In Silicon Valley, Hardware Is Having a Moment Again

After ChatGPT debuted in 2022, the venture capital industry raced to invest in artificial intelligence start-ups.Most V.C.s were hoping to piggyback off the success of OpenAI’s transformational chatbot.

But Wen Hsieh saw the opportunity a little differently.A hardware investor for most of his career, Mr.Hsieh recognized that an A.I.

boom would create demand for the technology to power it.In 2023, he started Matter Venture Partners to focus on that bet.It was a prescient move: Hardware is now Silicon Valley’s new buzzword.A growing number of investors are putting their money into physical technology as A.I.

disrupts venture capital’s bread-and-butter: software.In 2020, venture capital firms invested $23 billion in so-called deep tech, a category which includes robotics, space, quantum and other hardware technologies.

So far this year that number has grown to $90 billion, according to Pitchbook.“I couldn’t have imagined the day” when so many investors would become interested in hardware, Mr.Hsieh said.That interest has served him well: Today, Matter is announcing that it has raised $450 million for its second venture fund to invest in early stage hard-tech companies.

The fund-raising round includes a range of investors closely tied to the A.I.boom, including ASML and Taiwan Semiconductor Manufacturing Company.

Kleiner Perkins, where Mr.Hsieh was a general partner and worked for 17 years before cofounding Matter, has previously invested in the firm.Matter invests in six core categories: semiconductors, A.I.

infrastructure, energy, robotics, advanced manufacturing and quantum computing.Those industries have been viewed with caution by much of the venture industry because of the high upfront investment required to develop and build new physical products.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.

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