Why a Chemist Left $7B to Bet on Physical AI Before Everyone Else | Bilal Zuberi, Red Glass Ventures

<p>Bilal Zuberi spent 18 years investing hard tech, most of it as a GP at Lux ($7B AUM), before starting @RedGlassVC in 2025 to bet on AI that touches the physical world.</p><p><br></p><p>Bilal was making defense tech investments 15 years ago, and he led the Series A in Applied Intuition, now a $15 billion company.</p><p><br></p><p>We hung out for a few hours and he shared everything he&#39;s learned investing in hardware, why hardware is still hard, why the deployment layer is the most attractive area of physical AI, taking a 90% pay cut to start Red Glass, &quot;AUM as a moat&quot;, how to become a billionaire off management fees, and why consensus investing is mostly a circle jerk.</p><p><br></p><p>Thanks to this episode&#39;s sponsors:</p><p>Monaco: The revenue engine for startups https://monaco.com</p><p>Flex: Premium banking, 60-day credit, 0% APR https://home.flex.one/referral/bananacapital</p><p>Clerk: Everything you need for authentication https://clerk.com</p><p>Numeral: Sales tax on autopilot https://numeral.com</p><p><br></p><p>Timestamps:</p><p>(0:00) Leaving $7B to bet on physical AI</p><p>(0:51) What most people get wrong in physical AI</p><p>(4:17) Why a startup has to become a business</p><p>(11:31) Hardware is still hard, so what changed?</p><p>(15:40) How government went from SBIR mills to real customer</p><p>(17:48) Robotics goes from hard-coded to probabilistic</p><p>(23:34) Where value accrues: full stack, then wedges</p><p>(25:24) How Applied Intuition became a $15B company</p><p>(28:03) The deployment layer is the real prize</p><p>(32:22) OpenAI and Anthropic hint what will happen in physical AI</p><p>(36:14) Why customers have all the downside</p><p>(37:56) The best founders paint a picture and execute</p><p>(40:53) Why it&#39;s called Red Glass (founders chew glass)</p><p>(42:17) Every founder hates fundraising, even Travis</p><p>(44:29) Red Glass&#39;s four core values</p><p>(50:49) Why founders really take your call (the $250k effect)</p><p>(53:28) What Bilal looks for in a founder</p><p>(58:44) Why technical founders underrate fundraising</p><p>(1:00:26) The Tiger Global era</p><p>(1:04:02) From $10B to $100B, the goalposts moved</p><p>(1:06:21) Is this a bubble? Portfolio construction</p><p>(1:08:55) Building a firm that outlasts him</p><p>(1:12:13) From Nobel-lab chemist to Zero-to-One investor</p><p>(1:13:45) Are small funds just outsourced associates?</p><p>(1:16:35) When AUM becomes the moat</p><p>(1:18:34) How big funds c