Palo Alto-based venture capital firm Eclipse has secured $1.3 billion in fresh capital to back startups merging artificial intelligence with real-world applications. The fund splits between $591 million for early-stage incubation and growth-stage investments, targeting sectors like transportation, energy, infrastructure, and defense. Notable portfolio additions include electric boat developer Arc, battery recycler Redwood Materials, and autonomous vehicle tech firm Wayve.

Partner Jiten Behl frames this as a shift from digital innovation to physical AI, where intelligent systems solve tangible problems.