Investing in the AI Infrastructure Boom

Artificial intelligence is in the middle of an arms race, and while everyone is focused on flashy consumer applications and foundation models, the real money might be in the picks and shovels—the companies building the AI infrastructure. A great example is Scale AI, a leader in data labeling and AI training. Investors looking for high-growth opportunities in AI should consider companies that operate in the backbone of the industry.

The Rise of AI Infrastructure Companies

While companies like OpenAI, Anthropic, and Google DeepMind battle for AI supremacy, they all rely on a robust ecosystem of infrastructure players to make their models work. From data labeling to model fine-tuning, API deployment, and computing power, the AI supply chain is becoming just as valuable as the AI models themselves.

As Andrej Karpathy, former director of AI at Tesla and researcher at OpenAI, put it:
“The most important factor in AI progress is not just compute or algorithms—it’s data. Companies that can provide high-quality, domain-specific data pipelines will have enormous leverage in this space.”

This shift in focus from pure model development to AI infrastructure is creating a new class of private companies that could become major players—or acquisition targets—over the next few years.

Key Private Companies Powering the AI Boom

If you’re looking for investment opportunities in private AI infrastructure, here are some of the most promising companies to watch:

1. Scale AI (Data Labeling & AI Training)
Scale AI is best known for providing high-quality, human-annotated data to train machine learning models. With clients like OpenAI, the U.S. Department of Defense, and leading autonomous vehicle companies, Scale AI is a key enabler of AI progress.

2. Hugging Face (AI Model Hosting & Collaboration)
Hugging Face has become the GitHub of AI, providing an open-source hub for AI models and tools. The company is building a dominant position in model hosting and fine-tuning, making it a critical part of the AI development workflow.

3. CoreWeave (Cloud Computing for AI)
CoreWeave started as an Ethereum mining operation but pivoted to providing high-performance cloud computing infrastructure for AI workloads. With demand for GPUs at an all-time high, CoreWeave is positioning itself as a key alternative to traditional cloud providers like AWS and Google Cloud.

4. Weights & Biases (AI Experiment Tracking & Model Training)
As AI models grow more complex, tracking and managing experiments is becoming increasingly critical. Weights & Biases provides MLOps tools that help developers monitor and optimize AI model training.

5. MosaicML (Acquired by Databricks) – Custom AI Model Training
Before its acquisition by Databricks for $1.3 billion, MosaicML was focused on making AI model training cheaper and more efficient. Its technology is now integrated into Databricks’ ecosystem, showing the growing demand for AI efficiency solutions.

6. Adept AI (AI Agents & Automation)
Adept AI is focused on building AI agents that can execute software tasks based on natural language commands. While this seems closer to the application layer, its success depends on foundational AI infrastructure.

Why Investors Should Pay Attention

The AI infrastructure boom is still in its early innings, but the opportunity is massive. As Daniel Gross, former YC partner and AI investor, noted:

“Right now, AI is like electricity in the early 1900s—everyone is figuring out how to generate it, but the real winners will be those who figure out how to distribute and apply it at scale.”

Major tech companies are already snapping up infrastructure startups. NVIDIA invested in CoreWeave, Databricks acquired MosaicML, and OpenAI collaborates closely with Scale AI.

For investors looking to get exposure to the AI gold rush without betting on which AI model will win, infrastructure companies offer a compelling alternative. While most of these players remain private, keeping an eye on secondary markets, pre-IPO rounds, or venture capital-backed funds specializing in AI infrastructure could provide early access to these game-changing companies.

Top Defense Tech Startups to Watch in 2025

The defense technology sector is experiencing a significant transformation, with startups challenging traditional industry giants and attracting substantial venture capital investment. In 2024, defense tech startups raised nearly $3 billion, signaling a surge in interest and potential for innovation in this space1. As we enter 2025, several private companies are making waves in the defense tech industry, revolutionizing everything from autonomous systems to data analytics.

Top Defense Tech Startups to Watch in 2025

Anduril Industries
Valued at $20 billion + per trades in the secondary market, Anduril is at the forefront of AI-enabled defense systems. The company specializes in autonomous weapon systems and is preparing to build a massive drone factory in Ohio, showcasing its rapid growth and ambition.

Shield AI
With a valuation of $2.8 billion, Shield AI focuses on developing autonomous drones and AI systems for complex military operations. Their innovative approach to AI in defense has attracted significant investor attention.

Saronic
This startup is making waves with its autonomous maritime vehicles designed for military operations and maritime security1. Saronic’s technology could revolutionize naval warfare and coastal defense strategies.

Skydio
As the largest drone manufacturer in the United States, Skydio has secured over half of its $1.2 billion in bookings from defense customers1. Their focus on expanding globally and improving drone connectivity positions them as a key player in the defense drone market.

Rebellion Defense
Developing AI software for military threat detection and decision-making, Rebellion Defense achieved unicorn status just a few years after its founding in 201918. Their recent selection to support US Navy Project Overmatch underscores their growing influence in the sector.

Firefly Aerospace
Valued at $2 billion, Firefly Aerospace is making significant strides in space technology for defense applications4. With their first moon landing mission for NASA and plans for dozens more this year, Firefly is rapidly expanding its presence in both commercial and defense space operations.

The Changing Landscape of Defense Technology
The rise of these startups marks a significant shift in the defense industry. Traditionally dominated by established contractors, the sector is now seeing an influx of innovative companies backed by venture capital. This transformation is driven by the need for rapid technological advancement to address evolving global threats and the Department of Defense’s increasing openness to working with startups.

The success of companies like SpaceX and Palantir has paved the way for this new wave of defense tech startups, proving that commercial ecosystems can deliver advanced technologies at unprecedented speeds6. As a result, venture capital firms are investing heavily in this space, with tens of billions poured into new defense technologies6.

As we move further into 2025, these startups are poised to play an increasingly crucial role in shaping the future of national security and defense strategies. Their ability to innovate quickly and adapt to changing threats makes them valuable assets in maintaining technological superiority in an ever-evolving global landscape.

Investing in Private Robotics Companies: The Next AI Revolution

The robotics industry is experiencing an exciting surge, with advancements that promise to reshape entire sectors—from manufacturing and logistics to healthcare and everyday consumer products. For savvy investors, private robotics companies represent a unique and high-potential opportunity to tap into this revolutionary wave of technological innovation. But as with any emerging industry, investing in private robotics comes with its set of challenges and considerations. Here’s why this space could be the next big thing, how investors can navigate it, and which private robotics companies are showing the most promise.

1. The Robotics Boom: Why Now?

Robotics is no longer a futuristic concept; it’s a rapidly expanding field that is already changing how industries operate. The global robotics market is expected to grow exponentially in the coming years, driven by factors such as:

  • Automation Demand: Businesses are increasingly turning to automation to enhance productivity, reduce costs, and maintain competitive advantage. From factory floors to warehouses, robotics is becoming integral to operational efficiency.
  • Advancements in AI and Machine Learning: Robots are becoming smarter. With the integration of AI and machine learning, robots can now make decisions, learn from their environment, and interact with humans in ways that were previously unimaginable.
  • Healthcare Innovation: Robotics is making significant strides in healthcare, from robotic-assisted surgeries to assistive robots for elderly care. The need for precision and care in these fields opens new avenues for investment.
  • Consumer Robotics: Beyond industrial applications, robotics is beginning to enter the consumer market, with innovations such as robotic vacuum cleaners and even personal assistants.
  • As Rob High, CTO of IBM, aptly puts it, “The next wave of innovation will be driven by the fusion of AI and robotics. The future will be a world in which robots are collaborative partners, not just tools.” High’s words reflect the increasing sophistication and adaptability of robotic systems, making the sector an attractive investment opportunity for those looking to back transformative technologies.

2. Why Private Companies?

While public robotics companies may seem like the obvious choice, private companies often offer the most attractive investment opportunities for several reasons:
Early-Stage Growth Potential: Many private robotics companies are still in their early stages, which means they have significant room to scale. This creates a unique opportunity for investors to get in on the ground floor before the companies experience their big break.
Niche Innovation: Private companies tend to focus on specific niches within the robotics space—whether it’s healthcare, logistics, or consumer goods. Investing in these companies allows you to back innovations that are deeply focused on solving particular problems.
Lower Competition: With fewer investors and larger firms involved, private robotics companies often offer a less crowded market compared to their public counterparts. This can give early investors an edge in securing favorable terms and equity stakes.
Brian Keng, partner at venture capital firm Redpoint Ventures, emphasizes this point: “The next great robotics company will likely come from a small, scrappy startup, not a massive corporation. For investors willing to take on more risk, the rewards of being early to the table can be monumental.”

3. Promising Private Robotics Companies to Watch

While there are many robotics startups across various sectors, here are some of the most promising private companies making waves in the robotics space:

Physical Intelligence: The company’s mission is to empower robots with human-like understanding and dexterity by training them on extensive sensor and motion data. This approach aims to enable robots to perform a wide range of tasks with adaptability and efficiency.

Figure AI: The goal of Figure AI is to “develop next generation AI models for humanoid robots,” according to Figure. The near-term application for Large Language Models will be the ability to create more natural methods of communication between robot and their human colleagues. “The collaboration aims to help accelerate Figure’s commercial timeline by enhancing the capabilities of humanoid robots to process and reason from language,” the company notes. The Bay Area-based robotics firm announced a $675 million Series B round that values the startup at $2.6 billion post-money. The impressive lineup of investors includes Microsoft, OpenAI Startup Fund, Nvidia, Amazon Industrial Innovation Fund, Jeff Bezos (through Bezos Expeditions), Parkway Venture Capital, Intel Capital, Align Ventures and ARK Invest

Skild AI: The company’s AI model can be applied to various types of robots and the generalized model can be modified for a specific domain and use case. According to the Financial Times, the company is close to receiving a $500mln investment from Softbank at a $4bln valuation.

RightHand Robotics: This company focuses on warehouse automation and material handling using robotic systems that integrate vision and AI. By helping e-commerce and logistics companies streamline operations, RightHand Robotics is well-positioned for growth as the demand for automated solutions in warehouses increases.

Adept Robotics: Adept Robotics specializes in the development of intelligent robots for the service industry. Their robots are designed to assist with tasks like customer service, delivery, and interaction in retail settings. As automation continues to penetrate more consumer-facing industries, Adept Robotics is set to capitalize on this trend.

ReWalk Robotics: Focused on medical robotics, ReWalk creates wearable exoskeletons to help individuals with spinal cord injuries regain mobility. The company represents a compelling opportunity in the healthcare robotics market, where demand for assistive technologies is growing.

Rethink Robotics: Although acquired by Hahn Group in 2018, Rethink Robotics remains a significant player in collaborative robots (cobots). Their Baxter and Sawyer robots are designed to work alongside humans in industrial environments, making automation safer and more efficient. As more industries adopt cobots, Rethink Robotics stands out as a key player in this growing market.

4. Key Considerations for Investors

Investing in private robotics companies is not without its risks, but with the right approach, it can offer substantial returns. Here are some factors to keep in mind:

Technology Risk: Robotics is a rapidly evolving field, and there’s always a chance that a technology or company may fail to deliver on its promises. It’s crucial to conduct thorough due diligence and understand the technological landscape before investing.
Regulatory Landscape: Robotics, especially in areas like healthcare or autonomous vehicles, is heavily regulated. Investors should stay informed about local and international regulations that could affect the adoption and deployment of robotics technologies.
Team and Vision: The strength of a robotics company’s leadership is one of the most important factors. The best founders are not only visionary but also capable of navigating the complex technical and market challenges that come with developing robotics solutions.
Exit Strategy: While private robotics companies can offer significant growth potential, finding an exit strategy is essential. Whether through an acquisition, merger, or IPO, understanding how you might eventually cash out is vital.

5. Looking Ahead: The Future of Robotics Investment

The robotics industry is set for a transformative future, with potential breakthroughs that could affect virtually every facet of modern life. For investors, this represents an exciting opportunity to back the next generation of innovation. However, the key to success lies in identifying the right companies, understanding the risks, and staying agile in an ever-evolving technological landscape.
As robotics pioneer Rodney Brooks, co-founder of iRobot, notes, “Robotics is poised to change the world, but it will happen incrementally, one step at a time. Investors who are patient and forward-thinking will reap the rewards of being early supporters in this journey.”
In conclusion, while investing in private robotics companies requires a keen eye for potential and a willingness to embrace risk, the payoff for those who enter this space with diligence and strategic foresight could be substantial. The robotics revolution is just getting started.