Defense, energy, robotics and government have historically been classic no-go areas for VC investment. These “hard” industries have slow procurement cycles, tight regulatory oversight and high-friction customer migration in common. Legacy software vendors serving them have benefited from a barrier of complexity to innovate slowly without facing the risk of customer churn.

This made the victims of this year’s AI anxiety-driven sell-off all the more dramatic. Software juggernauts serving heavy industries — IBM, SAP, ServiceNow, Schneider Electric — have gone from safe bets to being the subject of investor scrutiny. READ MORE