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

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.

Bilal was making defense tech investments 15 years ago, and he led the Series A in Applied Intuition, now a $15 billion company.

We hung out for a few hours and he shared everything he'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, "AUM as a moat", how to become a billionaire off management fees, and why consensus investing is mostly a circle jerk.

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Timestamps:
(0:00) Leaving $7B to bet on physical AI
(0:51) What most people get wrong in physical AI
(4:17) Why a startup has to become a business
(11:31) Hardware is still hard, so what changed?
(15:40) How government went from SBIR mills to real customer
(17:48) Robotics goes from hard-coded to probabilistic
(23:34) Where value accrues: full stack, then wedges
(25:24) How Applied Intuition became a $15B company
(28:03) The deployment layer is the real prize
(32:22) OpenAI and Anthropic hint what will happen in physical AI
(36:14) Why customers have all the downside
(37:56) The best founders paint a picture and execute
(40:53) Why it's called Red Glass (founders chew glass)
(42:17) Every founder hates fundraising, even Travis
(44:29) Red Glass's four core values
(50:49) Why founders really take your call (the $250k effect)
(53:28) What Bilal looks for in a founder
(58:44) Why technical founders underrate fundraising
(1:00:26) The Tiger Global era
(1:04:02) From $10B to $100B, the goalposts moved
(1:06:21) Is this a bubble? Portfolio construction
(1:08:55) Building a firm that outlasts him
(1:12:13) From Nobel-lab chemist to Zero-to-One investor
(1:13:45) Are small funds just outsourced associates?
(1:16:35) When AUM becomes the moat
(1:18:34) How big funds choke off SPV money
(1:21:24) The risk of VCs backing competitors
(1:23:31) Why fund economics push everyone bigger
(1:26:20) Consensus investing is a circle jerk
(1:29:51) You can be a billionaire on fees alone
(1:33:09) Equal carry and the right to win
(1:35:55) Why good ethics in VC matter

Check out Red Glass VC: redglass.vc

Follow Bilal
Twitter: x.com/bznotes
LinkedIn: linkedin.com/in/bzuberi

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LinkedIn: linkedin.com/in/turnernovak

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