Utah investors weigh a shift from software to hardware as AI drives demand

Utah's venture community, built largely on software, is weighing a shift toward hardware as artificial intelligence drives demand for physical infrastructure, Utah Business reported. In early 2026, a market sell-off dubbed the "SaaSpocalypse" wiped out more than $1 trillion in market value, and the magazine said it touched Utah companies, including Domo, which announced its sale to Progress Software, and Weave, which is closing a take-private deal with Francisco Partners. ^[1]

Torus, a Salt Lake City energy storage company that designs and manufactures its products in Utah, moved into a 545,000-square-foot facility in January and is already "bursting at the seams," said Spencer Hall, its head of government affairs. Torus was the first hard tech investment by Convoi Ventures, a Utah pre-seed fund, and became its first unicorn. Convoi general partner Trent Mano said the firm has shifted further toward hard tech and physical AI. ^[1]

Pelion Venture Partners, one of Utah's established firms, has invested in Torus and Creekstone Energy, but chief financial officer Steve Glover said a majority of its investments are still in the application layer of AI. Texas Instruments has committed $11 billion to a semiconductor campus in Lehi, which Utah Business described as the largest single economic investment in Utah's history. ^[1]

The article said hard tech brings challenges, including intensive research and development, higher up-front capital and return horizons that can run past the typical five- to seven-year window. Mano said a $250,000 to $500,000 check often is not enough to get a hard tech company to prototype. Hall said Torus faces a permitting process for every new installation and that finding talent is the hardest part. ^[1]

Utah Business also noted that 64.5% of 2025 venture investment was concentrated on the West Coast, according to NVCA and PitchBook, and said the state's ability to attract outside investment will depend on whether it can adapt. ^[1]