The new chapter of AI is to secure Physical AI as the next trillion-dollar investment opportunity by moving intelligence beyond the browser and into the physical world.
Physical AI refers to intelligent systems that can sense, reason and act in real-world environments. One way we are seeing early signs of Physical AI in transition is with humanoid robots moving from research labs into commercial environments. Autonomous systems are transforming logistics and manufacturing. AI-powered medical devices are improving patient outcomes. Intelligent mobility platforms are changing how goods and people move.
The shift is occurring because three major technology curves are converging simultaneously.
- AI models are becoming dramatically more capable and are transforming how modern systems interpret the data, and the world, around them.
- Robotics hardware has also advanced significantly, with cheaper sensors, more precise actuators and more powerful computing at the edge, making intelligent machines more practical and scalable.
- Cloud infrastructure and connectivity now allow physical systems to continuously learn, update, and coordinate across large networks.
Together, these forces are creating something fundamentally different from traditional automation: machines and systems that can adapt to dynamic, real-world environments.
AI is Entering the Physical World
Many organizations recognize the potential of Physical AI, but they do not always have the internal capabilities, startup access or investment infrastructure to identify and work with the companies building these technologies. That is why access to the global innovation ecosystem is becoming increasingly important.
This challenge is one of the reasons CYBERDYNE partnered with Pegasus Tech Ventures. Through Pegasus’ global network of startups, investors and corporate partners, as well as our Venture Capital-as-a-Service model, corporations can access promising startups without having to build a full internal venture capital team from scratch. Together, Pegasus and CYBERDYNE launched a $60 million, JPY 10 billion, corporate venture capital fund to invest in startups developing technologies across robotics, Physical AI, healthcare, automation, and intelligent systems.
As the pioneer in Cybernics, CYBERDYNE has a distinct vision for this partnership. The fund has a particular focus on advancing CYBERDYNE’s vision for HCPS Cybernics with Physical AI, fusing humans, AI-powered robotics and information systems across the Human-Cyber-Physical Space. This vision is reflected in CYBERDYNE’s flagship product, a world-first wearable cyborg device, HAL®, which is designed to assist, enhance, improveand regenerate human physical functions by detecting and responding to bioelectric signals from the wearer.
What attracted us to this partnership was not only the market opportunity, but the vision behind it.
Through this partnership, CYBERDYNE can accelerate technology development, business creation and global expansion by collaborating with startups and innovation ecosystems worldwide. It also creates an opportunity to address major societal challenges, including aging populations, workforce shortages and increasing healthcare demands.
For years, the technology industry has focused on replacing manual processes with digital workflows. The next frontier is creating intelligent systems that work alongside people, enhancing human capability rather than simply digitizing information.
The Next Investment Bet is on Physical AI
Historically, venture capital has favored software because software scales efficiently. Physical systems were often viewed as capital-intensive and operationally complex. As AI becomes embedded within robotics and intelligent machines, entirely new categories of scalable businesses are emerging. The result is a growing convergence between software economics and physical-world applications. Which is why the winners of the next decade may not simply be the companies with the most powerful AI models but the companies that best apply intelligence to the physical world.
Through our partnership with CYBERDYNE we will continue to explore those innovative startups that are transforming the Physical AI ecosystem. Outside of this partnership, we have already begun our exploration in this space, exemplified by our investments in; Figure AI, the AI robotics company is building the world’s first commercially viable autonomous humanoid robot; and Mujin, developer of an intelligent robot control systems that automate manufacturing and logistics tasks to improve the efficiency and cost-effectiveness of industrial and collaborative robots.
As investors, we spend our time searching for technology shifts before they become obvious. Physical AI is beginning to look like an evolution that mirrors previous technology revolutions – the internet connected information, mobile phones connected people, and the cloud connected businesses.
The Next Decade
Physical AI is emerging as the next major technology revolution. The implications are far-reaching, with the potential to improve productivity, address labor shortages, enhance healthcare outcomes, and create entirely new business models across the global economy. For organizations, the opportunity extends beyond simply adopting new technologies, but requires actively engaging with the innovation ecosystem that is shaping the future of Physical AI.
The Physical AI era is now, and organizations that act today will be better equipped to remain competitive and capitalize on the advancements that will shape our future.
