Analysis
Jack Selby, a former PayPal executive and longtime managing director at Peter Thiel's family office, Thiel Capital, has built a distinctive venture strategy around Arizona's semiconductor manufacturing base — and it's landing him stakes in some of AI's hottest hardware startups, TechCrunch reported July 2, 2026. Selby founded Copper Sky Capital (originally AZ-VC) in 2021, a Phoenix-based firm whose first fund raised $115 million targeting Southwest-based startups, and the firm is now raising a $300 million second fund according to SEC filings.
The firm's edge is not just capital — it's geography and access. Selby sits on the board of the Arizona Commerce Authority, a position he has used to help attract manufacturing operations, including chip fabrication, to the state. That access became a genuine investment thesis: Copper Sky secured its allocation in Etched's roughly $120 million Series A about two years ago partly by pledging to help the four-year-old Nvidia competitor eventually move chip fabrication to Arizona's TSMC GIGAFAB facility. "When Copper Sky invested with Etched, the company clearly understood our connectivity to the Arizona semiconductor industry, and in particular the local TSMC GIGAFAB," Selby said.
That early Etched bet has since paid off handsomely: Etched separately confirmed a $5 billion post-money valuation on June 30, 2026, following a $500 million round led by Stripes, with the company reporting $1 billion in contracted sales for its custom inference chips and systems — a validating outcome for the manufacturing-access thesis Copper Sky built its Series A participation around.
“The firm's edge is not just capital — it's geography and access.”
Selby's investment logic rests on a specific regional-arbitrage bet: coastal AI and hardware startups are overpriced relative to comparable regional companies, and California-based hardware firms in particular have a real incentive to relocate production to Arizona given the state's growing semiconductor manufacturing base, anchored by TSMC's Arizona fabs. Copper Sky's strategy extends beyond AI chips into defense-sector hardware companies more broadly — any startup for which a credible path to Arizona manufacturing operations is a meaningful value-add rather than a nice-to-have.
The broader significance goes beyond one firm: Selby's dual role — Thiel Capital managing director and Copper Sky founder — illustrates how thoroughly Peter Thiel's network of capital and personnel now runs through the AI chip and hardware ecosystem, from Etched's own investor list (which separately includes Thiel as an angel) to Copper Sky's institutional vehicle backing the same company from a different angle. It's also a case study in how state-level economic development infrastructure (a Commerce Authority board seat) can function as genuine, differentiated deal-sourcing leverage in venture capital, not just a ceremonial appointment.
For founders in AI hardware and chips, Copper Sky's model is a reminder that regional manufacturing access and government relationships can be worth real equity to the right investor, particularly as reshoring chip fabrication to the US remains a strategic priority across both industry and government. For LPs, a $300 million second fund (up nearly 3x from a $115 million first fund) is a meaningful vote of confidence in a strategy that isn't just about writing checks, but about actively brokering manufacturing relationships most coastal VCs can't offer.
What to watch: which additional AI hardware or defense-tech startups Copper Sky backs out of its new $300 million fund, whether more of its portfolio companies actually follow through on relocating or expanding manufacturing to Arizona, and whether other regional VCs replicate Selby's model of pairing state economic-development access with venture capital.
