Hard tech used to be a hard sell in Silicon Valley. Now, a major venture firm is staffing up to invest in it.
Felicis, the Bay Area venture capital firm best known for bets on Shopify, Notion, and Mercor, has hired Graham Littlehale as a partner to invest in aerospace, defense, energy, manufacturing, and robotics, the firm told Business Insider.
Littlehale joins from Point72 Ventures, where he was an early member of its national security investing team. His investments there included Stoke Space, which is developing reusable rockets, and Rune Technologies, which builds software for military logistics.
The hire signals that Felicis is doubling down on companies building for the physical world. The firm has already backed CoreWeave, which provides AI companies with access to advanced chips; Crusoe, which develops AI data centers; and Skild AI, which is building a general-purpose "brain" for robots.
"The physical world is entering its own software moment," said Aydin Senkut, an early Google employee who founded Felicis two decades ago. "Graham has spent his career backing founders at the forefront of hard tech transformations, making him a natural fit to help deepen Felicis's commitment to the founders redefining the physical economy."
Across the valley, investors are paying renewed attention to hardware as AI moves from chatbots into machines, costs fall, labor shortages grow, and geopolitical pressures push companies to reshore supply chains.
Robotics and physical AI startups, which build machines that operate in the real world, raised $16.3 billion across 492 deals in the first quarter of 2026. It was the strongest quarter on record for both capital invested and deal count, according to PitchBook.
Littlehale has been making bets on physical technology long before it became fashionable. He began his career a decade ago, investing in natural resources and energy infrastructure.
"When I was 22 and investing in energy, and my friends were investing in SaaS, I was like, 'I get to go see an oil rig, and I think that's way more cool,'" Littlehale said. After working on commercial expansion at self-driving startup Nuro from 2021 to 2022, Littlehale realized he missed investing and joined Point72 the following year.
At Felicis, Littlehale plans to focus on "manufacturing foundation models," or AI systems that could take a product from concept through production. He is also interested in digital tools that accelerate hardware development and robots designed for industries, including construction.
Littlehale thinks robotics foundation models may follow the reverse trajectory of large language models. Chatbots started with broad, general-purpose models that were later specialized. Robots, he said, may have to begin by mastering individual tasks, then combine those skills into more general intelligence.
"The idea is, 'Let's fold a bunch of laundry and make a bunch of coffees, and then we will have enough things that are close to each other that we can generalize,'" he said.
Littlehale will also pursue investments in space and undersea technology, two areas he considers critical to US economic resilience and national security. Both sectors have become crowded and, at times, overhyped, he said, though opportunities remain for investors willing to take a longer view.
He pointed to his recent investment in Endurance Energy, a startup developing technology to generate geothermal energy from heat beneath the ocean floor.
"That is not something you can invest in based on a hype cycle," Littlehale said. "It is a decadeslong bet."
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Rya is a senior reporter at Business Insider covering physical AI and robotics. She writes about factory automation, humanoid robots, and the race to collect the real-world data needed to bring AI into the physical world. She previously worked at The San Francisco Standard, where she reported on tech culture and autonomous vehicles. She has a bachelor’s degree in history and politics from Pomona College and a master’s in history from the University of Cambridge. Rya lives in San Francisco. Contact her at [email protected] or on Signal at rjetha.07. Use a personal email address, a nonwork WiFi network, and a nonwork device. Here's our guide to sharing information securely.
