Diamond Disruptor: Meet The Nerdy King Of Bargain Bling

Forbes

Though they get little respect from the industry’s old guard, technologist Martin Roscheisen’s lab-grown diamonds will soon flood the $85 billion fine jewelry market. They could also play a critical role in providing advanced chips for things like electric vehicles and quantum computing.  Read the full story on Forbes: https://www.forbes.com/sites/christopherhelman/2023/03/27/diamond-disruptor-meet-the-nerdy-king-of-bargain-bling/?sh=46e42997b499  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Today on Forbes, Diamond Disruptor.

00:04 Meet the nerdy king of bargain bling.

00:07 Inside his rehabbed warehouse in South San Francisco,

00:11 with its line of glowing plasma reactors the size of minivans,

00:15 Martin Rauscheisen, CEO and co-founder of Diamond Foundry,

00:19 unveils a 4-inch single-crystal diamond wafer.

00:22 He says it was cut from a palm-sized 423-carat rough stone,

00:26 the biggest man-made diamond ever,

00:29 large enough to fashion a set of crown jewels.

00:32 But Rauscheisen, who's 52 years old,

00:35 presents it as a preview of the age of quantum computing.

00:38 He says, "Every chip in the future will use diamond wafers.

00:42 Be it for phones, laptops or cars,

00:45 diamond will enable ever-smaller high-energy electronics."

00:49 Because the path to making diamond semiconductors

00:53 passes through an expertise in forging gem-quality stones,

00:56 Rauscheisen sees it as a foregone conclusion

00:59 that his industry will soon dominate

01:01 the $85 billion diamond jewelry market.

01:04 He says Diamond Foundry has tripled diamond output

01:07 in the past year to 5 million carats

01:09 and intends to hit 20 million per year in 2025,

01:12 when his $800 million solar-powered diamond factory in Spain

01:16 is up and running.

01:18 At that volume, he'll be producing about 60% as many stones

01:21 as giant De Beers Group, which mined 35 million carats last year,

01:25 mostly from Botswana at a much higher cost.

01:28 We're not talking cubic zirconia or moissanite here.

01:32 Man-made diamonds are not new.

01:34 In the 1950s, General Electric forged the first specs

01:37 by mimicking the high temperatures and pressures

01:40 deep in the Earth's crust.

01:42 Today, billions of carats of man-made diamonds

01:44 are used for industrial applications.

01:46 But it's taken decades to advance the technology

01:49 to yield jewelry-quality diamonds

01:51 in sizes almost unobtainable in nature

01:53 and indistinguishable from natural stones,

01:56 unless you have a fluorescence spectroscopy machine.

02:00 From nothing a decade ago, lab-grown rocks

02:02 now make up 10% of the 125 million carat

02:05 annual diamond jewelry trade

02:07 at prices often 80% less than natural diamonds.

02:11 Pandora CEO Alexander Lassik,

02:13 who started selling lab diamonds in 7,000 stores last year,

02:17 says, "Our average customer has found it difficult

02:20 getting into mine diamonds from a financial standpoint.

02:23 We're not taking market share.

02:25 We're creating more market."

02:28 While mall jewelers are enjoying great margins

02:30 selling 3-carat flawless lab-grown diamond engagement rings

02:34 for under $4,500,

02:36 versus more than 10 times that amount at Tiffany & Co.,

02:39 luxury houses like Cartier and Van Cleef & Arpels

02:42 turn up their noses.

02:44 Edward Asher, president of the World Diamond Council, says,

02:48 "For the larger sizes, they are so cheap

02:51 that they have lost all real value."

02:54 New York diamond legend Martin Rappaport,

02:57 whose RappNet lists more than a million diamonds for sale,

03:00 says, "I have the largest diamond trading network,

03:04 and I won't move synthetics.

03:06 They lack scarcity, so they lack value retention.

03:09 The consumers are really getting screwed here.

03:11 You'll know in a year or so.

03:13 I'll bury you with synthetic diamonds in the end."

03:16 However, Rausheisen thinks it's he who will be doing the burying.

03:20 "It's like how Miki Motto popularized cultured pearls," he says.

03:24 Rausheisen adds, "It started with Jackie Kennedy

03:27 not wanting to pay up for natural pearls

03:30 in favor of those that are cultured.

03:32 You can still find all-natural pearls at outlandish prices,

03:35 but they're only 1% of the market."

03:38 It's kind of the same way environmentally conscious consumers

03:41 are driving exponential growth in the market for plant-based foods.

03:45 Diamond Foundry, whose tagline reads "Diamonds, Evolved,"

03:49 is betting that it can capture a new generation of jewelry buyers.

03:53 Mined diamonds have a carbon dioxide footprint

03:55 of about 170 kilograms per carat,

03:58 versus 8 kilograms or less for lab-grown.

04:01 Diamond Foundry aims to be zero-carbon.

04:04 The reactors in Rausheisen's converted Apple warehouse

04:07 in Wenatchee, Washington, run on hydropower from the Columbia River.

04:11 The $850 million factory under construction in Spain

04:14 will use 30 megawatts of solar.

04:17 Rausheisen, displaying a mix of ambition and confidence, says,

04:21 "We plan to replace all of diamond mining in five years."

04:26 For full coverage, check out Christopher Hellman's piece on Forbes.com.

04:32 This is Kieran Meadows from Forbes. Thanks for tuning in.

04:36 [music]

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