Robotics Startup Discusses $2 Billion Valuation Months After Founding
The Takeaway
• Physical Intelligence, or Pi, has pitched investors on new funding round
• Investors are expected to value the company at around $2 billion
• OpenAI has backed robotics startups but also rebooted its own efforts
The race to develop physical robots powered by artificial intelligence is on again, despite the industry’s track record of failures—and the threat that OpenAI, which has dominated advances in conversational AI, will become a bigger rival.
Physical Intelligence, a startup developing software for robots that could work in a range of industries, has told investors it wants to raise $300 million at a valuation around $2 billion, according to two people with direct knowledge of the talks. The San Francisco company, which hasn’t unveiled its first product yet, has told investors it’s received several offers, according to one of those people.
The financing discussion comes just eight months after its incorporation in Delaware and seven months after it raised $70 million at a valuation of about $400 million from investors including Khosla Ventures, Lux Capital, Sequoia Capital, Thrive Capital and OpenAI. A spokesperson for Physical Intelligence declined to comment.
The startup, which also goes by the name Pi, after the mathematical constant, is developing software that helps robots perform complex tasks requiring the ability to manipulate objects precisely—folding clothes, for instance. It was founded by Google DeepMind researcher Karol Hausman, the startup’s CEO, as well as computer science professor Sergey Levine; professor and former Google AI researcher Chelsea Finn; and venture capitalist Lachy Groom.
Investors have flocked to robotics startups in the last year as founders, often hailing from big technology companies or prestigious academic institutions, have harnessed advances in generative AI that improve computers’ ability to learn complex behaviors. One of these technologies, known as diffusion, can help robots more effectively mimic human behavior, such as manipulating objects or navigating the real world.
In February, Figure, which is developing humanoid robots, raised $675 million at a $2.6 billion valuation. Then in May, Cruise co-founder Kyle Vogt raised $150 million for The Bot Co., which plans to develop robots that can complete household chores. And in July, Skild, a rival to Pi that is developing software to power robots with two to four legs, raised $300 million at a $1.5 billion valuation
These startups and their investors are hoping to overcome a range of obstacles—including potential competition from OpenAI. In March, the ChatGPT developer rebooted its robotics software team after shutting it down four years prior. It could eventually compete with Pi, Figure and humanoid robotics maker 1X Technologies, despite the fact that it has financially backed all three, and at least Figure and 1X use OpenAI models.
The robotics field is also littered with disappointments. Among the most well-known flubs, SoftBank three years ago ceased production of Pepper, a humanoid robot that the Japanese tech conglomerate had envisioned as a replacement for human workers. Last year, Zume, which raised $375 million from SoftBank to automate pizza-making with robots, shut down. And Alphabet last year shut down a subsidiary developing mobile robots that aimed to clean surfaces or help with other domestic tasks.
Covariant, Standard Bots
More recently, startups that developed software based on an earlier computer vision technology have given up their independence.
In August, Amazon hired the founders and a quarter of the team behind industrial robotics company Covariant and licensed the startup’s models for at least $500 million, according to a person with knowledge of the transaction. That’s less than the company’s 2023 valuation of $625 million, according to PitchBook. Covariant was founded in 2017 to create computer vision software to help robots identify objects and perform specific tasks.
Ready Robotics, an eight-year-old startup that raised over $40 million from investors including Drive Capital and Rockwell Automation to build software for controlling robots, shut down this summer.
Standard Bots, which makes robotics arms, bought Ready’s patents, trademarks, customer lists and software, according to Standard Bots CEO Evan Beard, who declined to disclose the price. Ready Robotics CEO Benjamin Gibbs didn’t immediately respond to a request for comment.
“It’s increasingly hard to start a new LLM company right now,” Beard said. “Knowing that, people are turning their focus to robotics…placing bets quickly and trying to choose the winners quickly.”
Details of the Covariant and Ready Robotics sales haven’t been previously reported.