Venture funding for physical AI companies surged to $47.4 billion across 521 deals in the first half of 2026, nearly quadrupling the $12 billion raised in the second half of 2025 and up 80% from the first half of 2025. The total exceeds the $41.9 billion invested during all of 2022–2024 combined. Physical AI encompasses robotics, autonomous vehicles, aerospace, drones, industrial automation, and sensors.

Several megadeals drove the spike. Waymo raised a $16 billion Series D at a $126 billion valuation in February. Anduril Industries secured $5 billion at a $61 billion valuation in May, while Shield AI and Saronic raised $2 billion and $1.75 billion respectively in March.

Exits have been concentrated in aerospace and defense. SpaceX completed a $75 billion IPO at a $1.77 trillion valuation in June. Hawk Eye 360 and Aevex also went public, while Mobileye acquired Mentee Robotics for roughly $900 million.

Investors say falling hardware costs, accessible AI infrastructure, and rising demand in analog industries like manufacturing and utilities are shifting capital toward production-ready companies. Edison Partners and Eclipse Capital emphasize vertical integration and measurable ROI as key value drivers.