Investing in AI: SE Ventures' Strategy for Industry

The global economic landscape is undergoing an unprecedented transformation. Artificial intelligence (AI) is no longer a technology confined to software; it is an engine driving a profound reindustrialization. For companies and investors who want to invest in AI successfully, it is crucial to understand how AI is reshaping the economy’s “physical layer” — the physical infrastructure and core operating systems such as data centers, energy grids and robotics. This shift opens an era of growth powered by breakthrough computing capabilities, redefining key sectors and creating new opportunities for strategic investment.

Venture capital — a form of financing for startups and companies with high growth potential — is emerging as the primary catalyst for this revolution. Navigating the complexities of this new cycle requires a deep understanding of technology trends, along with strategic wisdom honed over years of experience. Investment decisions, the building of lasting relationships and the ability to discern true potential are decisive factors for success. The macro-trend is twofold: on one side, AI-driven innovation is reshaping crucial industrial sectors; on the other, the evolution of venture-capital best practices is essential to sustain that growth. Innovation must translate into tangible, lasting value.

SE Ventures: Investing in AI Innovation for Industry

Schneider Electric, with nearly two centuries of history, has adapted to successive industrial revolutions. It has gone from a steel manufacturer to a global leader in energy management and automation. Today, Schneider Electric is at the forefront of this new wave — through its $1 billion venture-capital arm, SE Ventures, founded to anticipate where the market is heading. The company is betting that the next great transformation will be driven by the collision of artificial intelligence with the physical world, extending from data centers and power grids to robotics and industrial automation.

Amit Chaturvedy, global head and managing partner of SE Ventures, joined the company in 2022 after leading corporate investments at Cisco. He points out that AI’s biggest opportunities extend well beyond software. SE Ventures backs technologies that underpin the AI economy — from data-center infrastructure to grid resilience and industrial robotics. Chaturvedy identifies the “capacity to build” as the scarcest resource in this sector, encompassing buildings, real estate, energy, power and electrification equipment.

SE Ventures’ key investment areas reflect this strategic vision, resting on three fundamental pillars. First, AI infrastructure is crucial: the surging demand for compute to train and run models is driving investment in startups such as Together AI. Chaturvedy expects that, within five to seven years, data-center efficiency will become a top priority — a problem another portfolio company, Hammerhead AI, is already working on. As a leading player in data-center electrification, Schneider Electric finds significant strategic opportunity in these partnerships.

Second, AI’s impact on the power grid is immense. Grid demand is hundreds, if not thousands, of times greater than that generated by vehicle electrification — which had already strained infrastructure. SE Ventures invests in everything that contributes to grid resilience, recognizing the need to expand capacity to support the integration of renewables and AI’s growing energy requirements. Finally, AI is radically transforming the industrial world. Robotics, in particular, benefits from general-purpose AI models that allow the same robotic hardware to perform multiple tasks — previously impossible because of the limits of cognition and inference at the edge. Skild AI, a company in SE Ventures’ portfolio, is a market indicator of this trend. Likewise, companies such as Axion use AI to analyze warranty data and provide feedback to design engineers at large firms. AI can deliver transformative use cases in industry.

SE Ventures counts eight “unicorns” in its portfolio — privately held startups valued at at least $1 billion — and has recorded 12 exits. Among them is the recent acquisition of Fabric8Labs, a metal 3D-printing technology, by TDK Corp. Around 80% of the portfolio startups have a commercial relationship with a Schneider Electric unit, often as partners serving customers — what Chaturvedy calls a “holy grail”.

Key Lessons from Venture Capital: A Guide for Founders and Investors

The world of venture capital is fertile ground for continuous learning. A veteran with fourteen years in the sector has distilled 14 fundamental lessons useful for investors, founders and anyone curious about the startup ecosystem. These insights underscore the importance of factors that go beyond mere financial analysis, reaching into the realm of human relationships and long-term strategy.

One crucial lesson concerns the power of networking. The ecosystem is smaller than you might imagine, and your network extends far beyond your closest contacts. Being “the last to leave” an event can lead to more honest conversations and unexpected connections. Many of the best opportunities come from people you would never expect to help you. This network is not just for winning deals; it also builds a solid reputation. The people on the edge of your circle are often the ones who spread the general sentiment about you.

The importance of due diligence is another pillar — and not only a task for investors, but for founders too. Investors seek information through informal channels to tell the truth from the “party line”, the official version. Founders should do the same, investigating their potential funders. Understanding who your backers are and what they bring to the table is crucial. Being selective about your investors is what secures growth: the cap table must support growth, not merely survival.

Finally, soft skills matter as much as technical intelligence. In a people-centered business, emotional intelligence (EQ) and IQ are equally essential. Founders and venture capitalists must be able to manage and communicate effectively with people, showing empathy and recognizing its value. Moreover, diversity and excellence are not mutually exclusive: diversity prevents stagnation, spurs innovation and leads to better outcomes. The difficulty of finding “the right talent” as a justification for a lack of diversity is often an excuse. Recognizing your own limits is another piece of valuable wisdom — no founder or VC can be an expert in everything, and understanding your blind spots and seeking outside expertise can make the difference. There is no single “best model” of VC: the right choice depends on the nature of the business and the kind of support needed. Funds with a smaller portfolio, for instance, may be “hungrier”, willing to put more effort into nurturing their founding teams — and they reveal their true nature when things do not go as planned.

The intersection between AI’s transformative impact on industry and the fundamental lessons of venture capital reveals a critical synergy. The “capacity to build”, identified by SE Ventures’ Amit Chaturvedy, is the scarce resource in the new cycle of AI-driven industrial investment. It calls for capital that is financially robust, strategically intelligent and patient. Here, the lessons of VC become illuminating for anyone who wants to invest wisely. The need for thorough due diligence — including the use of “informal intel” — is particularly relevant when evaluating complex investments in physical infrastructure or advanced robotics, where technical understanding and market dynamics are nuanced. An investor who knows their own limits can better navigate high-intensity sectors, mitigating the risks inherent in them.

The “capacity to build” is the scarcest resource in the new cycle of AI-driven industrial investment.

Moreover, the tension between big-name VC “brands” and funds with smaller portfolios is relevant for startups operating in the economy’s “physical layer”. These sectors often require longer development cycles and more substantial capital. A “hungrier”, nurturing-oriented fund can be a more valuable partner — willing to “roll up its sleeves” to help founding teams overcome obstacles, especially when things do not go according to plan. This approach aligns with SE Ventures’ vision, which frequently establishes commercial relationships with around 80% of its portfolio companies, demonstrating a commitment that goes beyond mere financing and aims at a long-term strategic partnership. That said, access to global networks and the credibility of a big brand can accelerate growth in ways a smaller fund struggles to replicate — creating a dichotomy that founders and investors must weigh carefully.

AI is the engine powering a profound global reindustrialization.

Today’s landscape is defined by an unstoppable convergence. Artificial intelligence (AI) is no longer an isolated technology; it is the engine powering a profound global reindustrialization. SE Ventures’ data highlights a massive shift of capital toward the economy’s “physical layer” — data centers that consume energy exponentially, power grids under pressure and advanced robotics. This wave of innovation demands enormous investment, as well as a strategic, relationship-driven approach from venture capital. In this arena, investing means betting on the future with discernment.

The lessons learned over fourteen years of venture capital remind us that success depends not only on the ability to identify the next great technology, but also on mastery in building relationships, the importance of emotional intelligence and awareness of one’s own limits. The real challenge for the future is to integrate these lessons.

Source eu-startups.com