VC Funding in Physical AI Surges in 2026

Venture capital investment in physical AI companies has seen a substantial increase in 2026. Venture investors are increasingly viewing physical AI as the next major growth area following the broader AI boom. Global funding in the sector reached $47.4 billion across 521 deals in the first half of 2026, a nearly fourfold increase compared to the second half of 2025.

This surge is driven by a shift in investment focus, with firms traditionally backing software and internet companies now funding startups developing physical technologies and materials tied to AI. Notable large deals include Waymo's $16 billion Series D round in February and Anduril Industries' $5 billion funding in May. Other significant investments were made in Shield AI ($2 billion) and Saronic ($1.75 billion).

The physical AI sector, which includes robotics, autonomous vehicles, aerospace, and industrial automation, has also experienced notable exits. SpaceX's IPO in June raised $75 billion. Additionally, acquisitions such as Mobileye's purchase of humanoid robotics startup Mentee Robotics for approximately $900 million highlight the sector's activity.

Industry observers note that the convergence of AI with hardware, sensors, and IoT is expanding the potential of physical AI. Experts like Ryan Ziegler of Edison Partners highlight AI's ability to process vast amounts of data from physical systems, coupled with decreasing hardware costs, is creating new opportunities. This is particularly relevant for traditional industries like manufacturing, supply chain, and transportation, where physical AI can drive efficiency through predictive maintenance and autonomous operations.