Robotics Startups See Funding Jump 185% As US And China Lead

Crunchbase News reported a substantial increase in venture funding for robotics startups in 2026, with the majority of investments going to companies based in China and the US. This trend may be driven by the growing demand for physical AI. The sector has seen significant growth, with funding increasing by 185% year over year.

The US and China are at the forefront of robotics funding, with Germany trailing behind. Companies in these countries are developing innovative technologies, including AI models and physical robots. The largest investments have gone to companies such as Xpeng Robotics and AI² Robotics in China, and Atoms and Skild AI in the US.

Notable investments have also been made in Germany, with Neura Robotics raising significant funds for its cognitive robots. These investments may indicate a shift towards more advanced robotics technologies. The development of physical AI requires significant investments in data and infrastructure, which may be driving the surge in funding.

According to Ulrik Stig Hansen, co-CEO of Encord, physical AI is still in its early stages, but it has the potential to revolutionize various industries. Hansen noted that building physical AI systems takes time and requires significant investments in data collection and infrastructure. The compute and storage capabilities needed to support these systems are being developed, but it may take time to see the full potential of physical AI.

The development of physical AI requires large datasets that combine vision, tactile, force, and torque. Storing and curating these datasets is a complex and expensive operation, according to Hansen. Despite these challenges, many companies are making significant investments in physical AI, which may lead to breakthroughs in the near future.

The surge in robotics funding has led to the emergence of new unicorns, with around 75 companies joining the unicorn board in the past three years. Many of these companies are building data and models for various vertical use cases, including heavy industry, manufacturing, and logistics. The direction of the sector remains uncertain, but it is clear that physical AI has the potential to transform various industries.

As the sector continues to evolve, it is likely that many companies will emerge as winners. Hansen noted that there are many different applications of physical AI, and companies that can develop innovative solutions may see significant success. The next year may be crucial for the development of physical AI, as companies race towards further breakthroughs.