Part 1 of our blog post explored the factors that have influenced the robotics and hardware sectors in the past decade. Here we shed light on the future of these industries.

With extensive experience in hardware industry, a keen sense for identifying upcoming trends developed. For example, in 2012-2013, before starting my companies, I invested a portion of my savings in the research of humanoid robots like Roboy and ATOM while the industry was focused on education related robotics startups.

Around 2016, I foresaw the shift to research in the robotics field. Since 2017 I have been investing in private and public hardware companies, recognising their growth potential. In 2022, that phase came to an end, and we are on the cusp of rapid advancements. Although robotics education companies still exist and research is ongoing, they will no longer be the driving force behind the industry’s growth.

Why Now?

One of the major obstacles to the mass adoption of any physical technology is its usability for the general public, which often requires plug-and-play functionality. This is why robotics investing is gaining traction as some investors recognize its potential, also accelerated by ageing population, and COVID-19’s impact on healthcare, logistics, and manufacturing.

Plug-and-Play of Hardware using AI

The human-computer interface (HCI) necessary for robots, IoT, XR devices to interact intuitively with the general public has arrived. Startups with failed business models have left behind remarkable technologies that will find new applications. The necessary research to perfect robot gait/motion, path planning, perception, battery technology, and scalable software solutions is either complete or actively being researched. With proper planning and sufficient capital, it is now possible to build and deploy a fleet of robot MVPs within 6~9 months.

AI and Hardware will continue to act as catalysts for each other, leading to groundbreaking innovations. The true potential of artificial general intelligence (AGI) or its closest approximation will be realised when large models are paired with sensors and actuators, allowed to explore and learn from the environment. For some of my latest predictions in the field, refer to this blog post.

We will witness an increase in XR devices such as the Apple Vision Pro and Nimo Planet or the Monocle. IoT devices will permeate every corner of our homes recording and blending seamlessly with our lifestyle without our need for control, and robots will perform specific tasks in public environments. While many homes may not currently accommodate large humanoid robots like Optimus, Phoenix, Figure, or Ameca, that will soon change with smaller versions of industrial heavy-lifting humanoids leading to mass adoption.

Moreover, manufacturing is experiencing significant improvements thanks to Industrial IoT (IIoT), benefiting all hardware companies in terms of scaling speed.

So the timing for all of it to come together is perfect.

The thing nobody talks about is that in 10 years we'll have a million bipedal robots and in 25 years we'll have a billion. You’ll buy yours for $10k and it will be as important to your life as your smartphone is now

— Vinod Khosla (@vkhosla) June 30, 2023

Empowering Investments in Physical AI

As mentioned in Part 1 – “The necessary exposure to the domain can only come through operational experience or prolonged focused investing.“, as firms with a history of investment in the field are limited, the early stages of startups in this sector require assistance from VCs with operational backgrounds, to establish a solid foundation for future growth.

Seizing the Opportunity: Physical AI has the potential to revolutionise healthcare, manufacturing, transportation, and entertainment. It is time to recognise this exponential growth potential and aim to identify and nurture startups and entrepreneurs who are at the forefront of this technological revolution.

Enabling Technological Advancement: Combining financial resources and strategic guidance can bridge the gap between groundbreaking research and real-world implementation by refining products, failing quickly, expediting market entry for cutting-edge technologies, and scale their operations.

Addressing Challenges: It is necessary to understand the significance of nurturing startups working on solutions with tangible social impact by investing in companies that tackle any of the 6 D’s of automation.

Building a Network of Innovators: A network comprising of diverse entrepreneurs, researchers, and industry experts, fostering collaboration can enable companies to leverage the expertise and experience of seasoned professionals opening doors to new partnerships, mentorship opportunities, and access to a wider ecosystem of resources.

Promoting Economic Growth: Physical AI has the potential to generate substantial economic growth by creating new job opportunities and driving innovation across sectors contributing to fostering prosperity in the regions of investments.

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Conclusion: As we witness the promising rise of Physical AI, its important to support startups and entrepreneurs in these transformative technologies. Operational expertise and networks need to bridge the gap between research and implementation, fostering collaboration and driving economic growth. There is an urgent need to support the growth of promising startups and also play an integral role in shaping the future of these industries.

North American Market Size Growth from 2023 to 2030

By 2030 expected to be 4x~6x of 2023