AI is Coming for the Real World

The biggest Seed round so far in 2024 is in AI-powered robotics. Physical Intelligence is building foundation models to “control any robot for any task.” Thrive Capital, Khosla, Sequoia, and OpenAI gave them $70 million to do so.

AI-powered robotics is gaining serious interest from Silicon Valley with technological advances coming quickly. Check out this demo that Figure AI released in March. Very worth the 2:34 run-time if you’re interested in seeing how creepy humanoid robots are becoming.

Figure is just one of the players in the AI-powered robotics category. You may have heard of others: Boston Dynamics, Tesla, 1x Technologies, Agility Robotics, the list goes on.

The market almost feels crowded with fundings at this point:

• Figure AI: $675M Series B from OpenAI, Microsoft, Nvidia, Bezos Expeditions in February 2024

• 1x Technologies: $100M Series B from EQT, OpenAI, Tiger Global in January 2024

• Archetype AI: $13M Seed from Venrock and Amazon in April 2024

So where does Physical Intelligence fit in and why are OpenAI and top investors taking such a big bet on them?

Let’s dig in.

Company Overview

Physical Intelligence is building “a universal model that can power any robot or any physical device basically for any application.” The company catapulted out of stealth with $70 million of Seed capital from Thrive Capital, Sequoia, Khosla, Lux, and OpenAI, immediately becoming the most interesting company to watch this year.

Physical Intelligence (or Pi) is led by CEO Karol Hausman who previously worked on robotics at Google Brain. He teamed up with a host of robotics experts and scientists from AI bastions including Google, Stanford, Anduril, and Stripe.

Problem & Solution

AI’s use cases have largely been confined to software: writing code, generating documents, etc. Robotics companies are only just starting to tap the vein of AI computing, notably with folks like Figure AI. And most are building integrated hardware and software. No providers are currently offering AI models to purpose-built for robotics in a B2B fashion (perhaps excluding OpenAI).

Enter: Physical Intelligence. Pi is building foundation models to power to any robot for any task. The company’s models will be sold to robotics companies to power their bots, allowing them to focus on the hardware.

Differentiation

Pi can achieve a defensible moat through 1) its B2B approach to robotics AI models and 2) solving the difficult problems with robotics AI, not least of which is amassing high-quality robot data.

1) B2B robotics AI models

AI-powered robot manufacturers up until now have built both the software and hardware for the robots. Figure, for example built the neural networks to power its robots actions. They do use OpenAI for visual and language intelligence but these are not robot-specific capabilities.

Pi is differentiated because they are the first to sell, in a B2B fashion, AI models that can power robots.

2) Hard robot AI problems

The other differentiating aspect to Pi is that there are many unsolved challenges in building AI for robots. Chelsea Finn, Pi team member, notes some of these challenges:

• Internet-scale robot data

• Model and algorithm advances

Robot data simply doesn’t exist at a large scale.

CEO Karol Hausman also emphasized their goal:

“We'll focus on collecting robot data at a scale never seen before, making algorithmic advancements, training very large models and whatever else is needed to bring AI into the physical world.”

Needless to say, Pi will develop massive differentiation if they accomplish their mission.

Conclusion

Pi is bringing AI to the physical world with universal models that can power and robot for any application. The company will need to overcome significant challenges, not least of which is gathering robust robotics data to train its models. What is clear is that this team is A+ and some of the best investors are buying the story. With the market turmoil over the past few years, it’s fun to see Silicon Valley returning to its roots: backing exceptional teams with huge dreams.