Physical Intelligence, a robotics startup specializing in artificial intelligence software designed to power a wide variety of machines, is reportedly in negotiations for a new funding round that would see its valuation soar to approximately $20 billion. The discussions involve raising at least $1 billion in fresh capital, according to people familiar with the matter. If finalized, the deal would nearly double the company’s valuation from the $11.5 billion figure established during a funding round earlier this year.
The surge in investor interest comes as the robotics industry shifts toward developing general-purpose AI models capable of helping machines navigate and manipulate the physical world. Unlike traditional robotics companies that build software for specific hardware or single tasks, Physical Intelligence focuses on creating AI that can be integrated into third-party hardware to perform a broad spectrum of movements and chores.
Investment firms Avenir and Lux Capital are currently in talks to lead the new financing round. The startup has already secured an elite roster of backers, including Jeff Bezos, Thrive Capital, and Alphabet Inc.’s growth fund, CapitalG. This high-profile support persists despite the company having no recorded revenue to date.
Founded in 2024, Physical Intelligence was established by a team of former researchers from Google DeepMind and academic experts from Stanford University and the University of California, Berkeley. The company’s core mission is to solve the complex challenges of “real-world” robotic applications, which they have described as vastly more difficult than digital AI tasks. Current training efforts involve teaching robots to master common household activities, such as sorting dishes and cups into bins, bagging groceries, and installing light bulbs.
In a move that has recently intensified investor interest, the company made its latest robotics models available this month for external developers to access and fine-tune. This beta release allows third parties to test the software’s capabilities on different mechanical systems. This hardware-agnostic approach is seen as a potential standard-setter in an industry where specialized tasks like warehouse automation or robotic surgery have historically required dedicated, siloed companies.
Physical Intelligence faces stiff competition in the race to commercialize generalist robot brains. Both OpenAI and Elon Musk’s Tesla Inc. are aggressively pursuing physical AI capabilities. Other rivals, such as Skild AI, have also seen rapid growth; Skild was valued at $14 billion in January and recently reported passing the $100 million mark in annual recurring revenue. The massive valuation currently sought by Physical Intelligence suggests that venture capitalists are betting heavily on the potential for the startup’s software to become the foundational operating system for the next generation of autonomous machines.
