Why Did Venture Investors Start Preferring Deep Tech?

Jeff Morris Jr says investors started preferring deep tech because AI software bets from 2022 to 2025 went badly, not because hardware suddenly got easier.

Turner Novak describes the shift from the other side of the table: three years earlier, deep-tech hardware was an instant pass no matter the founder or the market, and some investors now want a physical product instead of software. Jeff's account is that someone who backed ten vertical AI companies watched nine of them get destroyed by Claude or OpenAI. Hard tech and deep tech did not get easier. They are the place where the big labs seem less likely to arrive and break the company two months after the seed investment.

He also ties the change to American Dynamism. Two or three years ago that theme was new and not what people wanted to fund. In the tech community it is now accepted, and a lot of investors want the label. The test he comes back to is still how fast customers adopt the product and how efficiently it can be delivered, in software or in hardware.