Thiel Capital's Jack Selby Uses Arizona Network to Invest in High-Growth Startups Like Etched
Most venture capital firms compete for the same deals in the same zip codes: Sand Hill Road, SoHo, Cambridge's Kendall Square. Jack Selby has been doing something different. As managing director of Peter Thiel's family office, Thiel Capital, and founder of Phoenix-based Copper Sky Capital, formerly known as AZ-VC, Selby has spent the past four years building an investment thesis that treats geography itself as an edge. When Copper Sky invested in Etched, the AI chip startup now valued at $5 billion, it was not simply writing a check. It was offering something that most coastal VCs could not: a genuine pathway to semiconductor manufacturing capacity in Arizona, through the TSMC GIGAFAB facility that is reshaping the state's economic identity.
Etched this week announced that TSMC had manufactured its first chip earlier in 2026, with plans to ship systems to customers later this summer. The announcement surfaced the story behind how Copper Sky got into the deal, and it turned out to be a more layered answer than a typical venture allocation. Selby secured his firm's investment position in part by promising to help the startup eventually reshore its chip fabrication from TSMC's constrained Taiwan facilities to Arizona, using his seat on the Arizona Commerce Authority board as the practical vehicle for making that connection real rather than rhetorical.
Who Jack Selby Is and How He Got to Arizona
Selby's biography reads like a document from the founding generation of the modern technology industry. He joined PayPal as an original employee and later served as a corporate officer and senior vice president, overseeing the company's international and corporate operations. When PayPal was sold to eBay in October 2002, Selby and Peter Thiel went into business together, co-founding Clarium Capital Management, a macro hedge fund that they continue to run as part of Thiel Capital's broader portfolio of strategies. His three decades of working alongside Thiel have given him access to the investment relationships, deal flow, and technology industry network that defines what the PayPal Mafia term means in practice: not just a social connection but an ongoing commercial infrastructure that continues to generate returns well after PayPal itself ceased to be the group's primary enterprise.
Beyond Thiel Capital, Selby is involved as an advisor or investor in SpaceX, Palantir, Affirm, Myeloid Therapeutics, Kisbee Therapeutics, Resonance Medicine, and Paradox, among others. His roles outside venture investing include serving on the boards of the Arizona Commerce Authority, the Arizona Sports and Tourism Authority, and the Grand Teton Music Festival, as well as serving as an Ambassador to the Navy SEALs Foundation. He is also an independent film producer, with credits including Act of Valor, Silk Road, and Freeheld.
What led him to establish a Phoenix-based venture firm in 2021 was a conviction that the coastal venture capital model had become its own kind of market inefficiency. Most Arizona-based startups were forced to fly to Sand Hill Road for meetings with investors who had never visited the Southwest and priced deals based on comparables from markets that had little in common with Phoenix's cost structure, talent dynamics, or industrial base. Selby's thesis was that fixing this required someone with the network to access quality deal flow from coastal companies while also possessing genuine local relationships that could add value beyond a wire transfer.
"When Copper Sky invested with Etched, the company clearly understood our connectivity to the Arizona semiconductor industry, and in particular the local TSMC GIGAFAB."
- Jack Selby, Founder and Managing Partner, Copper Sky Capital
Copper Sky Capital: From AZ-VC to a $300 Million Second Fund
Selby founded the firm in 2021 under the name AZ-VC, the largest venture capital firm in Arizona at the time of its founding. The name changed to Copper Sky Capital as the firm's geographic mandate began to expand, but the underlying thesis remained consistent through the rebrand. The first fund of $115 million focused primarily on startups based in Arizona and the Southwest, with a Series A investment strategy targeting post-revenue companies with proven product-market fit. The fund's sector-agnostic approach reflected Selby's belief that the most interesting investment opportunities in non-coastal markets tend to be connected to the existing industrial and economic strengths of each specific geography rather than to a predetermined category preference imposed from outside.
Fund I's portfolio includes Etched, Bluetail, Nuclearn, Stax.ai, Velocity Engine, Soraban, Uplinq, Orama, and Peerlogic. The range of companies reflects the genuine sector agnosticism of the mandate: AI chips, software, nuclear energy adjacencies, and enterprise tools appearing alongside each other in a single fund because the unifying criterion is not sector but quality of company at a non-coastal valuation. Selby has described the fund's approach as a simple arbitrage: invest at a reasonable, non-coastal price, then help entrepreneurs build and scale their businesses. When portfolio companies are ready to find their coastal VC equivalent, Copper Sky takes them by the hand to Sand Hill Road or the equivalent. Rinse and repeat.
The second fund now in the process of being raised carries a target of $300 million, a figure that represents a significant jump in scale and reflects the expansion of the firm's mandate beyond the Southwest to include non-traditional venture hubs nationwide. Bloomberg reported in February 2026 that Selby is courting family offices in the Middle East, Europe, and the central United States to fill the fund. The LP base being targeted, international family offices rather than institutional endowments and pension funds, reflects both the relationships Selby has built through his Thiel Capital role and a deliberate strategy to access capital pools that are often more patient with long-duration technology investments than institutional LPs operating under shorter return-reporting cycles.
The Etched Investment: How Arizona Access Won an Allocation
The Copper Sky investment in Etched illustrates the specific competitive advantage that Selby's Arizona positioning creates in ways that a conventional venture capital firm cannot replicate, regardless of how much capital it manages. Etched is an AI chip startup that designs transformer-specific chips, positioning itself as a specialized competitor to NVIDIA in the specific workload of large language model inference. The company raised a $120 million Series A, and at the time of that round, Copper Sky was not the most obvious investor to receive an allocation. It was a $115 million regional fund, not a tier-one Silicon Valley growth investor with a multibillion-dollar platform and decades of semiconductor relationships.
What Selby offered was different from what a larger fund could provide. Etched, like every other chip design company not named Intel, NVIDIA, or Qualcomm, faces an acute manufacturing capacity constraint at TSMC. TSMC's Taiwan facilities are massively oversubscribed, and the queue for advanced node manufacturing capacity is long and competitive. A chip company with an excellent design and strong demand still has to solve the physical problem of getting its chips made at scale, on a timeline that allows it to ship to customers before competitors do. TSMC's Arizona GIGAFAB, the facility being constructed and expanded in Phoenix as part of the CHIPS Act-motivated reshoring strategy, represents potential domestic capacity that could eventually reduce that dependence on Taiwan. Selby sits on the board of the Arizona Commerce Authority, the state agency responsible for recruiting out-of-state businesses to establish manufacturing operations in Arizona. That board position gives him a direct operational role in facilitating exactly the kind of introduction and facilitation that a chip company moving production to Arizona would need.
When Selby made the pitch for Copper Sky's allocation in Etched's Series A, the proposal was explicit: the firm's connectivity to the Arizona semiconductor industry, and in particular to the TSMC GIGAFAB, gave Copper Sky something to offer that a larger fund's check alone could not. Etched understood and valued that connectivity enough to allocate to Copper Sky alongside larger investors. Two years later, with TSMC having manufactured Etched's first chip and systems planned for customer delivery in summer 2026, the manufacturing constraint that Selby's Arizona connections were meant to help address has become the company's most pressing scaling challenge rather than a hypothetical future concern.
What Etched Is Building and Why It Matters
Etched's technology premise rests on a specific architectural bet about where AI inference workloads are going. Most current AI chips, including NVIDIA's GPU-based systems, are general-purpose processors that are good at transformer model workloads but not exclusively designed for them. Etched builds chips that are specifically hardwired for transformer computations, trading flexibility for efficiency and performance on the specific workloads that dominate large-scale AI deployment today.
The trade-off is real: a transformer-specific chip cannot be reprogrammed for other workloads the way a GPU can. The bet embedded in Etched's design is that transformer architecture will remain the dominant paradigm for large-scale AI models long enough to justify the specialization, and that the performance and efficiency advantages of a dedicated chip will be commercially compelling enough to attract enterprise buyers despite the architectural lock-in. At a $5 billion valuation, investors are clearly placing meaningful capital behind that bet.
The manufacturing constraint that Copper Sky's Arizona connection is intended to help address is a concrete near-term problem rather than a long-term consideration. Etched's chip design has been validated by TSMC's manufacturing process, which represents the foundational engineering milestone for any chip company. The challenge is now capacity: TSMC's Taiwan facilities are operating near full utilization for advanced node manufacturing, and every chip company, including NVIDIA, Apple, AMD, and dozens of AI chip startups, is competing for time on the same manufacturing lines. Arizona's TSMC facility, once it reaches sufficient capacity at advanced nodes, represents a potential path to domestic manufacturing that both reduces geopolitical supply chain risk and potentially opens additional capacity beyond what Taiwan can currently provide.
Why Arizona Is Becoming a Semiconductor Hub
The context for Selby's investment strategy is the broader transformation of Arizona's economic identity that has been underway since the CHIPS and Science Act was signed in 2022, committing tens of billions of federal dollars to domestic semiconductor manufacturing investment. TSMC's decision to build its first US facility in Phoenix was the most significant individual announcement of that reshoring wave, and the subsequent expansion of that commitment to include multiple fabrication facilities has made Arizona one of the most strategically important manufacturing locations in the American semiconductor supply chain.
That infrastructure investment is not just about the chips themselves. It creates an ecosystem of supporting industries, engineering talent, supply chain companies, and institutional knowledge that tends to compound over time. Intel has a significant manufacturing presence in Arizona as well. TSMC's decision to locate in Phoenix specifically rather than elsewhere in the United States created a geographic concentration of advanced semiconductor manufacturing that mirrors, in nascent form, the clustering effect that made Taiwan's semiconductor ecosystem so formidable over the past four decades. For a venture firm explicitly positioned at the intersection of Arizona's investment community and its emerging semiconductor industry, this concentration creates a compounding strategic asset rather than a one-time deal advantage.
- TSMC's Arizona GIGAFAB represents a major concentration of advanced semiconductor manufacturing capacity outside Taiwan for the first time in the company's history
- Intel's existing Arizona manufacturing footprint adds complementary semiconductor ecosystem depth to the state
- The Arizona Commerce Authority's mandate of recruiting out-of-state businesses to establish Arizona manufacturing operations creates a policy infrastructure that amplifies private investment
- Federal CHIPS Act investment in domestic semiconductor manufacturing has made reshoring economically attractive for chip companies that previously had no compelling reason to consider US fabrication
- The resulting talent concentration and supply chain development creates compounding ecosystem advantages over time, similar to the clustering effects that built Silicon Valley and Taiwan's Hsinchu Science Park
The Geographic Arbitrage Thesis: Pricing What Coastal Markets Miss
Selby's investment framework rests on a specific economic observation that he has been consistent in describing publicly: coastal venture markets, particularly California, Massachusetts, and New York, systematically overprice companies relative to the underlying metrics of those businesses. The premium reflects supply and demand dynamics in markets where capital concentration is high, competition for deals is intense, and cultural familiarity creates systematic upward pressure on valuations regardless of whether the fundamentals support the price.
The logical implication is that equivalent companies in non-coastal markets, companies with comparable revenue, growth rates, team quality, and market opportunity, should trade at a discount to their coastal equivalents purely because they are not in markets where VCs are competing aggressively for deals. Selby has described this discount as approximately 70% versus coastal companies with similar financial metrics, which is a striking figure if it holds across a portfolio rather than representing individual cherry-picked comparisons. The arbitrage opportunity is the gap between what a company costs in Phoenix or Tucson and what it would cost in San Francisco or Boston, after controlling for the underlying business quality.
This thesis is not unique to Selby or to Copper Sky. Generalist investors including Founders Fund, where Peter Thiel's direct involvement connects philosophically to Selby's approach, have periodically argued that coastal market pricing creates structural opportunities for investors willing to look where competitive pressure is lower. What makes Copper Sky's version of this thesis more specific is the Arizona component: not just non-coastal geographic arbitrage in general, but a specific bet on Arizona as a state where the industrial investment being made in semiconductors and advanced manufacturing creates a type of venture opportunity that a generic non-coastal discount thesis does not capture.
Thinking Beyond Arizona: The Middle America AI Thesis
As Copper Sky has evolved from AZ-VC into a broader national firm raising its second fund, Selby has articulated a more expansive version of the geographic thesis that extends the underlying logic beyond Arizona specifically. In an interview with Crain Currency in June 2026, Selby described his approach to non-coastal investing through the lens of what AI does to regional economies with existing industrial strengths.
He pointed to Carvana, the online used car marketplace that emerged as Arizona's most significant technology success story, as an illustration of the kind of company that can be built anywhere when the local industrial conditions are right. Arizona's proximity to the used car business, through founder Ernie Garcia Jr.'s family connection to DriveTime, gave Carvana a specific starting advantage that a generic technology company could not have replicated elsewhere without that same industrial context. Selby's question is what the Carvana equivalent is in Houston, Cleveland, or Milwaukee, what specific company could be built in each place that draws on the particular industrial and economic history of that geography in the same way Carvana drew on Arizona's used car ecosystem.
The AI dimension of this thesis is that AI tends to amplify the economic value of existing industrial processes rather than replacing industries wholesale in the near term. A company applying AI to logistics in a city with a large logistics sector, or to manufacturing quality control in a city with a strong manufacturing base, has advantages over a generic AI application company in a coastal tech hub that is trying to serve the same industrial customers from a geographic and cultural distance. Selby's approach to identifying those opportunities is to look for the places where existing industrial strength, available talent, lower cost structure, and improving access to capital intersect in ways that coastal investors have not yet priced in.
The Portfolio Beyond Etched
Etched is the most visible company in Copper Sky's Fund I portfolio, partly because of its AI chip focus and partly because of the TSMC connection that has made it a symbol of the Arizona reshoring narrative. But the fund's other holdings illustrate the sector-agnostic breadth that Selby's investment mandate allows.
Nuclearn, the nuclear energy adjacency investment in the fund, reflects the defense and advanced energy themes that Selby has explicitly identified as priority areas for the second fund alongside semiconductor manufacturing. Paradox, the HR technology company that was acquired by Workday in what became the largest M&A deal in Arizona's history, was a Fund I holding whose exit validated both the regional thesis and the ability of Arizona-based companies to achieve exits that coastal-caliber investors would recognize as significant. Stax.ai, Velocity Engine, Soraban, Uplinq, Orama, and Peerlogic fill out a portfolio that spans enterprise software, B2B tools, and specialized platforms with the common thread being post-revenue, product-market-fit-validated companies that are priced based on Southwest market dynamics rather than coastal comparables.
What the $300 Million Second Fund Signals
The jump from a $115 million first fund to a $300 million target second fund is not just a quantitative expansion. It represents a qualitative shift in what Copper Sky can do and whom it can compete with for deals. At $115 million, the fund was appropriately sized for regional Series A investing where deal sizes rarely exceed $10 to $15 million per check. At $300 million, the firm can participate meaningfully in larger rounds, follow on into growth-stage investments, and compete for allocations in coastal deals where the ticket size requirements previously excluded a smaller fund.
The LP base being assembled for the second fund, with Bloomberg reporting that Selby is courting family offices in the Middle East, Europe, and the central United States, reflects a specific distribution strategy. International family offices with long investment horizons and genuine interest in the US technology market are often better positioned than institutional LPs to tolerate the longer capital cycles and non-benchmark geography that a thesis like Copper Sky's requires. A university endowment or pension fund has performance reporting requirements that create pressure toward conventional markets. A family office managing generational wealth with a thirty-year time horizon can more readily accept the premise that Arizona's semiconductor ecosystem will compound in value over a decade in ways that current pricing does not fully reflect.
The expansion also positions Copper Sky to be relevant to the defense hardware investments that Selby has explicitly identified as a second fund priority. Defense hardware startups building manufacturing operations in Arizona, a state with significant existing military infrastructure and proximity to key defense installations in the Southwest, represent the intersection of Selby's semiconductor connectivity, his geographic thesis, and the substantial federal procurement opportunity that the current US defense spending environment creates for dual-use hardware companies.
What to Watch Going Forward
The near-term signals that will test Copper Sky's thesis most directly are the ones attached to Etched's manufacturing trajectory. If TSMC's Arizona facility develops the advanced node capacity necessary to manufacture Etched's transformer chips at meaningful volume within a commercially relevant timeframe, it will validate the specific claim that Selby made to Etched's founders when securing the initial allocation: that Arizona connectivity represents real operational value rather than a networking gesture. If the Arizona TSMC facility remains focused on less advanced nodes for longer than the chip industry's timeline requires, the connection will have been a positive introductory one without the manufacturing outcome that justified it.
The second fund raise is the second signal. A successful close at $300 million or above would confirm that Selby's LP development approach, focused on international family offices rather than traditional institutional capital, is commercially viable at a scale that allows Copper Sky to compete in the coastal deals its expanding mandate targets. A difficult close would suggest that the geographic and sector thesis, while coherent, has not yet generated enough demonstrated returns from Fund I to compel new investor commitments at the larger scale.
The Paradox-Workday acquisition provided one meaningful exit from Fund I. Etched's trajectory toward customers shipping this summer will provide a second data point about whether the fund's most attention-getting portfolio company can convert technical validation into commercial revenue at the scale its valuation implies. For a thesis built on the premise that non-coastal companies can achieve coastal-caliber outcomes when given access to the right relationships and manufacturing infrastructure, Etched becoming a genuine semiconductor business rather than a well-funded research project is both a commercial milestone and a proof point for the entire investment model Copper Sky is building.
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