Physical Intelligence in talks for $1 billion funding round

Physical Intelligence, a robotics startup based in San Francisco, is in discussions to raise about $1 billion in new funding, according to Bloomberg. If finalized, the deal would value the company at exceeding $11 billion, effectively doubling its previous valuation of $5.6 billion in just four months. Bloomberg reported that the transaction is still in its early stages and details could change. However, several venture capital firms are already linked to the round. Founders Fund is set to participate, and Lightspeed Venture Partners is in talks to invest. Returning backers Thrive Capital and Lux Capital are also set to participate in the funding round. The involvement of these venture capital firms signals rapid growth in the robotics startup sector.

The capital would support the company’s development of general-purpose AI models, which are AI models designed to perform a wide variety of tasks. During a visit to the company’s headquarters in January, co-founder Sergey Levine summarized the startup’s technology: “Think of it like ChatGPT, but for robots.” At that time, the company had raised just over $1 billion and employed about 80 people. The goal of these models is to develop software that can power robots to execute diverse physical actions, ranging from folding laundry to peeling vegetables.

Despite the potential for a massive valuation and significant capital inflows, Physical Intelligence operates without a set timeline for commercialization. This is an unusual posture for a highly valued startup, but its investors do not seem to mind. Co-founder Lachy Groom explained that the capital requirements for physical AI are virtually open-ended. “There’s no limit to how much money we can really put to work,” Groom said. He further noted that “there’s always more compute you can throw at the problem.” In this context, compute refers to the computing power or resources required for AI training.

Why it matters

The deal would effectively double the company’s $5.6 billion valuation in just four months, signaling rapid growth in the robotics startup sector.