TL/DR
- The PNW was once known as the Silicon Forest, praised for our advancement and leadership in hard-tech, semiconductors, aerospace and metrology... something we have lost significant ground over to The Bay, NYC, Boston over the years.
- Seattle ranked only fifth among U.S. cities for total VC funding
- Seattle barley cracked the 10 metro areas for venture investment in Physical Startups over the last 2 years
- The PNW has ZERO dedicated hard-tech VC funds, and home to one of only a few of the US's hard-tech venture studios.
Reseeding the Silicon Forest
The Pacific Northwest has a rich legacy of engineering, innovation, and real-world technology leadership. From aerospace to measurement instrumentation, from medical devices to consumer electronics, this region built the industries that shaped the 20th century.
Today, artificial intelligence is transforming the global economy—and its greatest impact will be in physical industries, not just digital software. The next 20 years will be defined by how well we integrate AI into manufacturing, healthcare, energy, logistics, transportation, agriculture, and defense.
This perspective paper, lays out why we believe the Pacific Northwest is uniquely positioned to lead this new era of AI-powered hard-tech (Physical AI), but also why it’s currently at risk of missing out.
A Legacy Built on Real-World Innovation
The Pacific Northwest was built by people who solved real-world problems through hardware and systems-level innovation. — That mindset is needed again today, or we are set to lose ground in the “AI software squeeze” as a VC and Startup Market.
- Boeing turned Seattle into an aerospace capital.
- Intel and HP initiated a semiconductor and consumer electronic skills boom that translated today into the teams at XBOX, Oculus, and Amazon.
- Tektronix launched the Silicon Forest, developing the world’s most advanced electronic measurement tools.
- Fluke Corporation created test instrumentation used by engineers across every industry.
- Microsoft Hardware evolved from peripherals to products like Xbox, Kinect, HoloLens, and now semiconductors and quantum.
- ATL, Physio-Control, SpaceLabs pioneered portable medical devices and diagnostics.
- (countless more...)
AI’s Next Frontier: Physical Industries
The AI revolution is just beginning. The first and current wave is focused on how AI is ripping through our digital economy. The next wave—by far the larger—is AI’s impact on the physical world.
National data confirms that the “AI + hardware” segment is booming – in 2024, robotics startups alone attracted $4.2 billion+ in funding through mid-year, a pace above the previous year . Major deals at the “intersection of AI and robotics” are happening, such as $100M+ rounds for humanoid robot companies backed by coastal investors (even Seattle’s own Amazon and Microsoft poured money into a California humanoid robot startup) . Yet, few of those big checks are landing in PNW startups. There is a clear regional gap: the PNW has technical ingredients to lead in these hard-tech fields, but much of the venture leadership and capital is concentrated elsewhere.
AI will automate, optimize, and transform sectors like:
- Manufacturing & robotics
- Healthcare & diagnostics
- Energy & infrastructure
- Agriculture & food systems
- Transportation & aerospace
- Defense & national security
70%+ of global GDP is tied to physical industries and its here where the impact of AI will drive outsized disruption, efficiency and innovation for the next century
- Edge AI Market: Projected to reach $356.84B by 2035
- IoT in Healthcare: Expected to grow to $1T by 2035
- IoT Sensors Market: Forecasted to hit $314.87B by 2035
- AI in Computer Vision: Estimated at $473.98B by 2035
- Wearable AI Market: Projected to reach $984.30B by 2035
- Humanoid Robotics Market: Forecasted to grow to $38B by 2035
The Pacific Northwest Is Ready for Reseeding ....But Held Back By Major Gaps in Hard-Tech Funding for the PNW
Despite its strong talent and legacy, the Pacific Northwest faces a venture capital gap in hard-tech and AI-physical startups compared to other regions.
- Seattle ranked only fifth among U.S. cities for total VC funding
- Seattle barley cracked the 10 metro areas for venture investment in Physical Startups over the last 2 years
- The PNW has ZERO dedicated hard-tech VC funds (Conduit aims to rectify this asap 🤔)
- 🙏🏽 Leaders like Fraiser Partners, FUSE and Voyager Capital are leaning in investing early and supporting PNW deep/hard-tech in the recent years (thank you!)
Leading US early-stage Hard-Tech VCs are not in the PNW
With hard-tech / physical AI investments rising, founders are having to move / source capital outside of their region. Note: None of the hard-tech funds below (minus Sway) hold office or have GPs in the PNW.
Despite the current funding gap (something we can rectify easily), the Pacific Northwest still has all the right ingredients to be a hard-tech powerhouse.
A Deep Talent Pool in AI & Hardware – Seattle ranks among the top regions in AI research talent.
The Pacific Northwest hosts 23% of all AI engineers in the U.S. – a talent pool uniquely capable of marrying AI algorithms with physical devices.
- The University of Washington, home to one of the world’s leading computer science departments, produces top-tier machine learning, robotics, and bioengineering graduates. The University of Washington’s robotics and computer science labs, for instance, trained pioneers like Yoky Matsuoka, who built neuro-robotics innovations at UW before co-founding Google’s Nest. Another example is Shwetak Patel at UW, whose lab’s sensor inventions (in smart home and health devices) won global accolades.
- Microsoft, Google, Facebook and Amazon employ thousands of engineers specializing in AI, cloud infrastructure, and edge computing—expertise that directly translates to hard-tech applications.
Strategic Industry Clusters — The Pacific Northwest is already home to key sectors that could benefit from AI-driven hardware solutions:
- Aerospace & Defense: Boeing, Blue Origin, and a growing network of space-tech startups provide a foundation for AI-powered automation in aviation and space.
- Healthcare & Biotech: The region has a strong life sciences presence, with medical device innovation ripe for disruption through AI and robotics.
- Climate & Sustainable Manufacturing: The Pacific Northwest is a leader in renewable energy and sustainability initiatives. AI-driven manufacturing, energy storage, and carbon capture solutions could thrive here.
- Agriculture and Energy: The Pacific Northwest is home to the nations largest speciality crop market including top agri-tech programs at WSU and OSU.
The Current Landscape of AI-Powered Hard-Tech Startups
Today, a new wave of Pacific Northwest startups is fusing advanced AI with sensory-rich hardware to solve real-world problems. Many of these companies leverage the region’s expertise in areas like robotics, agriculture, and healthcare, applying edge AI (on-device intelligence) to make their products smarter and more autonomous. Some notable examples include:
Robotics, AgTech, Spatial Intellgence & Defense
- Aigen: Solar-powered autonomous farming robots
- Carbon Robotics: AI-powered laser weeding
- Overland AI: Autonomous off-road mobility for defense
- BRINC Drones: Tactical drones for emergency response
- Augmodo - wearable spatial intelligence in retail
Medical Devices & Health Tech
- Proprio: CV+AI-powered surgical navigation
- Monod Bio: DNA-based biosensing (UW spinout)
Space & Aerospace
- Blue Origin: Reusable rockets and space infrastructure
- Amazon Kuiper: Global broadband via satellite constellation
- Starlink (SpaceX): Satellite production in the Seattle area
- Stoke Space, LeoStella, Radiant: Next-gen launch and satellite startups
Industrial Tech, Energy & Instrumentation
- Fortive (Fluke, Tektronix): Measurement and diagnostics powering industrial AI
- Glowforge: Desktop laser cutting systems
- Echodyne: AI-enhanced radar for autonomy and security
- WiBotic: Wireless charging systems for autonomous platforms
- Helion Energy: Fusion power backed by AI-driven systems engineering
Software for Physical AI
- Wilderness Labs - defense-grade security that runs full .NET applications on embeddable microcontrollers.
- Groundlight - computer vision training and deployment platform
🌳 In 2025 Conduit will lead the reseeding effort!
Play
We fundamentally believe now is the time to reimagine how the next wave of hard-tech / physical AI companies are going to be incubated, grown and scaled. Conduit is focused on investing and building an “early-stage VC platform” that will advance and accelerate our leading technologists / entrepreneurial leaders where they need the most support to bring impact to the market faster and with the outsized advantages needed to succeed.
- Scout - working early and often with academic and corporate labs to identify, map and create new companies together with founders as new technologies emerge from the lab.
- Build - co-creating and originating new companies through our venture studio to de-risk, translate and act as a “hard-tech co-founder” to emerging and repeat founders.
- Invest - de-risking and investing in Pre-Seed through Series A stage companies through the lens of a team who has “been where they are before” and have the resources and support needed to help them execute and scale.
- Scale - leveraging Conduit’s network for hard-tech mentors, executives, suppliers, and factories to help startups navigate the complexities of hard-tech execution and growth.
- Access & Expertise - we have and will continue to build the largest expert and partners network of hardware and software executives, operators, investors, manufactures, suppliers etc… all with the singular focus to de-risk and pass on the “learnings” from one generation of hard-tech builders to the next.
- We leverage decades of hard-tech founder and operational expertise, along side our network of experts to invest first and early, from "seed and lead", through Conduit Ventures (TBA)
- We lean in and leverage our network, strategic partnerships and operational expertise to be a VC that leads by example and not only invests, but also co-creates venture scale companies through Conduit Venture Labs, the only full-suite hard-tech venture studio.
- We afford all hard-tech companies access to our network of over 200 hard-tech founders, operators, executives, suppliers and manufacturers to de-risk the executional complexities that come with growing and scaling a hard-tech company... we do this through Conduit Beacon our "Hard-Tech Scalar" program.
Conclusion: The Time Is Now to Start the ReSeeding of the Silicon Forest
The AI revolution is transforming every sector of the global economy—but it is not just about software. AI’s most profound impact will be in the physical industries that power the real world. Robotics, automation, healthcare, energy, and aerospace are all poised for transformation.
The Pacific Northwest has the talent, the legacy, and the industry backbone to be a leader in this revolution. But without decisive action—without a concerted effort to reseed the Silicon Forest—the region risks missing out on the next wave of technological innovation.
This is a call to action: to investors, founders, universities, and corporate leaders. The time to rebuild the Pacific Northwest’s hard-tech prowess is now and Conduit is here to collaborate and lead the effort. @
🚀 Let's Build (together)
Amish Patel / Founder / Managing Director - Conduit Ventures / Venture Labs
#ReseedingTheSiliconForest
