Thiel Capital’s Jack Selby Expands Startup Investments Through Arizona’s Tech Network

AI chip startup Etched, a competitor to Nvidia, announced this week that Taiwan Semiconductor Manufacturing Company (TSMC) successfully produced its first chip earlier this year. While the four-year-old company, currently valued at approximately $5 billion, plans to begin shipping systems powered by the new processor later this summer, increasing manufacturing capacity could become a significant challenge. Like many semiconductor designers, Etched must compete for limited production space at TSMC’s fabrication facilities in Taiwan.

Copper Sky Capital, one of Etched’s earliest investors, believes the company may eventually overcome those manufacturing limitations by shifting part of its chip production to TSMC’s Arizona facility. When the venture capital firm invested in Etched’s $120 million Series A funding round two years ago, founder Jack Selby secured an allocation in part by offering to help the startup move its future chip manufacturing to Arizona.

Selby, a former PayPal executive and longtime managing director at Peter Thiel’s family office, Thiel Capital, launched Phoenix-based Copper Sky Capital in 2021. Originally operating under the name AZ-VC, the firm raised a $115 million debut fund focused primarily on startups located in Arizona and across the broader Southwestern United States. Selby’s investment thesis centred on the belief that startups based in traditional venture capital hubs such as California, Massachusetts, and New York often command significantly higher valuations than comparable businesses emerging from his own region. At the same time, he recognised an opportunity to support California-based hardware companies by helping relocate manufacturing operations to Arizona.

Selby attributes Copper Sky’s ability to invest in Etched—an otherwise difficult company for many investors to access—to his close involvement within Arizona’s technology and semiconductor ecosystem. As a member of the Arizona Commerce Authority’s board, Selby plays an active role in attracting companies from outside the state to establish manufacturing operations in Arizona.

“When Copper Sky invested in Etched, the company clearly understood our connectivity to the Arizona semiconductor industry, and in particular the local TSMC GIGAFAB,” Selby said.

Although Copper Sky has recently expanded beyond its original focus on the Southwest to consider startups in emerging venture markets throughout the United States, Selby said the firm remains particularly interested in investing in hardware businesses, including defence technology companies, that have the potential to establish manufacturing facilities in Arizona.

The firm is also preparing to increase its investment capacity. According to a recent regulatory filing, Copper Sky is currently raising a second fund worth $300 million, giving it additional resources to invest not only in higher-valued startups based in coastal technology hubs but also in promising companies across the broader U.S. startup ecosystem.