In the 2010s, the startup world was led by software-as-a-service (SaaS) companies promising to disrupt industries with cloud-based solutions. Venture capital poured into these companies as fast as they could launch new software. But times are changing. While software is still essential, today’s most ambitious entrepreneurs are taking on complex hardware challenges in industries like manufacturing, defense, robotics, and space—and venture capital is following them.
A New Era of Hardware Innovation
One company leading the hardware revolution is Brooklyn-based Nanotronics, an advanced manufacturing firm backed by Peter Thiel’s Founders Fund. Nanotronics is reimagining how artificial intelligence (AI) and automation can transform factories. CEO Matthew Putman explained that his early fascination with the “Star Trek” Replicator—a device that could create anything out of thin air—inspired him to create a waste-free production system, starting with semiconductors.
“Manufacturing has always been about transformation,” Putman said. “Our goal is to bring that transformation to a new level by integrating AI and automation in ways that were previously unimaginable.”
Nanotronics uses advanced AI, robotics, and nanosensors to revitalize U.S. manufacturing and ensure the country remains competitive. Their AI-driven solutions streamline production, enhance precision, and reduce costs, helping manufacturers tackle today’s challenges with modern tools.
Their latest innovation, the Cubefab, is not just an AI system for factories. It’s a modular factory explicitly designed for the AI era. “Cubefab represents a new paradigm in manufacturing,” Putman said. “It’s a modular system controlled by an AI nerve center, capable of being configured to produce everything from computer chips to pharmaceuticals.”
The Rise of Hard Tech Founders
Putman is one of many founders who bypassed SaaS to focus on complex and costly hardware challenges. This wave of hardware entrepreneurs has raised billions in recent years, reshaping the future of technology.
Nanotronics isn’t alone. Anduril Industries, founded by Palmer Luckey, the visionary behind Oculus, is another major player. Anduril builds advanced autonomous systems for national defense, blending software expertise with groundbreaking hardware to enhance military capabilities. Their mission is to “rebuild the arsenal of democracy” by tackling defense challenges that software alone can’t solve.
Hadrian is also contributing to this hardware renaissance by improving efficiency in aerospace and defense. By building automated precision component factories, Hadrian is transforming the production of parts for rockets, satellites, and drones—laying the groundwork for faster, more efficient space exploration and national security efforts.
Solving the World’s Hardest Problems with Hardware
The shift toward hardware reflects a growing belief that software alone cannot solve the world’s most pressing challenges. Whether building autonomous defense systems, modernizing factories, or even manufacturing in space, these companies are reshaping the physical world in ways software companies cannot.
For companies like Nanotronics, focusing on complex hardware challenges is about innovation and national competitiveness. After years of U.S. manufacturing jobs moving overseas, Nanotronics is working to bring advanced manufacturing back to the U.S., empowering industries to produce high-quality goods more efficiently.
“Revitalizing manufacturing in the U.S. isn’t just about economics; it’s about innovation,” Putman said. “By bringing production closer to home, we can iterate faster, innovate more freely, and maintain control over critical technologies.”
A Shift in Venture Capital Focus
This hardware renaissance marks a significant change in venture capital. In the last decade, investors were drawn to SaaS companies for their high margins, fast growth, and scalability. Now, they’re backing entrepreneurs who are willing to take on enormous hardware problems that demand a longer timeline and deep expertise. Companies like Nanotronics, Anduril, and Solugen, which are revolutionizing chemical manufacturing through synthetic biology and AI, are part of this new class of VC-backed ventures.
These companies share a common approach, blending software, robotics, materials science, and AI to unlock new possibilities across industries. No longer is disruption limited to code—these startups are building tangible, functional products necessary for the future.
This shift extends beyond defense and manufacturing. Standard Bots, for example, makes AI-powered robotic arms accessible to industries that never expected to adopt advanced robotics. Monumental Labs is changing architecture with AI-driven robotic systems that reduce the cost of producing ornate stone structures.
Hardware Is Cool Again
For entrepreneurs looking to attract venture capital today, the message is clear: SaaS is no longer the only game in town. Solving hardware challenges, especially those that combine AI, robotics, and manufacturing, is where the future is being built. As venture dollars flow into these areas, the companies solving the most complex problems will likely create the most value in the future.
Nanotronics and its peers are proving that the most exciting innovations today are rooted in hardware. These startups aren’t just imagining a digital future—they’re building it, one factory, robot, and invention at a time. They are reshaping industries, tackling global challenges, and making hardware cool again.
“At the core, we’re problem solvers,” Putman said. “We see challenges in the physical world, and we apply the best technology to address them. That’s where true innovation happens.”
Featured Image Credit: Photo by RDNE Stock project; Pexels
