The landscape of venture capital has undergone a seismic shift as investors pivot away from pure software-as-a-service (SaaS) models toward the tangible, physical world. Eclipse Ventures, which founded its investment thesis on the digitization of physical industries in 2015, is currently seeing that long-term strategy pay off in a massive way. The firm recently achieved a $2.5 billion return on its investment in semiconductor company Cerebras Systems, marking a 17-fold gain from its initial $147 million total stake. This milestone highlights a growing market realization that the traditional moats protecting pure software companies are eroding as generative AI tools make coding increasingly accessible.

Lior Susan, founder of Eclipse, argues that the future of industry lies in sectors that cannot be easily replicated by AI-generated code. While software development has become commoditized, the creation of physical infrastructure—such as semiconductors, robotics, and energy systems—requires complex supply chains, clean rooms, and specialized manufacturing capabilities that software alone cannot replace. This shift has captured the attention of both public markets and elite founders, evidenced by the record-breaking valuations of industry giants like TSMC and Micron.

This trend is reflected in the explosive growth of Eclipse’s own portfolio. Companies within their ecosystem, spanning defense, robotics, and energy, raised nearly $15 billion in the last year alone, with $4.5 billion secured in the first quarter of 2026. Major funding rounds for companies like Wayve, True Anomaly, Bedrock Robotics, and Oxide Computer underscore the massive capital influx into hardware-centric startups. Eclipse served as the original Series A investor for each of these ventures, validating their early commitment to physical-world technologies.

Beyond the immediate impact of AI, Susan points to a rare convergence of forces fueling this growth: capital availability, surging customer demand, elite talent migration, and supportive government policy. With the U.S. government increasingly prioritizing domestic production through subsidies and strategic regulation, the environment for building industrial-scale, hardware-integrated companies has reached a historic peak. For investors and entrepreneurs alike, the focus has moved decisively from the virtual to the physical.