Bullish on Automation and Robotics, but not Humanoid Robots | Shahin Farshchi

**David Hoffman** (0:03)
Hey, Bankless Nation, in this episode, I talked to Shahin Farshchi. He is a general partner at Lux Capital, which is a hard tech venture firm.
They invest in frontier technologies, AI, automation, biotech, robotics, just to name a few. Not in crypto. This is not a crypto episode. I wanted to go learn a little bit more about robotics. And Shahin is a veteran of automation and robotics. Automation is a very important word. There's a lot of hype and excitement about humanoid robotics. The Tesla Optimus Prime, the figure robot, and Andrew Kang really came into the crypto industry really talking about robotics and humanoid robotics.
And I want to learn about that. I want to learn about robotics and the investing space around there. Shahin has been investing in robotics for a decade plus. And so he's seen a thing or two, and he's been around a few hype cycles in robotics. And so he's just probably the foremost expert on this industry. And so I'm pretty honored to be able to host him on this conversation and just learn about a sector outside of crypto that's in frontier technology that I think is going to be very, very impactful from somebody who just knows all the ins or outs. And so with that preamble out of the way, Shahin, welcome to Bankless.

**Shahin Farshchi** (1:22)
Thank you for having me, David.

**David Hoffman** (1:23)
Shahin, there has been a ton of hype around robotics.
And I think a lot of people are learning about the robotics sector for the very first time. And so this is why I reached out to you and Lux, because I want to get a veteran on the show to ask a veteran what they think about the robotics industry. There's just been a crescendoing of hype. And while hype is exciting and it's fun and it's an opportunity to learn, it can also be dangerous. And so I think the first question I want to throw at you is, is the hype around robotics justified? What do you think?

**Shahin Farshchi** (2:00)
Yes, it's absolutely justified.

**David Hoffman** (2:02)
Okay. That's a pretty simple answer.
So the hype around robotics, I think comes downstream of a lot of products or companies coming live with humanoid robots. Is that what gets you excited about robotics? The humanoid element, the figure in Tesla, Optimus Prime robots, is that the same? Because that's my sector. That's what are getting people excited in my neck of the woods. Is that the same for you?

**Shahin Farshchi** (2:26)
No, so I'm not particularly excited about the humanoids.
I'm excited about the most recent wave of innovations in AI and cheap manufacturing and the ability to make things that are extremely complicated, systems that are very complicated at a very low price.
So you combine the intelligence with the cheap manufacturing together, and you have products otherwise wouldn't have been possible for certain use cases. Robotics is not new.
Automation isn't new. We've had automation for decades, if not a century, with the advent of the assembly line, with the creation of Ford.
And so my view is that over the past, I would say 15 years with AI in the form of convolutional neural nets in the early 2010s, and the continued slope of cost reduction with robotic arms, we've seen a whole new wave of new robotics applications. And I think the humanoid robotics are a manifestation of that. But my personal excitement in robotics and automation isn't rooted in the humanoids, is rooted in this more macro tailwind around the software that drives the robots and the commoditization of the hardware that the software runs on. If you rewind back to, say, the 1970s, there was a similar opportunity, a similar moment around the integration of microprocessors, which were the equivalent of AI of our time, into robotics. And that's how you saw robotics enter into, for example, automotive manufacturing. You had these robotic arms that had a level of intelligence in them that allowed them to be programmed to very fine specifications to do very specific tasks like welding, riveting, gluing, painting, various types of inspections. And that's what began this rapid peripheralization of robotics into the broader manufacturing setting. Whereas today, when you walk into most automotive manufacturing facilities, a lot of the basic steps in automotive manufacturing are completely automated. You don't see any people involved at all until the later steps where various parts of the interior, the wiring harnesses, the glass are starting to be installed in the vehicle. And what we're seeing today, to the point that you brought up, is a lot of the companies that sell into these larger companies also having the benefit of automation. So when you walk into a Ford factory, you see a ton of automation. But if you walk into the factory that sells the components that are sold into the Ford factory, you may not see as much automation because they don't have the budgets. They don't have the investment to be able to invest the way Ford can invest in its automation. And now what we're seeing with AI is just like how it is now easy for anybody to generate code. It's becoming as easy for anyone to program a robot. And these robots are getting very cheap. And so now you're seeing a lot of these companies that otherwise didn't have access to robots. These industries otherwise didn't have access to robots. Now getting access to them in a way we hadn't seen before. So that's what catalyzes my excitement around robots, which may be slightly different than what's catalyzing yours or perhaps others' excitement around robotics. And that would just perhaps be in the minority of folks that probably, you know, I'm optimistic, but I'm not as excited about what we're seeing right now in humanoid robots yet as perhaps others are.