When Lior Susan started Eclipse Ventures in 2015, the firm’s thesis of digitizing the physical world wasn’t particularly popular in Silicon Valley.
**Key Takeaways:**
* **Pioneering a Physical-World Thesis**: Eclipse Ventures, founded by Lior Susan in 2015, made a contrarian bet on digitizing the physical world during an era dominated by enterprise software, a strategy now yielding massive returns.
* **The Untouchable Moat of Hard Tech**: With AI democratizing software creation (“vibe code”), the true competitive advantage is shifting to companies building physical infrastructure like semiconductors, robotics, and defense systems, which require complex, tangible assets.
* **Perfect Storm for Innovation**: A unique alignment of capital, surging customer demand, specialized talent, supportive government policies, and advanced technology (AI) is creating an unprecedented environment for “builders” in physical-world tech.
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## Eclipse Ventures: The Unsung Visionary Now Reaping Billion-Dollar Rewards from the Physical World
In the bustling, often myopic world of Silicon Valley venture capital, conviction is a currency. For Lior Susan, founder of Eclipse Ventures, that conviction centered on a belief that the future of innovation lay not in pure software, but in the gritty, tangible realm of the physical world. When he launched Eclipse in 2015, this thesis was anything but fashionable. “It was the era of enterprise software and SaaS, and it felt fairly lonely the first couple of years,” Susan candidly admitted on stage at a recent StrictlyVC event in San Francisco.
Fast forward nearly a decade, and that lonely path has converged with the mainstream, placing Eclipse Ventures squarely at the epicenter of a resurgent tech narrative. The firm’s foresight, once an outlier, is now validated by a string of spectacular successes, none more prominent than its early investment in Cerebras Systems.
### The Cerebras Payoff: A Billion-Dollar Validation
The story of Eclipse and Cerebras Systems is a testament to the power of a long-term vision. In 2016, a mere year after its inception, Eclipse Ventures made a foundational $6.5 million Series A investment in Cerebras Systems, a company pushing the boundaries of artificial intelligence computation through its groundbreaking wafer-scale semiconductors. This initial bet, made when many were still chasing the next SaaS unicorn, paved the way for a staggering $2.5 billion total return when Cerebras recently entered the public markets.
Over the years, Eclipse continued to back Cerebras, investing a total of $147 million into the semiconductor innovator. The recent IPO, priced at $185 per share, generated an astonishing 17-fold return on that cumulative investment, according to Eclipse. For Susan, this monumental windfall is not merely a single success story; it’s the emphatic validation of a long-held belief: that because a remarkable 85% of global GDP is intricately tied to the physical world, strategic investments in companies bridging hardware and software could unlock immense, often overlooked, value.
### The New Moat: Why “Vibe Code” Can’t Build Wafers
Susan argues that the broader tech landscape is finally catching up to this reality. Public markets are reflecting it, with shares of semiconductor giants like TSMC and Micron recently hitting all-time highs. Simultaneously, a growing cohort of elite founders, disillusioned with the perceived saturation of pure software, are increasingly eager to tackle the complex challenges at the intersection of hardware and software.
“I think people understand that the real moat in software is gone. You can vibe code pretty much whatever you want,” Susan asserted, echoing a sentiment that has recently sent many SaaS stocks tumbling. The pervasive belief now is that readily available, powerful AI models, such as Anthropic’s Claude Code or OpenAI’s latest iterations, can empower enterprises to rapidly generate their own bespoke software tools, eroding the unique value proposition of many off-the-shelf solutions.
However, this AI revolution, while democratizing software, simultaneously highlights the enduring, irreplaceable value of physical infrastructure. “What you cannot do with ‘vibe code’ is manufacture wafers, because you need machines and silicon, and they need clean rooms, and a bunch of other things,” Susan emphasized. This distinction forms the bedrock of Eclipse’s strategy: invest in companies that build the foundational, tangible components that AI, or any advanced software, ultimately relies upon – and cannot replicate with a few lines of code.
### A Portfolio Spanning the New Frontier
The investor enthusiasm for physical-world tech isn’t confined to just semiconductors. Eclipse’s diverse portfolio provides a vivid illustration of this broader trend. The firm backs companies spanning critical sectors like robotics, energy, and defense, all of which demand deep integration of physical engineering and intelligent software.
The numbers speak volumes about the accelerating momentum. In the firm’s first eight years, Eclipse’s portfolio companies collectively raised less than $4 billion in total. In stark contrast, last year alone, these companies garnered nearly $15 billion from outside backers, with that late-stage momentum soaring to an impressive $4.5 billion in Q1 2026. This exponential growth underscores a dramatic shift in investor appetite and market perception.
Indeed, the recent follow-on rounds across Eclipse’s portfolio are a testament to a track record that any venture firm would covet. The haul includes massive late-stage deals this year, such as $1.2 billion for Wayve (a leader in autonomous driving), $650 million for True Anomaly (pioneering space security and defense), $270 million for Bedrock Robotics (innovating in industrial automation), and $200 million for Oxide Computer (reimagining data center infrastructure). Crucially, Eclipse was the Series A investor for all four of these high-profile companies, demonstrating their ability to spot and nurture foundational technologies from their nascent stages.
### The Five Aligned Forces: A Perfect Storm for Builders
While the transformative power of AI is undoubtedly a significant catalyst, whether as an infrastructure input (chips, data centers) or enabling robotics, Susan argues that the current surge in physical-world tech is driven by an unprecedented confluence of factors. Beyond just advanced technology, he identifies four other critical forces that must align for this market to truly thrive: capital, customer demand, talent, and policy.
1. **Capital:** A growing pool of investors, recognizing the diminishing returns and increasing competition in pure software, are redirecting significant funds towards hard tech.
2. **Customer Demand:** Enterprises and governments are increasingly seeking robust, resilient, and secure physical solutions, driven by geopolitical shifts, supply chain vulnerabilities, and the need for greater operational efficiency.
3. **Talent:** A new generation of engineers and entrepreneurs, inspired by breakthroughs in AI and robotics, are moving away from traditional SaaS roles to tackle complex, multidisciplinary challenges in sectors like semiconductors, space, and advanced manufacturing.
4. **Policy:** Crucially, the U.S. government is actively encouraging these strategic industries through significant subsidies (like the CHIPS Act for semiconductors) and favorable regulations, aiming to bolster domestic capabilities and national security.
5. **Technology (AI):** AI acts as an accelerant, making complex systems viable and efficient, from advanced robotics to sophisticated defense platforms.
“This is the first time I believe in America ever, from Henry Ford and Carnegie, those five forces are aligned,” Susan declared, drawing a historical parallel to past industrial revolutions. “For builders like us, this is the best time to build those companies.”
### Bottom Line
Lior Susan and Eclipse Ventures represent a powerful example of how a contrarian, long-term vision can ultimately define a new investment frontier. By steadfastly focusing on the physical world and its profound digital transformation, Eclipse has not only delivered extraordinary financial returns but has also played a pivotal role in validating a critical shift in the broader tech ecosystem. As the “software moat” continues to erode under the influence of AI, the tangible, hard-to-replicate advantages of physical infrastructure are becoming the new battleground for innovation and investment, promising a future built on real-world solutions.
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