Robotics startups raised $33.4 billion in the first half of this year, more than all of last year, as investors bet that smarter AI finally makes robots worth funding.
Robots used to be a reliable way for investors to lose money. Now they are one of tech's hottest bets. Robotics and "physical AI" companies raised $33.4 billion worldwide in the first half of this year, according to PitchBook data. That is already more than the $28.7 billion raised in all of last year. In 2020, the figure was just under $5 billion.
Business Insider points to a mix of causes: cheaper hardware, smarter AI models, labor shortages and competition with China. Advances in AI are helping robots sense their surroundings, make decisions and adapt to new tasks. That raises hopes for flexible machines instead of a new robot built for every job.
That was the old problem. Investor Sarah Guo, founder of the firm Conviction, said past robots were "brittle, single-purpose" systems built by hand for one task. She used to tell other investors that robotics was a good way to lose a lot of money over many years.
Big names are joining in. Travis Kalanick's Atoms raised $1.7 billion in July. Meta bought a robotics startup in May. Google has invested in humanoid maker Apptronik. OpenAI has advertised robotics jobs with base pay up to $500,000 a year. In August, Andreessen Horowitz raised a $1.1 billion fund for the physical side of AI, including robotics.
Some investors are nervous. Startups still in research often have multibillion-dollar valuations with little revenue. Humanoid maker Figure AI was valued at $39 billion last year, yet its robots are limited to small factory pilots. Guo put it this way: "Robotics is going to happen, and a lot of money will still be lost." Veterans also whisper about "hardware tourists," investors drawn by AI hype.
Software mostly works on screens. Robotics companies are aiming at physical labor, from factories and construction sites to robots in the home. Nvidia CEO Jensen Huang has described it as a chance to bring technology to a $50 trillion industry. Berkeley robotics professor Ken Goldberg said that in his 45 years in the field, this is the most funding and interest he has seen.
How soon robots become part of daily life, and what still stands in their way, is not settled. Business Insider says its new Robonomics series will look at that question.
Record money is flowing into robots, but many of the companies are still unproven, so expect real change to come more slowly than the funding suggests.
OpenAI has about $11 billion in hand at a $1.25 trillion value, below its first ask. Microsoft and NVIDIA shareholders have reason to watch what comes next.
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