Eclipse's Lior Susan on $12.5B AUM and the Bet on Physical Industries

Eclipse spent 8 years investing in manufacturing, space, semiconductors, defense & mining while the rest of Silicon Valley funded SaaS. Lior Susan says the math was never close. Lior Susan is the Founder & CEO of Eclipse, the Palo Alto firm he started in 2015 with a $125M debut fund alongside Pierre Lamond, who was 85 at the time & had already spent a career at Fairchild Semiconductor under Gordon Moore, co-founded National Semiconductor, & put in 27 years as a GP at Sequoia Capital. Lamond is 96 now and still mentors the team. "We never thought ourselves as venture capital. We call it operators with capital because we are operators with capital." Eclipse manages approximately $12.5B and closed $1.3B in April 2026 across Eclipse Fund VI and Early Growth III, its largest raise to date. The firm's 2016 Series A into Cerebras returned roughly $2.5B at the $185 IPO price in May 2026 on a total of about $147M invested. Eclipse portfolio companies have raised $15.9B in 2026 alone, including $1.2B for Wayve, $650M for True Anomaly, $270M for Bedrock Robotics, $220M for VulcanForms and $200M for Oxide. In September 2026, Eclipse incubation Noetive came out of stealth with a $41M seed led by the firm. Susan was named to the 2026 Forbes Midas List. Lior Susan: https://www.linkedin.com/in/liorsusan/ Molly O’Shea: https://x.com/MollySOShea Sourcery: ⁠https://x.com/sourceryy 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝐋𝐈𝐍𝐊 YouTube: ⁠https://youtu.be/fj9pHUbJhp4 https://youtu.be/fj9pHUbJhp4 𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒 • Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery • Zone https://zonefrontier.com/—develops next-generation data center campuses, partnering with AI companies, site developers and technology leaders to bring compute online faster and at scale. Visit: https://zonefrontier.com https://zonefrontier.com/ • Turing https://turing.com/sourcery—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery • VCX https://fundrise.com/vcx—VCX is the public ticker for private tech, allowing investors of all sizes to invest in venture capital. View The Portfolio at http://GetVCX.com http://getvcx.com • Deel https://www.deel.com/sourcery—Deel is the global people platform that helps startups hire, manage, pay, and equip anyone, anywhere. Trusted by more than 35,000 fast-growing companies, Deel is the people platform that just works, so teams can scale without the chaos. Visit: https://www.deel.com/sourcery • Public http://public.com/sourcery–Investing platform Public just launched Generated Assets https://public.com/generated-asset, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. https://public.com/sourcery Follow Sourcery for the latest updates! https://www.sourcery.vc https://www.sourcery.vc/ Disclosure Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time. 𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒 (00:00) Lior Susan, Founder & CEO at Eclipse (01:02) The story behind Eclipse (02:35) How Lior met Pierre (07:33) Why physical companies need operators (12:35) How Mind Robotics was spun out of Rivian (15:41) Why Lior started Eclipse (18:21) Why building physical companies is so hard (24:33) Inside Eclipse’s physical industry bet (36:01) Building the "Eclipse Economy" (40:08) Why physical infrastructure creates jobs (41:19) From banana farmer to VC (43:37) What it really means to support a portfolio company (46:00) Who inspires Lior?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  You want to back startups that make actual physical stuff.

• 0:03Molly O'Shea?

  The firm is at 12.5 billion AUM, which might be changed already. I'm not sure.

• 0:09Speaker 02

  I hope it's changed. To the upside, we just named two IPOs, both Cerebras that we did and SpaceX, both in physical industries that are doing extremely well. What you cannot fight against is 85% of the world GDP, roughly 100 trillion, isn't the physical world.

• 0:23Molly O'Shea?

  You're an experienced banana farmer.

• 0:24Speaker 02

  That's probably my number one achievement in life.

• 0:27Molly O'Shea?

  What were the biggest lessons that you learned banana farming?

• 0:31Speaker 02

  It's hot in summer, but it's also the first time I was just like, I need to build physical thing. This is like my thing. Eclipse have today 90 companies total. The only of them we build it. Yeah, there's some amazing companies like Bright Machines, Bedrock and Mitra and bunch that we didn't announce yet. We never thought maybe ourselves as a venture capital. We call it operators with capital because we are operators.

• 1:02Molly O'Shea?

  All right, Lior, welcome to Sorcery.

• 1:04Speaker 02

  Thank you. Great to be here.

• 1:06Molly O'Shea?

  So Eclipse is on a run.

• 1:09Molly O'Shea?

  Cerebras had a huge IPO.

• 1:11Speaker 02

  Yeah.

• 1:11Molly O'Shea?

  The firm is at 12.5 billion AUM, which might be changed already. I'm not sure.

• 1:17Speaker 02

  Yeah, I hope it's changed to the upside, yes.

• 1:21Molly O'Shea?

  So for people who don't know Eclipse,

• 1:23Speaker 02

  Yeah.

• 1:24Molly O'Shea?

  can you give a little bit of the background?

• 1:26Speaker 02

  Yeah, I think the short story, we started the firm 11 years ago. I know that we are counting as a venture capital for our limited partners. We never thought maybe ourselves as a venture capital. We call it operators with capital because we are operators with capital. We all left industries in order to go and build a firm that allow us to build companies in the industries that we are passionate about. And that's physical industries. And yeah, you're right, maybe in the first eight years, manufacturing and space and semiconductors and defense and mining was very much kind of in the corner. When like software was doing really well and enterprise softwares and cryptos and consumer and fintech. And it definitely changed in the last two years.

• 2:11Speaker 02

  And yeah, it's, it's just, I couldn't be more excited about just the opportunities that there is right now in the world to build. And it feels like the best founders wants to build them. It feels like the world needs more of them. And yeah, we just named two IPOs, both Cerebras that we did and SpaceX, both in physical industries that are doing extremely well. So exciting times.

• 2:33Molly O'Shea?

  Really exciting. We just had Andrew on and that was a really fun interview.

• 2:37Speaker 02

  Yeah, he's funny.

• 2:38Molly O'Shea?

  He's great. He's funny.

• 2:39Speaker 02

  He's really funny. Yeah.

• 2:41Molly O'Shea?

  He did name, at the end, when I asked, you know, who inspires you, like, who are those kinds of people for you? And he specifically called out Pierre, your partner. Can you tell more about Pierre? I know we were talking about this off camera, but this story is insane.

• 2:57Speaker 02

  Yeah, story is pretty crazy. We were like this old couple in the first seven years of Eclipse. But yeah, yeah, I left when I was living flex and I was thinking to start a vehicle that will allow me build and invest in companies in the physical world. I got introduced into Pierre. And this is early 2015. I'm 31 years old and Pierre is 85 years old. And we are in a meeting and like always, I'm not doing my homework and I don't know who is the guy. See this older-ish person stepping into the room, wearing a suit, full cologne. And he's like, okay, young man, what do you want to talk about?

• 3:38Speaker 02

  And I'm like, I don't know, got introduced, but you know, I'm thinking to start a firm or a vehicle that will allow me build companies in the hardware space. And in a very Pierre fashion, after 10 minutes, he interrupted me and say, okay, young man, we're going to start a film together. And I'm like, sir, I actually A, didn't finish high school, B, never invest dollar in my life. I'm a builder. I know how to build. I'm excited to build companies in the sectors. He say, hey, I will teach you everything you need to know about that industry. And like four months later, Eclipse born. So we, yeah, Pierre is a special, special man. And as I told you off camera, I'm taking him for dinner tomorrow for his 96th birthday.

• 4:24Speaker 02

  And he's still mentoring most of us at the team, but he worked with us seven years full time in the office and brought a lot of what I think maybe this industry was originally. When naturally he started at Sequoia, because Dawn was his VP sales at National and they left to start Sequoia. And he was there for 35 years. And we, we had the huge privilege to just hear the stories and learn from him of what that maybe industry was originally designed by. And it's actually very different today. If you're thinking of, you know, they were all operators, they were all hands on, they did very few deals. They had a very gentleman relationship between the firm.

• 5:06Speaker 02

  He told us so many stories about Sequoia and Kleiner saving companies for each other, something that

• 5:11Molly O'Shea?

  What?

• 5:12Speaker 02

  Can you imagine calling another VC today and it's like, I have an issue with this company. I need you to come put capital and help me save that company. It will never happen. You probably get the phone call of like, all of my company is doing amazing up to the right. Come preempt around. But yeah, Pierre and I was that old couple. And I said then his 95 years birthday on camera, that you know, for me, he is somewhere between like a father, a partner, mentor, friend, kind of all of the above. And it's probably one of the most amazing person I ever met in my life.

• 5:53Molly O'Shea?

  And what kind of work culture did he bring to Eclipse?

• 5:58Speaker 02

  Yeah, we, it's, I grew up in the special forces. He grew up naturally in World War II. Got himself moved from France to US for school, met Gordon Moore and got into Ferrychild, left Ferrychild to do National, left National to start Sequoia. So I say he's very disciplined person. It's kind of the best, you know, three values I can think about Pierre is discipline, discipline, discipline. And I think where I grew up, and that's also maybe nicely connect to the companies that we like to build in this physical world. Like discipline is really important.

• 6:41Speaker 02

  You cannot fake it till you make it when you're manufacturing something because the yield will just be very bad. And he brought a lot of institutional knowledge of investing and managing your board and how you write your quarterly reports. And I think we, in some way, in our first year of Eclipse, we already operate in a way that maybe a firm that is 10 years around. Everything was much more institutional and, but he's also have a huge heart, although he trying to hide it.

• 7:15Molly O'Shea?

  Really?

• 7:16Speaker 02

  Yeah, he really cares. And you don't need to do,

• 7:21Speaker 02

  you don't need in your 90 years old person to go to the office every day to teach other people how to do venture. You don't.

• 7:29Molly O'Shea?

  Yeah, well, it seems to be working.

• 7:32Speaker 02

  Yeah.

• 7:32Molly O'Shea?

  So you were founded in 2015.

• 7:34Speaker 02

  Yeah.

• 7:35Molly O'Shea?

  You raised your last fund, it was split between two funds about three months ago. 1.3 billion dollars? Okay, so I want to go through your investing strategy because you did say you're operators with capital. It's completely different from the traditional kind of like VC game that's happening here in Silicon Valley because of that hands-on approach.

• 7:58Speaker 02

  Yeah.

• 7:58Molly O'Shea?

  So when you talk about venture equity and this incubation strategy, how does that work? And what are some of the companies that come out of it?

• 8:05Speaker 02

  Yeah, I would say, A, I don't know if that model is perfect for everyone, just to be clear. I do think that companies that are building in the physical world, it's actually not make sense to get only passive capital on your boat. You needs to know manufacturing and supply chain. You need to know how to deal with CapEx. You need to know how to deal with the government. You need to know how to think about subsidies. You need to know how to leveraging debt versus equity. You need to know how to hire the right engineering team, regardless if it's a MECI, double E's, how to think about like in holistic, because you build a system.

• 8:45Speaker 02

  You don't build like an app that you probably, if you're good enough a founder, you just take the capital and you build a great app and there is a great outcome. I also think that if you're looking on the generational change, we start kind of mobile to cloud. So it's like internet to mobile to cloud to SaaS enterprise software. And I think where the last 10 years, it's what we are seeing is basically this full stack of like tech companies taking a full industry. Cerebras is taking the compute industry, SpaceX is taking the space industries and a bunch of others. And this is a much more of a complex businesses to build, much more bigger if you're successful. But our model was, we were on the other side as an operators.

• 9:31Speaker 02

  And we felt like what will be the most optimal things that we could have in our investors in our previous life? And we felt like we just want to bring that model, that it's operators on your board, bringing high conviction, a lot of capital and a lot of expertise and knowledge, how to build those businesses.

• 9:50Speaker 02

  So that's kind of the, just the model.

• 9:53Speaker 02

  On the incubation is two years into it, it's actually also a funny Pierre story. I'm like, feeling my hands start shaking and I'm like, God, I need to build again. And so I'm going to Pierre and I was like, sir, I kind of feel like building a company and he's like, shut down the door. And he's like, young man, we're investors now. We're not building companies anymore. And I'm like, can, can we do both? And he's like, no. And he's like, your lack of discipline just lecture me for like an hour. And I was able to convince him. And yeah, it's just amazing. I mean, I think Eclipse have today 90 companies total. The only of them we build it.

• 10:33Speaker 02

  And yeah, there's some amazing companies like Bright Machines and Bedrock and Mitra and Mind and also, and just a bunch that we didn't announce yet. Peak Energy, we talked about battery that we also incubate. And that's just, A, we did it from a selfish point of view because we just love building companies. I didn't want to stop building companies now when I have also the investor hat. And B is just keeping our, our operating skills fresh.

• 11:05Speaker 02

  Because when you, I think when you're doing the transition from being an operator to investor, ten years into it, you kind of are not fresh operator anymore. Not in where technology is, not where their network or talent or customers. And just building companies keeping us fresh.

• 11:21Molly O'Shea?

  So what is your process to starting the companies?

• 11:23Speaker 02

  There's no process.

• 11:24Molly O'Shea?

  But how do you pick the categories?

• 11:25Speaker 02

  Yeah, it's uh, it's like, I don't think you can manufacturing this thing. That's kind of what I learned in the last like eleven years of uh, of doing that uh, inside the Eclipse, inside the firm. Every time I'm trying to build like a system around that, I failed. Every time that I think like, ah, if I only put this thing here, I would be able to build two more, I failed. Um, so um, I think, you know, each of those things is a snowflakes. And some cases, someone coming to us and say, hey, I want to build this new H B M memory. And I want to do it with you. And I'm like, amazing. And in some case, I'm like, oh, the world is going into hydrogenous A I.

• 12:05Speaker 02

  If I can connect multiple of silicones and optimizing them from the networking to the kernel to the orchestration. I actually will be able to build the most efficient, high-performance, lower-cost A I data centers. There is not a company exist, I just go build that and recruit the team. So, and in the case of Rivian and R J, we actually carve out mine outside of Rivian with him. So it's like three very different models I just described, and there is like ten more.

• 12:33Molly O'Shea?

  Damn. Can you go into one of those companies? Maybe that, maybe mine.

• 12:38Speaker 02

  Yeah, yeah, I mean, we um, the one thing we really like to build is um, I, I think about it like as a, as a clusters. It's like an industry that we know uh, and robotics, we both, I mean, a lot of us build robotics in our operating life. And, and then in Eclipse, and we've been doing robotics and physical A I for a long time before it was a physical A I. But uh, we are friends with R J, G ten, one of the founders, uh, one of the partners of Eclipse, was one of the founding team with him. Um, and I've been talking with R J a long time about this robotics and manufacturing. And we probably talked like three years before we actually started mine together.

• 13:19Speaker 02

  And we were like talking about like general purpose robotics in manufacturing landscape. It needs to be mobile, it's can, it don't need to look like a humans or no humanoid. Needs to have like high dexterity, you need a lot of data in order to train the model. And as we were talking over the years, he's like, you know, we have a team, small team inside Rivian that focusing on that. And we did a robotics dinner in my house uh, with him and a bunch of other founders. And in the end of the dinner, uh, the wine helped. I told them, what do you think about us spinning out this thing? And he's like, huh. And I'm like, you can win all wars, we can attract better talent that will not necessarily go walk today.

• 14:04Speaker 02

  Uh, for that problem inside Rivian, we can attract external capital, so it's not on your balance sheet. And it's like Switzerland, you can walk with everyone. And you know, naturally, uh, the rest is a history and we all go to carve out and start the company with him and Rivian. And yeah, company is, is just flying. Uh, and it's just really excited to see all of the pieces coming together and we're going to show the first product this year.

• 14:30Molly O'Shea?

  It's just so crazy to hear how close the metal you like actually are. I mean, I've had many conversations with many different C E Os and investors and that sort of thing, but like, I don't even know what you said previously when you were talking about building a data center. I don't know what you're saying.

• 14:46Speaker 02

  I went too technical.

• 14:48Molly O'Shea?

  But that's awesome. So like, I guess like taking a step back on the macro scale of things. I talked about this with Andrew on the pod, I talked about this also with um, with Tony Kim of BlackRock. Because we were going through all the different categories. And it's a common theme that's, that's very ever-present between everyone. And it's like, the original industries that built up Silicon Valley really were in the shadows for like decades. And now they're back again. And now you have like, I'm not gonna say tourist V C's, but now you have a lot of these like competitive V C's coming in claiming territory on it. But how, okay, if you're in the founder's seat, how do you decipher who to work with?

• 15:33Molly O'Shea?

  And like where they actually have expertise?

• 15:36Speaker 02

  Yeah, I would say um, the reason I started Eclipse actually was from a fundamental view. Um, and it's actually also was on the back of me spending a full year in China. And see how they innovate in the physical industries. And naturally, um, people don't know, but China essentially built roughly twenty trillion dollar economy based on the physical world. And they build the entire systems on these five forces. Talent, uh, policy, capital, technology and customer demand. And they align those five forces in a way that let the economical fly well, fly in. And um, it's actually very hard to compete against them as a standalone company.

• 16:16Speaker 02

  And my view was, if we don't do it in the Western world, we kind of screwed. Um, and there's no reason for us. And, and, and of course, it was from a selfish point of view because I love building those businesses. I was never a software guy, I was always a hardware guy. Um, there's just, there is no reason why not to do it. And after talking with a bunch of firms, uh, as I was leaving Flex, it was clear to me that a lot of my generation kind of came much more from the software world. That world sounds to them very scary, like low gross margin, high capex, low, long cycles. But that's what I love doing. And I also, my view was as the world is moving more from globalization to a de-globalization.

• 17:01Speaker 02

  Countries will not be able to relying on their energy, manufacturing, defense, using from, buying from other countries. It was clear to me that it's going to happen now. I was wrong on the time, took much longer than I thought, kind of COVID was the really first one. The child of vulnerability and as a result, we were seeing much more of the on-shoring start kicking in. But um, yeah, I mean, um, what you cannot fight against is eighty-five percent of the world G D P, roughly a hundred trillion, is in the physical world. So if you just, you know, one-on-one founder and you're thinking about what is the biggest problem I can solve? You think about, okay, what is the largest town? The largest town is manufacturing, largest town is energy, is defense, is transportation, is shipping, is mining.

• 17:45Speaker 02

  Agile software, nothing about all of agile software people in the world, is just combined less than twenty billion. Vulcan forums that working on metal manufacturing, metal manufacturing is a three trillion dollar industry. When we started Eclipse, I don't have the numbers, but my guess, it was quite a lot of money going into enterprise software. And probably zero that going into metal manufacturing, it just didn't make sense to me. Um, goes back to the question of what founders that's starting uh, wants to think about. Um, it's fucking hard. It's really hard to build these companies, it takes time and it's kind of, I always, I have this thing in my brain.

• 18:26Speaker 02

  It's like, you have this five hundred plane that all needs to land perfectly, that's kind of what we do. Um, the wafer needs to show up to the cold plate, to the P C B A, um, to the uh, full systems, to the kernel software, to the customers, to get the customers, to get the yield, and everything needs to work perfectly. It's just really hard to do, but uh, I cannot do anything else in life. I'm just, that's the only thing I'm passionate about.

• 18:57Molly O'Shea?

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• 19:41Molly O'Shea?

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• 20:23Molly O'Shea?

  A I needs more than chips, it needs power, land, and infrastructure. Zone develops next-generation data center campuses, partnering with A I companies, site developers, and technology leaders to bring compute online faster and at scale. Zone is building the foundation of the A I frontier. Visit zonefrontier.com to learn more. That's zonefrontier.com to learn more. I mean, it is interesting, uh, S K Hynix like recently went public. And when you look at the memory world, there's literally three players. Like, we went so long in that there's only three players and there's massive shortage, as you would know, in the chip industry.

• 21:04Speaker 02

  Yeah, totally. And, and you, and it's like, that's kind of was my point, I was like, okay, great, Micron, S K Hynix, Samsung, uh, if you're looking on, on H B Ms. Um, and I'm like, when I, again, when I started Eclipse, I was like, it's really odd. Because there is like ten thousand SaaS companies. How it can be that there is only three memory companies? And then when you actually go and go deep, you are like, okay, it's like, you need capex, you need a lot of engineering. You need, you know, the five forces I was talking about, and I'm like, that's what Eclipse are exploiting. And we are building new memory companies. So we are like, we, we are just, uh, it's, it's like the, feels like the, for the best time in the history of humanity to build those industries again.

• 21:47Molly O'Shea?

  So how do you then overlay the venture model on top of these industries? And then how do you refute the kind of, I guess, thesis or prose that people say, these industries are not going to produce SaaS multiples? I know that's technically flipping now.

• 22:06Speaker 02

  I actually think it's, we're going to do it.

• 22:08Molly O'Shea?

  With A I?

• 22:08Speaker 02

  It is better than SaaS multiples.

• 22:10Molly O'Shea?

  But uh, could you just explain that out?

• 22:13Speaker 02

  Maybe it's a little bit connect to the tourist uh, comment that you made before. Uh, I think we kind of, we as Silicon Valley and the venture overall, I think we kind of bullshit the world that SaaS and gross margin is the most important metrics.

• 22:28Speaker 02

  Naturally, what if you are a public company, if you're a real company, what matters is free cash flow. It's actually not gross margin. Gross margin is an indicator to potentially what your free cash flow going to be. You're going to trade based, the EPS is based on your free cash flow.

• 22:46Speaker 02

  And naturally, if you tell me you have an eighty-five percent gross margin business and you are, you know, not in the AGL software. You're a sales software now, we're trying to move so they don't think that I have anything really against the AGL. And you're building a new CRM again, because there is a million of them. And you're eighty-five percent gross margin, A, the TAM itself is not huge, is my guess thirty billion. There is a thousand companies doing a CRM. And what a lot of those SaaS companies happened, they, their growth was correlate with the, the way that they're burning money. And why is that? Is because we mechanically move the engineering spend from what's supposed to be in a COGS

• 23:31Speaker 02

  and an any normal thing to an R and D. And it was an accounting trick. So your gross margin is high, but you still need to continue hire engineers as the business is growing. In our world, you cannot do it. There is a hard COGS, an accountant will not let you. So maybe your gross margin will not be as high as the SaaS company. But at the end of the day, I'm a fundamental entrepreneur. And on fundamental base, I always ask the trick question, how big is the market? Twenty billion is not big enough.

• 24:00Speaker 02

  How differentiated is what you do in that market? And do you have the right team to actually go and solve that really tough problem? Because Tesla is what, mid-teens, kind of trade like the best SaaS companies in the world. Cerebras is like what it is, don't remember now, forty, fifty percent gross margin is trade way better than most of SaaS companies. Because they solve a really tough problem and a gigantic market and they get paid for it. And that's what I do for a living.

• 24:29Molly O'Shea?

  So I want to go through some of your portfolio.

• 24:32Speaker 02

  Yeah.

• 24:32Molly O'Shea?

  Because you have some really fun names in there. Cerebras is obviously one of them. You have Ursa Major, Vulcan Forms, which you mentioned, and Bright Machines, Augury, Skyrise, Oxide, which is really interesting. We should talk about that one.

• 24:44Speaker 02

  Talk about it, yeah.

• 24:45Molly O'Shea?

  Wave, Bedrock, True Anomaly, also very cool. And same with Redwood Materials, which is the next one I have, and Arc, the nuclear company, Verkata. You also have Anduril on there. But I guess to start with all of those and the different categories you're going after. Let's base it off the, the latest fundraise. So of the physical industries that you're going after, like what are the main categories?

• 25:07Speaker 02

  There is, when you raise money, in our world, we raise money from what's called ENF, Endowments and Foundations, and pension, like institutional investors. They always have this question in there when they do the diligence about portfolio construction.

• 25:21Molly O'Shea?

  Yeah.

• 25:22Speaker 02

  And I always have the exact same answers, like my portfolio construction is not to have a portfolio construction. And the main point here is like, we might do five memory companies now. That would not be a very good portfolio construction. But we, I see so much of like, people are calling me and say, hey, can you introduce me to Bedrock? And I'm like, okay, why? It's like, we must have a physical AI company in the portfolio. And I'm like, I actually don't must have anything. I must have the companies I'm obsessed with, unrelated to, to, you know, trying to say, oh, I must have one defense, one chip, one robot. We don't think like that.

• 26:01Speaker 02

  What I would say, what I think is really interesting in the market right now, we went really deep historically on semiconductor. And I think people think about semiconductor as chip, right? That's kind of what you have, people, there's so much around that. Capital equipment and testing and, and, and lithographies and supply chain and packaging. And subcomponents that going into these things. So that, actually that world is really, really big and it's growing in a rapid phase. We just talked about SK as a good example. So we really like it. We also really like a lot of new type of an energy sources.

• 26:40Speaker 02

  We think that energy is such a gigantic market and we did a play in nuclear and we have a play in sodium ion. And like peak energy and TNC and we have Redwood and the LFP and recycle and kind of second act. And we, we just did a gas turbine company. They're building a new, like a modern, just, you know, going to compete directly with Givon Nova on, on, on a very large gas turbine. So I think like in the energy sector, there's just a lot to do.

• 27:11Speaker 02

  There is, AI is definitely, and we are not doing anything in the foundational model or LLMs. We kind of catch AI in both sides and the picks and shovels to AI that we do a ton. And then we take an AI to the physical world, the physical AI. But there is so much to do there. Only is like, I, I know nothing about bubbles and valuation and things like that. I'm only know how to build companies, but I'm telling you from, from building, there's so much to build there.

• 27:39Molly O'Shea?

  What are you most excited about?

• 27:42Speaker 02

  I think, you know, we, I told that to my daughter. So she sees so many people coming to, our kids seeing, all, all day, there's people coming to our house that have been building companies with. So, you know, they, she's eleven years old, but she can go, she can take you down on term shit negotiation. Dangerous, dangerous.

• 28:04Speaker 02

  And she asked me like that, well, what do you think is, is like, which phase we are on building companies?

• 28:10Molly O'Shea?

  Damn.

• 28:10Speaker 02

  Yeah.

• 28:11Molly O'Shea?

  Wow.

• 28:12Speaker 02

  Yeah, yeah, yeah, because she, she, she born into it.

• 28:14Molly O'Shea?

  Yeah.

• 28:15Speaker 02

  She actually, our oldest born.

• 28:16Molly O'Shea?

  She's like, dad, how's the AUM doing?

• 28:18Speaker 02

  Yeah, exactly, yeah, exactly. How are you doing on like a DPI level? Yeah, yeah, yeah, she's very close to ask that question as well. That's actually her mom, it's not her, but this will be her as well. She actually born into Eclipse, so she is actually the same age exactly as the film. So it's kind of, yeah, it's super cool. But, and we have an Eclipse Kids Day. So we take every year the entire kids of Eclipse to visit two, three of our companies.

• 28:46Molly O'Shea?

  Oh, that's so fun.

• 28:47Speaker 02

  And then we end up in my house and like a little pool party and it's actually next week.

• 28:53Speaker 02

  So it's really cool that to see the kids really looking on how a robot like Maitreya moving a pallet or seeing like reliable how, you know, planes are moving or seeing Solaris, how drug is being manufactured. And then they, those kids ask me some really good questions. So, so she's knowledgeable. Anyhow, what I told her is like, listen,

• 29:14Speaker 02

  we are probably in the most interesting time that humanity ever had around building.

• 29:25Speaker 02

  And we are in the most cutting top of the, you know, the very edge of the spirit of building those businesses. And we better not screw that moment.

• 29:39Speaker 02

  Because we have capital and we have talent and we have government support and we have customer demands and technology to really. I do believe US can grow five, six, seven percent every year. I'm going to work really hard to see it coming true. And I think growth, both for companies and countries, solve a lot of problems. Because I think you can focus a lot of your time of like where to cut spend as a country or as a company, but you can also grow much faster. And I think it's maybe the first time, I used to say Henry Ford and Carnegie and actually changed, I changed it to, this is the best time in the history of this country to build companies.

• 30:20Molly O'Shea?

  That's very optimistic.

• 30:22Speaker 02

  Yes, yes.

• 30:23Molly O'Shea?

  That's good.

• 30:23Speaker 02

  Yes, I'm, I'm super optimist about this country and the opportunity.

• 30:28Molly O'Shea?

  We, we just had David Friedberg here recording and he went off the rails on that. You'll have to listen to that one. I can't share too much, but it was great. And he was also talking about how, for the most part, like, America, the economic system is backwards. Like you should not be getting forty percent on labor, taxed on labor. It should be, and fifteen percent on cap gains, it should be the opposite.

• 30:54Speaker 02

  Opposite, yeah.

• 30:55Molly O'Shea?

  It should be totally the opposite. But I do want to go through some of your portfolio companies. I think like, let's start with Redwood Materials. That's a really interesting story in the energy space, came from Tesla.

• 31:05Speaker 02

  Yeah.

• 31:06Molly O'Shea?

  How'd you guys get involved?

• 31:07Speaker 02

  Yeah, actually Joe, one of our partners worked with JB for a long time and on, on the board. And Greg, one of the other partners, ran operation and manufacturing for Tesla for the, the first eight years with JB. So we always had like a very close relationship with JB and the Redwood team. And, you know, they originally started on the recycling, that we had some question of like, how big is this market can be alone? But we always know that they're super talented. And then when they start talking about, maybe I will, I'll put, I'll put a mark. We should talk about like second act and third act in physical industry, because I think it's, it's interesting. But they were start talking with us about energy storage.

• 31:49Speaker 02

  And basically taking the batteries that they're recycled them and rebuild those batteries for very large energy storage for data centers. And that's also when CATL and the Chinese companies basically will start getting blocked from be able to sell energy storage to our grid, by the way, good idea.

• 32:08Speaker 02

  We just felt like the moment is right and we went out and led a very large round over there. Yeah, we love, love working with JB and the team. And, you know, recently we actually have another friends that joined the company. We brought Deepak as the CFO. He was the CFO of Tesla for many years. So kind of the band is back a little bit there and it's really exciting. Second act and third act.

• 32:34Speaker 02

  First act for Cerebras was to build a chip. Our second act actually was to build a system and our third act is to build a data centers that's running those things. For Redwood, the first act was to do the recycling. Second act was to take that and actually sell it as an energy storage. The SpaceX, first act, launch, second act, naturally Starlink. You, True Anomaly, first act, space defense awareness, second act, Golden Dome and other programs that are much more vertically integrated. So when you build something in the physical world, you actually, if you are successful, you will have the ability to introduce multiple of new businesses that will grow your wallet share in that sector.

• 33:16Molly O'Shea?

  Most of these come back to AI and data centers to your point before. So how do you, how do you think about, do you, do you care about customer differentiation? Like the moats and like the long-term durability like, or are you just focused on building them now and servicing those customers? Like, how do you think about that dependency?

• 33:34Speaker 02

  I mean, naturally, in the sectors that we operate, there is no like $10,000 ACVs. This is not, we signed last year many tens, I think roughly 40 or 50 billion dollar in commercial deals across the portfolio.

• 33:50Speaker 02

  So it's a very large deal. Some of them was double-digit billions. So of course you care about who is the customers because you're married to a very large whale partner. And he wants to make sure that the customers will do well. But you know, we talked a little bit about oxide. It takes something like oxide. So what oxide is building is an on-prem CPU-based rack that giving you a very software approach to an on-prem. So you feel like you operate in the cloud world from tools, but you're actually running that on an on-prem. And, and our view starting the company was not everything is going to move to the cloud. There's a lot of industries that will still wants to do an on-prem for security, latency, cost. We didn't know that AI will be a thing, to be clear.

• 34:34Speaker 02

  So getting lucky is important in this business. We're trying to get lucky as much as we can. But that business is just growing so fast. And it's not only one customers or two customers or three customers. They have multiple of customers doing, you know, double-digit millions of dollars. And they have one customers that are doing many hundreds of billions. But yeah, this is actually very typical for us to see in our portfolio. So you have a well account that will do many hundreds or billions of dollars of like a type of a size of a deal or TCV. And then you have multiple of other customers in the tens or hundreds of millions of dollars. And yeah, we're trying to move as fast as our customer moving.

• 35:14Molly O'Shea?

  Yeah, this is like on that point, it is interesting on-prem is coming back into fashion. After so many years of, you know, large legacy financial institutions and people like that fighting it, fighting, you know, cloud salespeople, really. Now their time is back to prove everyone wrong about on-prem. It's like AI sovereignty is, is like, it was in the AI Act, AI Action Plan. And then just reemerged when Karp was talking about that and token specifically for models and that kind of dependency. But for the most part, owning the stack and like having, especially in the US, like owning the manufacturing and the infrastructure,

• 35:57Molly O'Shea?

  everything that's being built to the models, like it's, it's obvious.

• 36:01Speaker 02

  Yeah, we actually helped write a little bit of the AI Act and kind of collaborate with the administration on that. And we call it the eclipse economy. If you're just looking on an AI infrastructure overall, we have companies from building chips to manufacturing racks, like the manufacturing, the automation to build those, those AI servers, to taking those servers and building racks and CPUs like oxides, to building the data centers and running it, like this new company we didn't announce yet I was referring to, to the energy sources of that data centers from nuclear to sodium ion, lithium ion and gas turbines.

• 36:44Speaker 02

  And soon in other energy storage at scale that we will announce. And on top of it, of course, the all applied AI and the physical AI that will take whatever that data centers and, and use it in manufacturing robotics and, and that eclipse economy is actually giving us something really, I believe, an interesting view because we in some way competing with China in their own way. We're not a country, we're a firm. So, but we are like, we, we do a one very large deals and we serve the deals with three, four portfolio. So essentially you have a one dollar that became four, five dollars because naturally you are leveraging multiple of your companies.

• 37:24Speaker 02

  And because we are so involved in those companies, we can shape how those very large deals is happening or how this policy is happening. And I actually really enjoy doing that.

• 37:36Speaker 02

  A, because it's helping us, helping companies like Cerebras grow much faster. But the other thing is also is giving us new ideas of what else we should build. Actually, that gas turbine is a great example of like, we saw that gas turbine lead time is insane, five years. Fully backlogged the whole companies and we're like, oh, we're actually deploying a lot of them. We should go build a modern company to do gas turbine. So I'm loving it.

• 38:03Molly O'Shea?

  Do you get pushback from maintaining and creating this own, your own economy off of it?

• 38:09Speaker 02

  Not yet. I mean, if, if we will, that mean we probably did something well.

• 38:14Molly O'Shea?

  Yeah, I would imagine.

• 38:15Speaker 02

  I think Elon is having his own little economy, right? Between what he's doing kind of SpaceX to XAI now together to Tesla and kind of leveraging the whole companies and all talent and all customer base. So I actually think it works well. And I'm sure, you know, he gets pushback, we'll get pushback.

• 38:32Molly O'Shea?

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• 39:17Molly O'Shea?

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• 40:02Molly O'Shea?

  Is there anything that we haven't covered yet that you're excited to talk about or?

• 40:06Speaker 02

  I probably the only other thing that will go back to, you know, my, I'm pretty optimist on, on, on America. And I think, yeah, one thing that people don't understand outside of Silicon Valley, when you build in the physical world, you actually have an impact on the rest of the country.

• 40:29Speaker 02

  I'm so sick and tired and think it's so stupid on the pushback on data centers, for example.

• 40:34Molly O'Shea?

  Yeah.

• 40:34Speaker 02

  When you build a data center in Nebraska, you create thousands of jobs. And it's a circular economy. It's like building a factory. Then you need an energy to serve that thing. Then you need construction. Then you need materials. Those people needs to leave. You need housing. You need service providers, restaurants. The whole flywheel of the economy is actually kicking in. That's actually what China did again, really, really well. And I think it's like the first time, maybe in the history, that we have an opportunity to do it at scale here in the US. And I'm just really excited about it.

• 41:09Molly O'Shea?

  That's amazing. Well, before we close out, I have two more questions. One of them is, you're an experienced banana farmer.

• 41:17Speaker 02

  That's, that's like probably my number one achievement in life.

• 41:22Molly O'Shea?

  What were the biggest lessons that you learned banana farming?

• 41:26Speaker 02

  Shit, it's hot in summer. And to carry those things in summer in that part of Israel, it's like not a fun job.

• 41:34Molly O'Shea?

  How many bananas can you carry at once?

• 41:36Speaker 02

  So actually what, there is a two people, one that is doing the cut and the second one that will basically grab the entire thing. I don't know what's the, the name of that in English.

• 41:47Speaker 02

  And you will do probably a good couple of hundreds of them a day.

• 41:51Molly O'Shea?

  Really?

• 41:51Speaker 02

  And this thing is weight 60 pounds.

• 41:56Speaker 02

  And as a young, sixteen years old rabble, the dropout from high school, it was a good discipline to walk there in summer for two years and just like walk on that banana farm. But that's also, it's also the first time I did welding.

• 42:12Molly O'Shea?

  Welding at the banana farm?

• 42:14Speaker 02

  Yes, because you need to weld those metal cranes that you will hang, those things that then you will take them to the packaging. And by the way, welding in summer in banana farm, it's really bad idea and hot. But it's also the first time I was like, hey, I need to build physical thing. This is like my thing.

• 42:36Molly O'Shea?

  The bananas don't melt in the sun?

• 42:37Speaker 02

  The bananas don't melt. And we cut them green. So you know, they are like more polished than the yellow that you're buying in trade. It'll actually take a couple of weeks still. They will show up for you to buy.

• 42:50Molly O'Shea?

  Were you thinking at all about, you know, you're well in your career, you got a large fund now, would you start a banana farm?

• 42:58Speaker 02

  Would you go back to, go back to the roots?

• 43:00Molly O'Shea?

  Yeah.

• 43:01Speaker 02

  I actually, I, no, I'm not thinking.

• 43:03Molly O'Shea?

  I think there's like banana problem.

• 43:04Speaker 02

  There is a banana problems. There is a banana problems. My funny things about that, I always say is like, if it would be very bad of building companies, worst case, my kids are going back to the banana farm. And actually, it was not that bad. So, you know.

• 43:18Molly O'Shea?

  Have you brought them?

• 43:19Speaker 02

  Oh, yeah, yeah. They'll go every summer.

• 43:20Molly O'Shea?

  Really?

• 43:21Speaker 02

  Yeah, yeah. They go every summer. My parents still live there. My sister still lives there in the kibbutz and they go. And it's like, hey, dad works in these banana farms. It's like that. It's like, go teach that. See how the tree growing and give them a lecture and they don't care.

• 43:33Molly O'Shea?

  So to push even further on how you support portfolio companies, what are the war stories in the lines there? How are you not just helping out with go to market?

• 43:42Speaker 02

  Yeah, I mean, we, we walk alongside the teams and you know, it's kind of like we manage a fairly small portfolio. So we can be super hands on and we can bring our operating expertise into the day by day. And I talk with most of our CEOs on a daily basis, multiple of times. And you know, you get a lot of kicks in the face in the type of companies that we build. A recent example of a company that we are building right now, they're involving data centers. I'm getting a phone call and I say, hey, we have a pool here rather than a data center. It's basically massive leakage of the water cooling of that data centers. I'm putting myself on a plane immediately. I'm flying to a place in the Midwest

• 44:25Speaker 02

  to just find the data centers that we have that absolutely looks like a pool. And you know, it was like a seventy-two hours of me pulling all of our network of service providers, new installation, new HVAC systems, figuring out things that I actually never did before. Like, you know, you need to dry concrete in a certain way in order to not have a moisture stain in that concrete that can impact the electronics. It's a thing. And yeah, that's what we do. And I was there seventy-two hours without my family, anything else, just on the floor till that thing got fixed. And you know, one thing for us is like, I always, because I get a lot of those emails from founders that we work with or management teams.

• 45:10Speaker 02

  Like, you were so instrumental. Thank you so much. That was heroic. And I'm like, guys, I don't need medals. This is, I do it because that's what I'm passionate about. And knowing how to build those companies, you just must be there with them in the field.

• 45:23Molly O'Shea?

  Are they surprised that you go and do this?

• 45:26Speaker 02

  Not anymore.

• 45:27Molly O'Shea?

  Not anymore?

• 45:28Speaker 02

  Not anymore. Not anymore. They're actually expecting me to do it now. Now there's an expectation. Leo, by the way, this thing, I'm like, well, it's not, that's not a big problem. You should be able to solve it by yourself. Yeah.

• 45:38Molly O'Shea?

  Our power is out. Please come back.

• 45:39Speaker 02

  Yeah, exactly.

• 45:40Molly O'Shea?

  You're like, what?

• 45:41Speaker 02

  We ran out of snacks in the kitchen. I'm like, okay, that's not really your things to fix.

• 45:45Molly O'Shea?

  How do you reboot the wifi?

• 45:46Speaker 02

  Yeah, exactly. Unplug it, unplug it. Yeah, exactly.

• 45:50Molly O'Shea?

  That's amazing. Wow. So as we close out, I have one final question. It's one of our partner questions. So Sorcery sponsored by Brex. They're the performance corporate card. Can you believe that? It's amazing.

• 46:04Speaker 02

  Yes.

• 46:05Molly O'Shea?

  Spending smarter, moving faster. Anyways, so I take this question on performance on the personal side of things. I asked Andrew this. He said Pierre and he said some other individuals. But I believe that, you know, you're really a subset of the people you surround yourself with, who you're inspired by, who you're mentored by, your friends, family, those kinds of things. And as you set out to build a very successful and, you know, ambitious career, you're obviously building over and over again. Who are those people for you?

• 46:33Speaker 02

  Yeah, and Pierre was a huge one for me, but since Andrew stole the thunder, I will not be able to use Pierre. That would be suck. But you know, is, I actually, I spent quite a lot of time with Sam at OpenAI in the last year or so. And I know that there is a lot, a bunch of point of view about him and about the company. I actually think he's really special. And I actually think he's also a really good guy with a good heart and a great builder. And I think a lot of the things that OpenAI did and others, and Entropic and other amazing companies

• 47:15Speaker 02

  are really important to our ability to build more companies and our ability to shape communities. And you know, to see my parents using ChatGPT is unbelievable. So definitely a source of inspiration for me.

• 47:31Molly O'Shea?

  That's amazing. I wasn't expecting that one.

• 47:33Speaker 02

  Yeah.

• 47:34Molly O'Shea?

  Maybe you were gonna say a robot or something. I don't know.

• 47:38Speaker 02

  One that we are building.

• 47:40Molly O'Shea?

  Well, Lior, thank you so much. It was such a pleasure. Love all the stories.

• 47:44Speaker 02

  Thanks for having me.

• 47:45Molly O'Shea?

  Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.