Episode summary
Leo Polovets on the End of Software, the AI Infrastructure Boom, and Humanoid Robots
How I Invest With David Weisburd
· · 1 hr 2 min · Hosts: David Weisburd · Guests: Leo Polovets
Summary
Leo Polovets argues that AI is making software abundant, which shifts venture opportunity toward physical industries where incumbents are still slow, fragmented, and under-automated. He sees hardware, energy, manufacturing, robotics, mining, and defense as areas where a small team can still create a dominant new entrant, especially when the product solves a real bottleneck for customers who care more about speed than theoretical efficiency.
He says the best investors and founders need a lane that is uniquely their own, and that quantity of meetings improves judgment because more reps help calibrate what exceptional looks like. For deep tech, that calibration matters even more because revenue ramps are very different: many companies spend years in R&D, then can move from pilot validation to large contract revenue very quickly. He also argues that capital intensity is often overstated; deep tech may require more upfront funding, but not necessarily more capital relative to eventual exit size.
Polovets is bullish on AI infrastructure, especially data centers, energy generation, geothermal, semiconductor specialization, and tools that speed design and maintenance. He is more cautious on humanoids as an investment category because the space is already crowded and heavily funded, though he still thinks humanoids could become a trillion-dollar market over time. Across all of it, he emphasizes founder-market fit, technical fluency, bias for action, and the ability to manage long, interdependent timelines.
Key takeaways
- Leo Polovets thinks AI is commoditizing software and pushing venture value toward hardware, energy, and other physical bottlenecks.
- Leo says the best investors win by playing in a uniquely defensible lane and by taking more meetings to improve calibration.
- Leo argues deep tech revenue is delayed for years, but contract sizes can then jump into the millions or tens of millions.
- Leo says hardware is not necessarily more capital intensive relative to exit size, even if it needs more upfront financing.
- Leo is bullish on data center energy, geothermal, and semiconductor specialization, but he is cautious on investing directly in humanoids because the category is already crowded.
Notable quotes
“I think it just means more value will move to other areas. And hardware is like to me the next natural one”
“The thing I've really grown to appreciate, especially over the last few years, is just how important it is to basically play in your own lane”
“I think the capital intensity is pretty similar”
How the episode opens
Building software is becoming more and more commoditized. More people can do it. You can do a lot more with fewer people.
You can do it very quickly. Software was pretty scarce before, but now with AI, it feels abundant. I think it just means more value will move to other areas.
And hardware is like to me the next natural one. There's opportunity for a lot of companies to basically like build the only new entrant in a big space and then dominate the space versus in software where I think the competition is just like a lot more cutthroat and crowded. It seems like capital suddenly combusted out of thin air to launch and fund these very large capital intensive projects.
How would you explain that?
All the like ex Palunteer, SpaceX, Tesla alumni are starting new companies. There's just like a lot of amazing teams and a lot of science you can build these like hundred billion or even trillion dollar companies. I think those investors are really excited.
Leo, you co-founded SUSA Ventures 13 years ago and today you run the sister fund Humba. Tell me about what you've changed your mind on as an investor recently.
The thing I've really grown to appreciate, especially over the last few years, is just how important it is to basically play in your own lane and and like to have a lane that's kind of uniquely yours. I think it's true both on the company side and investor side. at SUSA and at Humbu have always appreciated things like moes and defensibility.
But what what I realized is like even if you have a good moat, if you're in a space that's very crowded, there's a lot of competition. Even if you have the best product or the best fund uh strategy, it's just very hard to stand out.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai infrastructure boom
- venture capital hardware investing
- deep tech underwriting
- humanoid robotics
- valuation and investing lessons
Companies and tickers mentioned
- HOOD
- Humba Ventures
- Susa Ventures
- Robinhood
- Flexport
- Stord
- Juniper Square
- AlphaSense
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
