The Next Industrial Revolution Will Be Intelligent
Why Industrial AI & Robotics Is PaperJet’s Flagship Investment Focus
Why Now: The Next Frontier Is Here
The next industrial revolution won’t just be about automation—it will be about intelligence.
After years of backing visionary deep tech founders, I’ve seen one thing hold back even the best ideas: the lack of infrastructure to scale.
The most common question I get from seasoned investors is simple:
“Can these founders actually build at scale?”
We’ve never lacked technical talent in the U.S. What’s missing is the pathway to take deep tech beyond the prototype stage—a commercialization gap that’s kept many breakthroughs from ever reaching the market.
That gap matters more than ever.
National priorities, supply chain shocks, climate innovation, and a push for re-industrialization have made it urgent to rebuild smarter, more resilient industrial capacity here at home.
The good news?
AI and robotics are already converging with advanced manufacturing, enabling software-defined, adaptive factories that don’t just automate—they think. This shift is here now, not in some distant future.
With tariffs and supply chain disruptions dominating headlines, the momentum to rebuild our industrial base has never been stronger, making Industrial AI not just timely, but strategically essential.
What’s Missing: Why Startups Struggle to Scale
We all use AI tools like ChatGPT and Perplexity every day. But what’s next?
AI that meets the physical world.
AI is moving beyond software. It’s transforming power grids, vehicles, factories, and entire supply chains—creating multi-trillion-dollar market opportunities.
One of the best examples is Anduril’s Arsenal OS—an AI-native factory system where software runs the entire production stack, from design to deployment. Think of it like upgrading from static assembly lines to self-driving factories. Factories that optimize themselves, just like your phone updates overnight.
This is the leapfrog moment—one that positions the U.S. and its allies to compete globally in manufacturing, robotics, and industrial AI.
We’re already seeing early signals:
Humanoid robots like Tesla’s Optimus and Figure are showing real-world demos.
Morgan Stanley forecasts a $5 trillion market by 2050, with nearly a billion robots moving from industrial to everyday life.
Massive tailwinds are driven by labor shortages, energy demands, and automation.
But the hard truth remains:
Most early-stage deep tech founders get stuck. They have great demos but struggle to cross the chasm to scalable manufacturing. After decades of offshoring, America’s industrial muscle is weak. Startups get trapped in fundraising loops instead of building real customer traction.
Historically, VCs have avoided deep tech for exactly this reason—hardware was seen as too capital-intensive, too slow to scale, and too risky compared to software.
But the landscape is shifting. AI-native manufacturing platforms, like Arsenal OS, show that the economics are changing. What once looked impossible to scale now looks inevitable to win. And the window to lead is wide open.
Industrial AI Isn’t About Replacing People—It’s About Empowering Them
Industrial AI isn’t about eliminating jobs. It’s about creating new, good-paying opportunities here in the U.S.—from systems engineering and advanced manufacturing to AI operations and industrial design.
As intelligent machines take on the repetitive and dangerous work, people can focus on higher-value roles that drive innovation, safety, and efficiency across the industrial economy.
While there’s renewed momentum to bring manufacturing back onshore, we believe the bigger opportunity is to rethink what manufacturing excellence looks like in the AI era—building modular, AI-first manufacturing systems from scratch, designed to scale intelligently, not incrementally.
How We Solve It: PaperJet’s Model to Bridge the Gap
At PaperJet, our mission is to close the commercialization gap first, helping founders build real companies, not just pitch decks.
We’ve built what we call the PaperJet Commercialization Engine—a hands-on system that guides founders from lab demo to industrial scale.
How It Works:
University Labs - We mentor PhD teams at MIT, Stanford, and Berkeley to shape commercialization pathways early.
Early-Stage Founders - We invest and embed operational support, helping founders de-risk their go-to-market and pilot programs.
Industrial Partners - We broker real-world pilots, customer deals, and manufacturing scale-up pathways with industry leaders and corporate VCs.
Scaling these platforms takes more than just venture equity.
It requires a layered capital strategy—combining venture capital, flexible debt, non-dilutive government funding, strategic partnerships, and later-stage private equity. Our network is built to help founders navigate these capital stacks.
Why Industrial AI Is Personal to Us
We first sharpened this model in electrification and space, backing Tesla and SpaceX when they were still contrarian bets. Those lessons shaped how we invest today—read more about that journey here.
H3X – Electric motors for aviation
Auriga Space – Reusable, electromagnetic launch platforms
We applied the same playbook to robotics:
Polymath Robotics – Plug-and-play autonomy for tractors and mining trucks
UCR – Humanoids for hazardous industrial work
And we’ve extended it to university spinouts—helping PhD teams in semiconductors, aerospace, and AI build companies like:
Hexaspec – Advanced chip cooling for AI data centers
Stealth Cornell startup – Autonomous drone simulation
But we don’t stop with capital alone.
We connect founders with customers, co-investors, operators, and government partners to build the next generation of industrial platforms.
Why This Is a Global Opportunity
But Industrial AI isn’t a U.S.-only play. It’s a global team sport.
From Japan’s robotics leadership, to Korea’s manufacturing depth, to Taiwan’s semiconductor dominance, we’re building cross-border partnerships to unlock scale.
We’ve seen this model work:
Tesla + Panasonic building Gigafactory Reno
TSMC + Amkor creating Arizona’s semiconductor hub
We actively build bridges with global partners to help founders scale faster, smarter, and more defensibly.
Why I’m All In
This is a once-in-a-generation opening.
AI is moving off the screen and into the real world—powering factories, energy systems, and infrastructure. The upside is measured in trillions.
But ideas alone won’t get us there.
Founders need infrastructure, capital, and hands-on partners to close the commercialization gap. That’s why PaperJet exists.
We’re all-in on Industrial AI because we believe the next iconic companies will be built at the intersection of intelligence and industry.
Let’s build the future of industry—together.
And like the best live music, the magic happens before the rest of the world catches on.
Read more about why the thrill of early discovery drives everything we do at PaperJet.
Best,
Chris Kong
Founder & GP, PaperJet Ventures
P.S. A heartfelt thank-you to my friend Jen Liao and Jaireh Tecarro for their invaluable feedback, thoughtful tips, and unwavering support in shaping this piece.