The 2025–2026 Hardware-First Era in AI, Robotics, and Physical AI: A Surge of Funding, Strategy, and Innovation

The landscape of artificial intelligence (AI), robotics, and physical AI hardware has entered a transformative era marked by unprecedented capital flows, regional strategic initiatives, and technological breakthroughs. As 2026 unfolds, it is evident that the hardware-first paradigm—which emphasizes the development, manufacturing, and deployment of specialized physical AI systems—has become the backbone of AI's next wave, shaping societal, industrial, and geopolitical trajectories.

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Continued Surge in Capital and Ecosystem Expansion

Over the past two years, the AI hardware ecosystem has experienced a remarkable influx of investment, fueling startups, expanding manufacturing capacity, and reinforcing supply chains. Recent developments underscore a fierce global race to develop resilient, energy-efficient hardware solutions capable of supporting increasingly complex AI applications across various domains.

Notable Funding Milestones in Robotics and Hardware

• Robotics Sector:

  • Skild AI secured a $1.4 billion Series C, raising its valuation beyond $14 billion. Its scalable platform targets multi-domain robots for manufacturing, logistics, and service industries, illustrating the critical role of hardware scalability in enabling versatile autonomous systems.
  • Apptronik garnered an additional $520 million in Series A extension to advance Apollo, its humanoid robot designed for multi-purpose resilience. The goal: transition from prototypes to deployment-ready systems capable of operating seamlessly in industrial, urban, and household environments.
  • Machina Labs raised $124 million to develop AI-enabled manufacturing cells, emphasizing precision automation for aerospace and defense sectors.
  • Overland AI attracted $100 million to enhance autonomous ground vehicles tailored for logistics and defense, reinforcing the importance of robust mobility hardware in mission-critical applications.

• AI Chips and Hardware Innovation:

  • MatX, founded by ex-Google engineers, announced a $500 million round to build large language model (LLM) acceleration chips, signaling a direct challenge to Nvidia’s dominance and a shift toward specialized AI hardware.
  • Positron secured $230 million in Series B to develop energy-efficient inference chips optimized for real-time autonomous operations, highlighting the increasing demand for power-efficient edge hardware.
  • Cerebras Systems and SambaNova secured over $575 million combined ($225M and $350M) to push high-performance, scalable chips aimed at training and inference workloads critical to embodied AI and autonomous systems.
  • Ricursive Intelligence raised $335 million at a $4 billion valuation, focusing on embodied AI hardware capable of complex physical interactions in challenging environments like disaster zones and industrial sites.
  • Taalas, based in Toronto, received $169 million for power-efficient AI chips suited for cost-effective deployment across diverse settings.
  • Vervesemi, a fabless semiconductor startup, obtained $10 million to develop ML-enabled analog chips that support scalable, energy-efficient embedded AI.
  • Freeform, specializing in laser-based chip manufacturing systems, secured $67 million in Series B to enable on-site chip fabrication, directly tackling supply chain vulnerabilities and promoting localized, resilient production.
  • Mirai, founded by creators of Reface and Prisma, raised $10 million to advance on-device AI inference, enhancing privacy, low latency, and energy efficiency—key for smartphones and wearables.

These investments reflect a focused push toward hardware solutions that are power-efficient, scalable, and resilient, ensuring widespread deployment from edge devices to massive data centers.

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Regional and Geopolitical Strategies in Hardware and Compute

Countries worldwide are actively pursuing regional manufacturing capacity and compute infrastructure to secure technological sovereignty and industrial leadership:

• India announced a significant $1.1 billion fund targeted at domestic semiconductor and AI hardware industries, aiming to reduce reliance on foreign supply chains and foster innovation hubs within its borders. This positions India as a key regional player in hardware manufacturing and AI ecosystem development.
• The Qatar Investment Authority (QIA) invested $230 million into U.S.-based AI semiconductor startups, signaling a strategic interest in hardware sovereignty and national security.
• Blackstone led a $1.2 billion investment in Neysa, a Mumbai-based AI data center startup, emphasizing the importance of regional compute infrastructure for autonomous robotics and data sovereignty.
• Qualcomm Ventures committed $150 million to Indian startups focusing on semiconductor design, robotics, automotive, and IoT, further strengthening local manufacturing and supply chain resilience.
• General Catalyst announced a $5 billion investment plan over five years to develop India’s AI and hardware ecosystem, aiming to position the country as a global innovation hub.
• Peak XV (formerly Sequoia India) raised $1.3 billion in a new fund dedicated to supporting local startups and boosting global competitiveness across AI, fintech, and cross-border innovation.

Strategic Regional Engagements & Sustainability

• Nvidia expanded its presence in India through research centers, training programs, and early-stage investments in local startups, embedding itself into the regional innovation fabric.
• Emerald AI, backed by Nvidia and focusing on reducing data-center energy consumption, announced a $50 million funding round to accelerate energy-efficient AI hardware and green AI initiatives.

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Embodied AI and Robotics: From Prototype to Deployment

The rapid evolution of embodied AI and multi-purpose robotics continues, with systems transitioning from research prototypes into full operational deployments—a trend driven by strategic investments emphasizing complex physical interactions, robustness, and industrial readiness:

• Qianjue Tech is deploying autonomous, physically resilient robots across industrial and urban settings, supported by recent investments focused on complex physical tasks.
• Apptronik’s Apollo is approaching widespread deployment, demonstrating versatile robots capable of complex physical interactions in diverse environments.
• Machina Labs advances precision automation for aerospace and defense with hardware-enabled manufacturing cells.
• Overland AI continues expanding its autonomous ground vehicles into logistics and defense, emphasizing robust mobility hardware for high-stakes environments.
• Sitegeist, based in Munich, raised €4 million to automate construction sites with specialized perception hardware.

This swift transition signifies that embodied AI systems are moving rapidly from research prototypes into large-scale industrial deployment, emphasizing resilience, versatility, and scalability.

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Accelerating Technological Breakthroughs

Supporting this momentum are significant technological advances:

• Cerebras and SambaNova are delivering high-performance inference chips that enable massively parallel, energy-efficient processing crucial for real-time decision-making.
• The €52 million Physical AI platform, developed by Emerald and DIC, integrates sensor arrays, perception hardware, and embedded processors, dramatically accelerating embodied AI development.
• Vervesemi’s analog chips aim to reduce energy consumption while providing scaling capabilities for embedded applications.
• Freeform’s laser manufacturing clusters facilitate on-site chip fabrication, directly addressing supply chain vulnerabilities and enabling localized, resilient production.
• Mirai’s focus on on-device inference enhances latency, privacy, and energy efficiency, positioning autonomous physical agents for widespread adoption in consumer and industrial sectors.

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Growing Compute and Infrastructure Investment

The hardware revolution continues to be underpinned by massive compute investments and long-term strategic planning:

• Eon, a cloud infrastructure startup, raised $300 million in a Series D led by Elad Gil, aiming to expand compute capacity and unleash AI data opportunities.
• OpenAI has revised its long-term growth strategy, targeting a $600 billion compute roadmap to support next-generation models and embodied AI systems.
• Device-focused hardware development is gaining momentum, with OpenAI and Ineffable Intelligence reportedly working on advanced inference devices supported by a $1 billion seed round to enable portable, embodied AI hardware.

Recent Major Capital Flows

• Thrive Capital invested $1 billion into OpenAI, valuing it at $285 billion, reflecting mega-capital commitments to device and compute strategies.
• Union.ai raised $38.1 million in Series A to scale AI infrastructure, aiming to streamline deployment and manage complex AI workflows across industrial and embodied AI applications.
• Encord, a startup specializing in physical AI data infrastructure, raised $60 million to accelerate intelligent robot and drone development, emphasizing the importance of robust data pipelines for training and deployment.
• RLWRLD secured $26 million in Seed 2 funding, bringing its total to $41 million to scale industrial robotics AI, focusing on autonomous navigation, manipulation, and complex physical interaction.
• A London-based startup raised $10.25 million in a round aimed at challenging Nvidia in data-center workloads, signaling increased chip competition and innovation in AI infrastructure.

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Implications and Future Outlook

The hardware-first era of AI and robotics is now firmly established, driven by massive investments, regional ambitions, and technological breakthroughs. The ecosystem is evolving towards a more diversified, resilient, and sustainable hardware landscape that integrates centralized compute giants with regional manufacturing hubs and innovative startups challenging incumbent dominance.

Key themes include:

• A broader ecosystem with more entrants developing power-efficient, scalable, and resilient hardware solutions.
• Regional compute and manufacturing initiatives—notably in India, Qatar, and other emerging hubs—aimed at reducing supply chain vulnerabilities and advancing sovereignty.
• An accelerating transition of embodied AI systems from prototypes into deployment, supported by technological advances and strategic funding.
• An increased focus on energy-efficient, localized, and green AI hardware to ensure sustainable growth.

Current Status and Broader Impact

As 2026 progresses, the hardware-first paradigm serves as the foundation for AI's pervasive integration into society and industry. The confluence of mega-capital investments, regional infrastructure pushes, and cutting-edge innovations signals a future where physical AI hardware becomes the core enabler of societal progress, industrial automation, and intelligent systems.

This momentum portends unprecedented societal transformation—from autonomous robots seamlessly collaborating with humans to embodied AI agents operating in complex environments at scale. The hardware ecosystem’s diversification and resilience will be critical in ensuring long-term sustainability, security, and innovation.

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Recent Highlights and Key Data Points

• MatX secures $500 million for LLM acceleration chips.
• Multiple startups collectively attract over $1.1 billion in VC funding within a week—highlighting intense chip competition.
• Neysa reaches unicorn status following $1.2 billion funding.
• Encord raises $60 million to enhance physical-AI data infrastructure for robots and drones.
• RLWRLD raises $26 million to scale industrial robotics AI.
• A London startup raises $10.25 million to challenge Nvidia’s dominance in data-center workloads.
• Thrive Capital’s $1 billion investment into OpenAI underscores ongoing mega-capital commitment.
• Union.ai’s $38.1 million funding aims to scale AI infrastructure and manage complex workflows.

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In Summary

The 2025–2026 period marks a defining moment where hardware and infrastructure are central to AI’s evolution. The confluence of massive capital flows, regional strategies, and technological breakthroughs is creating a more resilient and diversified ecosystem—one that will underpin future societal and industrial innovation. The physical AI hardware revolution is no longer auxiliary; it is the bedrock upon which the future of AI is built, promising transformative societal impacts in the years ahead.