A hybrid substrate technology based on nearly lattice matched GaN/ZrB2-buffered Si(111) was utilized to grow AlxGa1−xN heterostructures via a new method involving displacement reactions of D2GaN3 vapors and Al atomic beams at unprecedented low temperatures of 650–700 °C, compatible with Si-processing conditions. Homogeneous films exhibited strong cathodoluminescence with narrow peak widths comparable to those observed in MOCVD samples grown at 1100 °C. The formation of the enabling GaN/ZrB2buffer is investigated theoretically using first principle simulations. As an alternative to the GaN/ZrB2buffer technology we also developed novel HfxZr1−xB2 heterostructures (x = 0–1) possessing adjustable in-plane strain, which accommodates direct growth of lattice matched AlxGa1−xN on Si(111). Spectroscopic ellipsometry indicated that the boride films possess tunable band structure evolving smoothly from ZrB2 to HfB2, in the spirit of the Virtual Crystal Approximation model. This paves the way for the fabrication of optimized hybrid substrates that enable large scale nitride device integration with Si technologies via simultaneous optical and strain engineering.