I’ve received a ton of emails from readers with strong opinions about whether they’d allow a humanoid robot in their homes.
For example, Lisa F. says: “I will own one as soon as I can!! I have gift boxes to make up and I need help.”
But Billy B. is less enthusiastic about the idea. He says: “I would never trust a robot in my home until the logistics are complete where a robot could be trusted 100% of the time as a human with above average intelligence and thought processes.”
Billy’s comments tie back to what I believe could be the missing link that triggers a robotics boom.
The brain.
More specifically, a new generation of AI models that could finally allow robots to operate in messy, unpredictable environments.
That alone is a huge development.
But what if this breakthrough doesn’t just change what robots can do?
What if it changes where the biggest fortunes in robotics get made?
Because most investors today are focused on the robots themselves, like Tesla’s Optimus…
Image: Tesla
Figure’s 03 robot…
Image: Figure
And Boston Dynamics’ Atlas.
Image: Boston Dynamics
But what if the companies building these machines matter less than the ones building the systems those machines depend on?
Brain Power
If the intelligence inside robots ends up being the most important part, then the biggest opportunity in robotics might not be in the companies building their bodies.
It could be in the ones building their brains.
If you go back to the personal computer boom, a lot of investors assumed that the big winners would be the companies making the machines themselves. And for a while, that looked like the correct assumption. Companies like Compaq, Dell and Gateway were big winners during the earlier stage of the boom.
But over time, an enormous amount of value concentrated elsewhere.
Specifically, it concentrated in Microsoft.
That’s because Microsoft owned the operating system those computers ran on.
Windows.
And once it became the standard across the entire ecosystem, that’s where most of the money was made.
Something very similar happened with smartphones.
There was fierce competition among hardware manufacturers, and plenty of companies made good devices. But as that market matured, it became clear that the companies controlling the software ecosystems running those phones had a very different kind of leverage.
Apple and Google didn’t just participate in the smartphone market.
In many ways, they defined it.
Image: Apple
That’s why I keep coming back to whether robotics is setting up in a similar way.
Here’s my thinking.
According to the International Federation of Robotics, there are now roughly 4.7 million industrial robots operating in factories worldwide.
In 2024 alone, manufacturers installed about 542,000 new robots globally, marking the fourth straight year installations topped half a million.
So widespread automation isn’t some future story. It’s already here.
But most of those machines are specialists. They’re designed to do narrow tasks in controlled environments like welding, sorting, painting and moving materials.
But this new generation of robot “brains” could be what finally allows robots to move from following instructions to reasoning through tasks.
Vision-language-action models are designed to move beyond fixed automation, giving robots the ability to interpret situations, generalize across tasks and respond in real time instead of simply following pre-programmed instructions.
That’s a big leap.
If those models become a standard intelligence layer in robotics — like Windows became for personal computers — then robotics could become more of a platform story than a hardware story.
And that creates a very different investment setup.
Historically, when technology markets move toward platform models, the real money often ends up in places investors didn’t expect at the outset.
In this case, the companies supplying the intelligence those robots depend on.
One clue to where this might be heading is to look where serious money is already flowing.
Physical Intelligence — founded by researchers from OpenAI, Google and DeepMind — raised roughly $400 million almost immediately after launch. The company recently began a new funding round to raise $1 billion, which would push its valuation to $11 billion.
That’s remarkable for a company focused on the brains, not the machines.
Here’s My Take
Venture funding into embodied AI and robotics has surged over the last 18 months.
In 2025, robotics funding totaled nearly $14 billion, a 70% increase over 2024.
And a lot of capital is chasing what’s going on under the hood.
Nvidia (Nasdaq: NVDA) might be the clearest example of this. Its Isaac robotics software stack, Omniverse simulation platform and now GR00T — a generalist humanoid foundation model — are all meant to help build the infrastructure for intelligent machines.
To me, they’re a sign that Nvidia is making a platform bet. And the company has already hinted at the scale it sees.
At the NVIDIA GTC 2026 conference, Jensen Huang said: “Physical AI has arrived — every industrial company will become a robotics company.”
Huang projects physical AI — AI that understands physical laws, including robotics — as a $50 trillion market.
And Morgan Stanley estimates there could be one billion humanoids in use by 2050, representing as much as $5 trillion in value.
Even if those estimates prove aggressive, they represent an enormous amount of humanoid robots in our future.
And when millions of robots can run on a “universal brain”…
Whoever owns it could sit on one of the largest software opportunities industrial markets have ever produced.
Regards,
Ian KingChief Strategist, Banyan Hill Publishing
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