Investing in AI for Hard Tech, with Eric Vishria of Benchmark and Sergiy Nesterenko of Quilter

**Nathan Labenz** (0:00)
Hello, and welcome to The Cognitive Revolution, where we interview visionary researchers, entrepreneurs, and builders working on the frontier of artificial intelligence. Each week, we'll explore their revolutionary ideas, and together, we'll build a picture of how AI technology will transform work, life, and society in the coming years. I'm Nathan Labenz, joined by my co-host, Erik Torenberg. Hello, and welcome back to The Cognitive Revolution.
Today, we have a short but fascinating conversation about investing venture capital into the AI wave and about the application of AI to hardware problems with Erik Vishria, general partner at Benchmark, and Sergiy Nesterenko, founder and CEO of Quilter.
Regular listeners will recall that we recently cross-posted an episode featuring Sergiy from Will Summerlin's autopilot feed, but rest assured that this episode covers almost entirely new territory, including what amount to my follow-up questions on Quilter's vision for superhuman circuit board design, the reinforcement learning approach that they're taking to get there, and what this could all enable for society more broadly. We also get Eric's point of view on what sorts of investments are likely to pay off in the AI era, starting with the provocative vision of circuit board design as an AI and done problem, not another copilot problem, that attracted him to Quilter in the first place. We also consider the questions that Benchmark asks in an attempt to determine whether a new company is solving an enduring or a temporary problem, and we discuss the reasons that Benchmark has not invested in any foundation model companies to date. Erik describes these companies as investing huge amounts of capital to create some of the most remarkable, but also some of the most rapidly depreciating assets in venture capital history.
As always, if you're finding value in the show, we'd ask that you take a moment to share it with friends. And at the same time, we invite your constructive feedback and your topic or guest suggestions either via our website, cognitiverevolution.ai or by DMing me on your favorite social network. Finally, a quick reminder that I am looking to connect with aspiring AI engineers and also AI advisors who are excited about helping Main Street businesses take advantage of AI technology. I've mentioned this twice and got good feedback each time, so please keep it coming, and before long, we might have a Cognitive Revolution jobs board on our hands. For now, I hope you enjoy this under-the-hood look at AI investment strategy and this glimpse into the future of AI-powered hardware design with Erik Vishria of Benchmark and Sergiy Nesterenko of Quilter. Erik Vishria, general partner at Benchmark and Sergiy Nesterenko, founder and CEO at Quilter. Welcome to the Cognitive Revolution.

**Erik Vishria** (2:33)
Thank you for having us.

**Nathan Labenz** (2:35)
Yeah, excited for this conversation. Regular listeners will of course know that we ran a cross-post with Sergiy from Will Summerlin's new feed on all things AI in automation.
And so for the deep dive on Quilter, that's the episode to check out to get up to speed and learn how the company is approaching the automation of integrated circuit board designs with a reinforcement learning approach, which is fascinating. Today, I think kind of a little bit of a broader conversation on just kind of where this whole AI thing is going, big picture and how you guys are thinking about both investing in companies that will hopefully stand the test of time and also try to build a company that will be able to successfully ride the wave and not be crashed over by the wave, which is definitely like a challenging dance for many founders right now. I guess, Erik, maybe you want to start off with just giving a little bit of background as to what it was that got you guys interested in Quilter specifically and how that fits into your broader philosophy and portfolio?

**Erik Vishria** (3:37)
Sure. Super, super excited to be here. So thank you again for having me and having us on the show.
There's no shortage of AI startups out there. So we're each of us, each of the benchmark partners probably meeting four or five of them a week. And so you're kind of perpetually meeting new ones. And a lot of them sound really interesting.
You know, they're really interesting ideas. And I would actually even say the revenue traction on a lot of the companies is tremendous. Like it's just unlike anything that we've seen just in terms of the speed of revenue traction and everything else.
But obviously in the kind of timeline that we're investing as early stage investors, you're looking on a five or ten year horizon really of the company maturing into a big business and wanting to be one of these exceptional kind of companies that get created in our industry a few times a decade. And so a big part of what we're looking at is which of these companies is not just riding the wave and not just on a sugar high as I would describe it of either revenue or traction or developers or hype investor dollars, but has an opportunity to build a really big business. And obviously that's really hard to figure out at the early stages of a company, but that's what we're paid to do, so that's what we try to do. And one of the frameworks that I use right often is just, well, what's changing in the world that is going to enable this company to be really large? Which has nothing to do with company, actually. It's just like what's happening in the world. And of course there's AI, which is okay, that's a way. But there's actually, you need something more substantive and specific for a company to be able to be created and be durable around that. And I think in the case of Quilter, there were a couple of things that really caught my eye, which was first off, obviously electronics are permeating every aspect of our life, right?