Nicolas Sauvage recently presented his perspective on technology investments at the StrictlyVC event in San Francisco. He asserts that the most promising investment opportunities typically become evident after four years. This philosophy stems from his experience since 2019, when he established TDK Ventures, the corporate venture arm of the Japanese electronics company TDK, currently overseeing $500 million across four funds. A prime example of this approach is Groq, an AI chip startup valued at $6.9 billion during its last funding round.
Sauvage’s investment in Groq in 2020 predates the generative AI surge. At that time, Groq was concentrating on inference, which entails the substantial computational responsibilities of responding to user queries. Chaos ensued in AI applications this year, emphasising the burgeoning demand for inference capabilities—something Sauvage anticipated due to his understanding of market dynamics.
The partnership between TDK Ventures and Groq might seem unusual, considering TDK’s historical focus on magnetic tape technology. Yet, Sauvage’s determination led him to advocate for the establishment of this venture fund, tasked with exploring the next major advancements for TDK and identifying potential threats.
Today, TDK Ventures’ portfolio highlights emerging technologies that have gained traction among investors in recent times. This includes innovative solutions like solid-state grid transformers and alternative battery technologies that avoid the geopolitical risks associated with lithium and cobalt. The overarching strategy involves identifying future bottlenecks and connecting with the innovators already addressing them.
Looking ahead, Sauvage is particularly intrigued by ‘physical AI,’ emphasising robots designed for specific tasks in logistics and hazardous environments, such as Agility Robotics and ANYbotics. These robots excel at performing singularly difficult tasks, showcasing purpose-driven design.
Additionally, Sauvage observes a shift in computing technology; while GPUs have historically dominated AI model training, chips developed for inference—like Groq’s—are revolutionising operational efficiency. Furthermore, he suggests that CPUs may see a resurgence as they are better suited for the complex, decision-making processes in AI orchestration.
Moreover, Sauvage is closely monitoring developments in China, where a burgeoning trend referred to as “vibe manufacturing” is innovatively streamlining hardware prototyping processes, outpacing Western methodologies. This evolution signals potential bottlenecks in the current supply chain and represents a challenge that he is already addressing through TDK Ventures.
Despite advancements, Sauvage notes a critical gap remains in achieving dexterity in physical AI. He anticipates that resolving the challenges around physical fluency in robotics will provide a significant competitive edge to those who can iterate physical products rapidly, akin to software development. His strategic positioning for TDK Ventures is centred on riding this forthcoming wave of innovation.
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