VC experts on why Physical AI funding is heating up | E2333

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Today's show:

Are we one step closer to data centers in space? Katelin Holloway of Seven Seven Six and Paige Doherty of Behind Genius Ventures break it down what it would take.

Plus investor interest is surging in Physical AI companies. Paige explains why she backs applications of physical AI over general-purpose robotics, and how her thesis on multimodal AI led to the largest check she's ever written.

We then dive into the Pentagon's rollout of ChatGPT Mil and Grok for Government. And Katelin gives us her insight into how VCs are investing in Europe and the regulations behind the scenes.

Guests:

Katelin Holloway on X: https://x.com/katelin_cruse

Seven Seven Six: https://sevensevensix.com/

Paige Doherty on X: https://x.com/paigefinnn

Behind Genius Ventures: https://www.behindgeniusventures.com/

Full Transcript and Summary, powered by Plaud

https://web.plaud.ai/s/pub_772dbc9f-cd78-4de7-911e-8d3ee2883fbb::AF3ncHtIZkSyKKL-K-XUZBAUBEdoQQBEGCQSsja3gXsll8Dm6-Xbrrlhk7g8U-xwIW9kHyYwaB0dBuoC

Related Links:

Department of War adds ChatGPT Mil and Grok for Government: https://fortune.com/2026/09/01/pentagon-chatgpt-grok-government-military-ai-members-pete-hegseth-defense-department/

OpenAI for Government: https://openai.com/global-affairs/introducing-openai-for-government/

Starshield — SpaceX's government/defense arm: https://www.spacex.com/starshield/

UN work on LAWS (Lethal Autonomous Weapons Systems): https://disarmament.unoda.org/the-convention-on-certain-conventional-weapons/background-on-laws-in-the-ccw/

European Commission designates ChatGPT a VLOSE: https://digital-strategy.ec.europa.eu/en/news/commission-designates-chatgpt-reddit-roblox-under-digital-services-act

Commission press release: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1772

Euronews on why a chatbot that searches the live web counts as a search engine: https://www.euronews.com/next/2026/08/31/eu-places-chatgpt-reddit-and-roblox-under-strictest-digital-safety-rules

Entrepreneur First: https://www.joinef.com/posts/introducing-the-bridge/

Henrick Johansson, the European VC persona: https://x.com/compliantvc

Starcloud — orbital data centers: https://www.starcloud.com/

Starcloud raises $250M at a $2.3B: https://www.businesswire.com/news/home/20260821884035/en/Starcloud-Raises-$250-Million-at-$2.3-Billion-Valuation-to-Scale-AI-with-Orbital-Data-Centers

"From Sputnik to Starship: Estimating the experience curve of space launch technology" https://academic.oup.com/pnasnexus/article/5/7/pgag217/8732400

Cambridge Bennett Schoo: https://www.bennettschool.cam.ac.uk/blog/is-space-trade-the-next-global-transport-revolution/

Crunchbase News: physical AI startups raised $47.4B across 521 deals in H1 2026: https://news.crunchbase.com/venture/physical-ai-funding-startups-robotics-aerospace-h1-2026/

Crunchbase News on record defense-tech funding: https://news.crunchbase.com/defense-tech/startup-venture-funding-all-time-record-ai-anduril/

Jensen Huang's prediction: https://www.nvidia.com/en-us/executive-insights/

Zipline: https://www.flyzipline.com/

Nox Metals: https://www.noxmetals.com/

CNBC: Anthropic changes its data retention policy: https://www.cnbc.com/2026/09/01/anthropic-data-retention.html

Bloomberg on the plan to let enterprises hold the 30-day window: https://www.bloomberg.com/news/articles/2026-08-20/anthropic-plans-to-change-data-retention-policy-for-advanced-ai

Plaud — sponsor; the wearable AI note-taker → **https://plaud.ai/twist** (code TWIST for 10% off)

Harmonic: https://harmonic.ai/

Timestamps:

0:00 Why making it to Fund IV is when it gets real

9:24 Pentagon rolls out ChatGPT Mil and Grok for Government

10:49 Sentry - Your team should be focused on shipping features — not chasing down bugs. New users can get $240 in free credits when they go to https://sentry.io/twist and use the code TWIST

11:53 Paige on defense tech and three years at Northrop Grumman

13:40 Katelin: The bottleneck used to be winning the contract, now it's surviving one

16:13 Autonomous weapons, robot dogs, and the Boston Dynamics conversation in Paris

19:07 Lightfield - Name one person who's ever enjoyed updating a CRM. Exactly. Lightfield's AI agent does it for you — it even prospects and books your meetings. Used by thousands of startups. Free at https://lightfield.app

22:03 EU designates ChatGPT a "very large online search engine" under the DSA

24:54 Katelin's contrarian take: Europe is undercapitalized

29:56 Odoo - The all-in-one business platform. Your first app is free! Get started today at https://Odoo.com/twist

31:07 Starcloud raises $250M at a $2.3B valuation

53:06 Competing with Elon: the single point of failure for the whole space economy

57:49 Physical AI raised ~$47B in the first half of 2026

1:03:42 Jason's Zipline regret and the death of "hardware is hard"

1:07:07 Is "unc" a compliment? A Gen X / millennial / Gen Z / Gen Alpha

1:09:39 Anthropic reverses its data retention policy after enterprise pushback

1:12:18 Katelin on data custody: "That's not a procurement question"

1:15:31 Back to on-prem: Go.AI, the Go1, and vertical LLMs

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