try to advertise jewelry made with Diamond Foundry diamonds, the Diamond Producers Association, an alliance of old-school miners that includes De Beers, blocks his efforts. “The publisher gets a phone call from the diamond cartel” threatening to pull advertising campaigns underwritten by DPA members, he says. “For equity investors, it makes the due diligence really easy, like, ‘These are the winners!’ They only single us out! Hi-yah! Hi-yah! Hi-yah!”
A spokesperson for the DPA said the organization’s “business agreements do not prevent media partners from accepting advertising from any organization.” According to a 2016 report by Morgan Stanley, man-made diamonds account for 1% of the $14 billion global rough-diamond market. Still, the DPA appears to consider them a credible threat. Last year it spent $57 million on marketing that included a campaign called “Real Is Rare” featuring hipsters wearing understated bling.
The thing is, gemstones aren’t even Roscheisen’s jam. He wears no jewelry, no watch. He considers gemstones practice for making diamonds that could be used for quantum computing and thermal management in five to 10 years. “In principle, you can run diamond-based semiconductors that switch 1 million times faster than what you have in your iPhone right now,” he says. “But today, three-fourths of our business is gemstones.” Zynga founder Mark Pincus, a friend of Roscheisen’s, is bullish. “I invest in every company run by Martin,” he says. Had Roscheisen overheard that, he might have let out a “Hi-yah!”