Physical AI Funding: A Quarter-by-Quarter Analysis

All funding deals in the Physical AI Market over the last years

Below is the table listing all the deals. You can find our methodology at the end of this page.

If you want a deeper understanding of the market and its current dynamics, get our report covering the Physical AI Market.

Is Physical AI funding still growing in 2026?

Physical AI funding has grown enormously in dollar terms, but the number of startups raising money is now falling after a brief surge in early 2026.

We tracked 183 distinct financings across five completed quarters, from Q3 2025 through Q3 2026. Deal volume increased from 28 to 32, then 37 and 55, before dropping to 31 in Q3 2026. The market nearly doubled its quarterly activity before losing much of that progress.

Capital followed a very different path. Funding jumped to $27.56 billion in Q1 2026, mainly because of exceptionally large investments in companies such as Waymo, Shield AI and Skild AI. Q2 brought in considerably less money, at $11.25 billion, despite attracting more companies.

The latest quarter looks weaker on both measures. Deals declined 44% from Q2, while recorded capital fell to at least $3.61 billion. Four transactions had undisclosed amounts, so the precise funding decline cannot be established.

For now, the Physical AI market is still capable of producing extraordinary financings, but the broader increase in startup activity has stalled.

Quarter	Deals	Funded companies	Capital raised	Median round
Q3 2025	28	28	$2.43B	~$50M
Q4 2025	32	32	$2.57B	$34.5M
Q1 2026	37	36	$27.56B	$120M
Q2 2026	55	55	$11.25B	$38M
Q3 2026	31	31	≥$3.61B	$32M
Q3 '25 → Q2 '26	+96%	+96%	+363%	~−24%
Q2 → Q3 '26	−44%	−44%	~−68%*	−16%

*The capital change compares recorded amounts; Q3 includes four transactions with undisclosed values.

Why did Physical AI funding suddenly explode in Q1 2026?

Physical AI funding exploded in Q1 2026 because investors poured billions into a handful of established autonomy and robotics companies preparing to scale.

Funding increased from $2.57 billion in Q4 2025 to $27.56 billion in Q1 2026, a 972% jump. Yet deal volume rose by just five transactions, from 32 to 37.

Waymo was the biggest reason. On February 2, 2026, the company announced a $16 billion financing at a $126 billion post-money valuation. It also reported more than 400,000 weekly rides and plans to expand into over 20 additional cities during 2026, including Tokyo and London.

Waymo was raising money to expand an operating robotaxi business, with vehicles, employees, infrastructure and new markets requiring substantial capital.

Other companies followed different paths to large financings. Wayve announced $1.2 billion in Series D funding in February, with additional milestone-based commitments supporting its autonomous-driving rollout. Skild AI raised $1.4 billion in January to develop general-purpose robotics intelligence. Shield AI announced a $2 billion strategic financing package in March, linked partly to its acquisition of simulation specialist Aechelon Technology.

But the boom barely reached smaller deals. Capital raised through rounds of $50 million or less declined from $428 million in Q4 to $232 million in Q1.

The record funding quarter was heavily influenced by companies with enough commercial progress, technology or strategic importance to justify enormous investments. For smaller startups, the funding environment was considerably less impressive.

Was Q2 2026 actually the best quarter for Physical AI startups?

Q2 2026 was the strongest quarter for Physical AI startup funding breadth, even though investors committed 59% less recorded capital than in Q1.

The number of financed companies increased from 36 to 55. At the same time, capital from rounds of $50 million or less more than doubled, reaching $478 million.

A large part of the increase came from drones and mobile autonomy, where transactions jumped from eight to 26. Industrial and warehouse robotics remained active with ten financings, while Europe recorded 20 transactions compared with eight in Q1.

More businesses raised money across several categories and regions, rather than a handful of companies determining almost the entire funding picture.

The deal-size distribution confirms the difference. The median financing fell from $120 million in Q1 to $38 million in Q2, even as the number of companies receiving investment increased substantially.

There was still plenty of concentration. Anduril raised $5 billion in May, accounting for nearly 45% of the quarter's capital. However, the increase in activity extended well beyond that transaction.

Q2 remains the clearest example of funding becoming more widely available across Physical AI. The subsequent decline in Q3 shows how short that window turned out to be.

Are smaller Physical AI startups getting squeezed out?

Smaller Physical AI startups are still raising money, but financing below $50 million has failed to build lasting momentum.

In Q3 2025, rounds of $50 million or less accounted for approximately $302 million. That increased to $428 million in Q4 before falling to $232 million during Q1's extraordinary funding boom.

The smaller-round market recovered strongly in Q2. Transactions between $5 million and $50 million increased from ten to 25, helping push total capital in rounds at or below $50 million to $478 million.

That recovery did not last. Q3 recorded $241 million, approximately half the previous quarter's amount.

The contrast with larger financings is striking. In Q1, rounds above $50 million represented more than 99% of total recorded investment. Even in Q3, when the market was quieter, they still accounted for more than 93%.

Those figures suggest that investors have been far more consistent in financing selected large companies than in supporting a steadily expanding population of smaller robotics and autonomy businesses.

For founders looking to raise $10 million, $20 million or $30 million, billion-dollar headline investments offer limited evidence that their own fundraising conditions have improved.

Is Physical AI becoming a market where only a few companies get the money?

Physical AI funding is highly concentrated, and that concentration has remained persistent despite changes in which companies lead each quarter.

In Q3 2025, the three largest financings accounted for approximately 52% of recorded capital. Their share was 48% in Q4, then surged to roughly 70% in Q1 2026.

Concentration eased during Q2's broader funding expansion, but the top three rounds still accounted for 62% of capital. In Q3, their share increased again to approximately 66%.

The companies responsible changed significantly. Figure AI influenced the Q3 2025 picture, Waymo dominated Q1 2026, Anduril led Q2, and Quantum Systems became the largest financing in Q3.

Quantum Systems announced its $1.2 billion Series D in July 2026, led by Blackstone, Noteus, Airbus and Advent. The company linked the financing to expanding autonomous systems across air, land and sea, supported by existing revenue and industrial-scale ambitions.

Hardware-intensive businesses can require huge amounts of capital for production, computing infrastructure and deployment. Some concentration is inevitable.

What stands out is how consistently a handful of transactions determines the majority of funding, even when dozens of other companies complete rounds.

Why did Physical AI funding fall so sharply in Q3 2026?

Physical AI funding fell sharply in Q3 2026 as the previous quarter's expansion in startup activity reversed across several categories and regions.

Transactions declined from 55 to 31, and the drop extended beyond the largest rounds. Smaller-round capital decreased by approximately 50%, while the number of financings above $50 million fell from 26 to eleven.

Drones and mobile autonomy experienced the biggest category reversal, falling from 26 transactions to seven. North American activity declined from 27 to seven deals, and Europe dropped from 20 to seven.

The market still produced large investments. Quantum Systems announced its $1.2 billion financing in July, while XPENG Robotics announced more than $900 million in August to support humanoid production and Physical AI development.

These large rounds kept substantial amounts of capital flowing into selected companies, even as the number of financed businesses fell.

The decline also needs to be understood against Q2's unusually strong activity. Q3's 31 transactions were close to the 28 and 32 recorded in the second half of 2025.

Q2 now looks increasingly like an exceptional financing window. The latest quarter brought activity back toward earlier levels, although the decrease in smaller-round funding suggests weakness beneath the headline totals.

Is drone funding becoming the biggest part of Physical AI?

Drone and mobile autonomy funding briefly took over Physical AI deal activity in Q2 2026, but the boom faded almost immediately.

The category recorded eight financings in Q1, jumped to 26 in Q2 and returned to seven in Q3. At its peak, drones and mobile autonomy represented 47% of all quarterly Physical AI transactions.

Capital also surged. The category attracted approximately $7 billion in Q2, compared with $4.81 billion in Q1. Anduril's $5 billion financing explains much of the dollar total, but the increase in deal count shows that investor activity had spread to many more businesses.

Governments have been paying greater attention to autonomous defense capabilities, while companies are developing systems for reconnaissance, interception, maritime operations and other missions.

Anduril's May 2026 production agreement for the Barracuda-500M, covering a minimum of 3,000 systems over three years, illustrates the move toward larger manufacturing programs. Quantum Systems' expansion across multiple autonomous platforms provides another example of suppliers building broader capabilities for defense customers.

Still, the quarterly figures show that the funding surge was concentrated in Q2. Investors remain willing to back major drone companies, but the number of businesses receiving financing has not continued increasing.

For now, drones are an important destination for large investments rather than a category with proven, uninterrupted growth in funded startups.

Are humanoid robotics startups attracting more money now?

Humanoid robotics is attracting serious capital, and its deal activity recovered in Q3 2026 while the rest of Physical AI slowed.

The category recorded six financings in Q1, four in Q2 and eight in Q3. Its latest quarterly funding reached approximately $1.53 billion, making humanoids one of the strongest parts of the market during the broader downturn.

The investment history shows how large this category has become. Figure AI announced more than $1 billion in Series C commitments in September 2025 at a $39 billion post-money valuation, with plans to scale its Helix AI platform and BotQ manufacturing operations.

Figure's financing was also tied to real-world expansion. Its partnership with Brookfield, announced the following day, aimed to support robotics deployment and the collection of large-scale training data.

XPENG Robotics added another major development in August 2026. The company announced more than $900 million in investment at a valuation exceeding $6.3 billion. IDG Capital led the financing, with Tencent and Alibaba among the strategic participants.

XPENG specifically linked the money to humanoid mass production and improvements to its Physical AI models.

The category's Q3 recovery is encouraging because deal count doubled despite the wider slowdown. Its capital remains concentrated around unusually large transactions, though, and the latest increase has lasted only one quarter.

Which Physical AI sector is getting funded most consistently?

Industrial and warehouse robotics currently has the most reliable funding activity among the major Physical AI categories.

Since Q4 2025, the category has recorded nine, eleven, ten and eight transactions per quarter. Other segments experienced much larger swings, but industrial robotics maintained a fairly steady flow of financed companies.

Drone financings jumped to 26 before returning to seven. Humanoid robotics declined to four deals before recovering to eight. Autonomous vehicles produced an enormous capital spike in Q1 but recorded no deals in Q3.

Industrial robotics held up through each of those changes.

The category also has a relatively direct commercial path. Manufacturers and warehouse operators can evaluate robotic systems through productivity, reliability, operating costs and completed tasks.

RobCo, for example, focuses on industrial automation, where deployments and customer relationships provide investors with more tangible evidence of demand than a future promise of general-purpose autonomy.

That commercial connection does not guarantee stable funding amounts. Industrial robotics capital declined from approximately $1.11 billion in Q1 to $392 million in Q3.

Nevertheless, investors have continued financing industrial robotics companies through very different quarterly market conditions.

Physical AI category	Q3 '25	Q4 '25	Q1 '26	Q2 '26	Q3 '26
Drones & mobile autonomy	6	8	8	26	7
Humanoid robotics	6	7	6	4	8
Industrial & warehouse robotics	4	9	11	10	8
Robotics foundation models	7	5	4	3	5
Autonomous vehicles	2	0	5	4	0
Physical AI control software	3	2	3	7	1
Simulation & synthetic data	0	1	0	1	2
Total	28	32	37	55	31

Are investors betting billions on robotics AI models before they have many customers?

Robotics foundation-model companies are attracting very large investments despite a relatively small number of financing transactions, reflecting strong interest in software that could control many different types of robots.

The category raised approximately $2.02 billion across four deals in Q1 2026. Skild AI's $1.4 billion Series C, announced in January, accounted for most of that amount.

Skild is developing a general-purpose robotics intelligence system intended to work across different machines and tasks. The financing attracted SoftBank, NVIDIA's NVentures and several other financial and strategic investors.

Physical Intelligence provides another example of the industry's direction. Its research on general-purpose robot models, including π0 and subsequent vision-language-action systems, demonstrates the effort to make robotics intelligence more transferable between machines, environments and tasks.

The business opportunity is substantial if developers can reuse the same underlying AI across industrial robots, mobile platforms and humanoid machines.

But the funding figures also show how selective investors have become. Robotics foundation-model deal counts declined from seven in Q3 2025 to five in Q4, four in Q1 2026 and three in Q2, before recovering to five in Q3.

The money is currently concentrated around a limited group of companies pursuing ambitious general-purpose systems. Their financing success does not demonstrate that a large population of robotics AI startups is gaining access to similar capital.

Are autonomous-driving companies still attracting big investments?

Autonomous-driving companies can still raise exceptional amounts, but their funding activity has become highly irregular.

Q1 2026 was extraordinary. Five autonomous-vehicle financings generated approximately $18.15 billion, representing nearly two-thirds of all Physical AI capital raised during the quarter.

Waymo's $16 billion round dominated that figure. Wayve also secured substantial funding, with a $1.2 billion Series D and additional milestone-based capital aimed at bringing its autonomy software into commercial deployment.

Wayve's financing included support from Microsoft, NVIDIA, Uber and major automakers. In April 2026, AMD, Arm and Qualcomm Ventures announced a further $60 million extension, showing how suppliers of computing and automotive technology were participating in the company's expansion.

By Q2, autonomous-vehicle financing in our dataset had fallen to $260 million. Q3 recorded no transactions in the category.

That decline tells us more about the timing of capital raises than about the commercial prospects of autonomous driving.

Waymo was expanding an operating robotaxi service, while Wayve was preparing deployments with automotive and mobility partners. Both developments indicate that investors are financing companies approaching or already operating at commercial scale.

A few enormous rounds can make the whole sector appear to accelerate or collapse within months, even when the underlying businesses are progressing on much longer timelines.

Are Physical AI investors losing interest in early-stage startups?

Early-stage Physical AI startups have not lost investor attention, but their share of funding changed dramatically as larger companies raised enormous amounts in early 2026.

Early-stage deals represented approximately 61% of transactions in Q3 2025 and 56% in Q4. Their share fell to 41% in Q1 2026, when later-stage financings became the majority.

The dollar imbalance was especially large. Q1 recorded approximately $25.76 billion in later-stage capital, compared with $1.80 billion at earlier stages.

Q2 produced a more balanced mix, with 23 early-stage deals and 22 later-stage transactions. Ten additional financings had unknown stages.

Then Q3 moved sharply toward younger funding stages. Early-stage deals represented 21 of 31 transactions, or nearly 68%.

That latest increase should be interpreted alongside the overall funding decline. There were fewer financings in Q3, and the market recorded only five later-stage deals, down from 22 in Q2.

Investors appear to be moving between different types of companies rather than steadily abandoning early-stage investment.

We also examined founding dates. The median known company age declined from nine years in Q1 to two in Q3, but founding-year coverage was only around half of transactions in both quarters. That prevents a firm conclusion that the entire funding market is shifting toward younger businesses.

Are newly founded Physical AI startups getting funded, or is the money going to existing companies?

Physical AI financing still overwhelmingly favors companies that have raised money before, and new-company funding has struggled to keep pace.

First-financing counts were seven in Q3 2025, five in Q4, six in Q1 2026 and seven in Q2. Over the same period, total quarterly deals increased from 28 to 55.

The additional funding activity therefore came mainly from follow-on rounds.

In Q2, only 13% of transactions were classified as first financings, the lowest share in the five-quarter period. Follow-ons represented 87% of deals and accounted for approximately $11.14 billion in capital.

Q3 brought a noticeable change. Nine first financings represented 29% of recorded transactions, the highest proportion during the period.

However, the classification needs care. XPENG Robotics' large financing was recorded as a first round, even though its robotics business is part of an established automotive technology group.

A first financing in a private-company database can involve a corporate subsidiary, a recently separated business or a company whose earlier funding history is difficult to reconstruct.

The evidence still points clearly toward follow-on dominance. The latest recovery in first-financing share is worth watching, although we cannot yet treat it as proof of a new wave of startup creation.

Is Asia-Pacific overtaking the US in Physical AI funding?

Asia-Pacific overtook North America in Physical AI deal count during Q3 2026, but North America remains the stronger funding center across the full period.

North American companies recorded 19 transactions in Q1 and 27 in Q2. Capital reached approximately $24.89 billion and $7.69 billion respectively, supported by major autonomous-driving and defense-technology financings.

Europe also had a strong Q2, increasing from eight transactions to 20. Its recorded capital grew from $1.62 billion to approximately $2.50 billion.

Q3 changed the geographic balance. North American and European deal counts both fell to seven, while Asia-Pacific increased from eight transactions to 17.

That gave Asia-Pacific approximately 55% of all recorded Physical AI financings during the latest quarter.

The region's $1.45 billion in reported capital included XPENG Robotics' major financing. Several additional Asian transactions lacked disclosed amounts, making the total a conservative measure of the region's activity.

The reversal is particularly interesting because it happened while overall Physical AI financing contracted. Asia-Pacific gained activity when North America and Europe lost it.

For now, this represents a clear shift in the latest quarter rather than a lasting transfer of funding leadership. North America's earlier capital totals were much larger, while Asia-Pacific has yet to demonstrate several consecutive quarters of leading deal activity.

Are the same venture capital firms controlling Physical AI funding?

Physical AI funding still involves a broad range of lead investors, and we found little evidence that a small group of venture firms is steadily taking control.

The number of transactions with disclosed leads increased from 24 in Q3 2025 to 28 in Q4 and 28 in Q1 2026. It then reached 43 in Q2 before declining to 27 in Q3.

Several established firms appeared repeatedly, including Eclipse, Khosla Ventures, Andreessen Horowitz and IDG Capital. However, most named leads appeared only once within individual quarters.

The financing of leading Physical AI companies also shows how varied these investor groups can be. Waymo's $16 billion round was led by Dragoneer, DST Global and Sequoia Capital. Skild AI's Series C was led by SoftBank. Quantum Systems' $1.2 billion transaction was co-led by Blackstone, Noteus, Airbus and Advent.

Strategic investors are also involved, although their participation has not followed a consistently rising pattern. The recorded share of transactions involving strategic investors ranged from approximately 35% to 54% across the five quarters.

NVIDIA and Uber's involvement in autonomous-driving companies and Tencent and Alibaba's participation in XPENG Robotics illustrate why corporate investors are interested in the market. Physical AI connects directly to computing infrastructure, manufacturing, transportation and industrial technology.

The available records show continued participation by major investors and a wider set of disclosed financing syndicates during Q2. They do not demonstrate that lead-investor control is becoming more concentrated over time.

Is the Physical AI funding slowdown a temporary dip or the start of a bigger problem?

The Physical AI funding slowdown is currently a serious reversal in deal activity, but the evidence is too mixed to call it the beginning of a prolonged downturn.

Some apparent growth trends were short-lived. Autonomous vehicles produced an exceptional Q1 capital peak driven by Waymo. Drones and mobile autonomy then enjoyed a sharp Q2 increase in deal count before returning to earlier activity levels.

The latest quarter offers a different mix. Humanoid robotics recovered to eight deals, Asia-Pacific became the largest region by transaction count, and first-financing share increased. At the same time, total transactions and smaller-round capital declined substantially.

The market also contains companies with growing commercial ambitions. Waymo's robotaxi expansion, Figure's production plans, Skild AI's robotics models and Quantum Systems' industrial-scale autonomy programs help explain why investors continue committing large amounts.

What is missing is a steady increase in the number of businesses able to raise capital every quarter.

If funding breadth recovers without another wave of extraordinary billion-dollar transactions, the market could establish a more sustainable growth cycle. Until then, financing conditions remain much stronger for selected leaders than for the wider startup population.

What is the Physical AI funding trend actually telling us?

Physical AI funding has become much bigger, but the market is still struggling to turn that financial capacity into consistent growth across the wider startup ecosystem.

Waymo, Anduril, Skild AI, Figure AI and Quantum Systems show how large financing commitments have become. Investors are increasingly willing to support expensive robotics, autonomy and AI development programs, particularly when companies have credible technology or commercial expansion plans.

Q2 was the strongest quarter for startup funding breadth. It financed substantially more businesses across drones, industrial robotics and multiple regions, even though it attracted far less capital than Q1.

Exceptional transactions still account for most recorded investment. As seen above, smaller-round financing followed its own path and declined substantially after its Q2 peak.

Industrial and warehouse robotics maintained relatively steady deal counts through multiple market shifts. Drones, humanoids and autonomous vehicles produced larger quarterly changes, but their funding activity was less consistent.

Existing funded companies remain the main beneficiaries of investment. Follow-on rounds dominated throughout the period, while the recent increase in first financings partly reflects a mix of genuinely younger businesses and established corporate operations.

The geographic picture is also changing. Europe's Q2 expansion and Asia-Pacific's Q3 leadership show how quickly funding activity can move between regions, although neither shift has yet become a sustained trend.

The next important development will be whether Physical AI can support more companies raising ordinary venture rounds. A recovery in first financings, $5 million–$50 million rounds and steady category-level activity would provide much stronger evidence that the market is entering a lasting expansion.