It’s advice we share with every Crowdability member. In fact, it’s one of our “10 Commandments.”
Thou shalt be a follower.
In other words, to reduce your risk and increase your odds of choosing a winning startup investment, follow the professionals — in other words, venture capitalists (VCs) who live and breathe startup investing.
So when these pros start venturing into new territory, we should we follow them!
Let me explain…
Software Companies Were Once Very Appealing
For years, many VCs focused heavily on software companies.
Makes sense. Software is cheap to build. Margins are high. And once the product is created, it can be sold over and over again with little additional cost.
These advantages can quickly turn software startups into valuable businesses.
But now, Artificial Intelligence (AI) is here. Features that once took months to develop can now be created in a flash.
Said Darian Shirazi, a general partner at AI-focused VC-firm Gradient, “You have someone like Anthropic able to create software within seconds.”
As a result, software companies could become disrupted, making the entire sector riskier for investors.
But now, in addition to disrupting an existing sector, AI is creating a new sector…
Let’s Get Physical
You see, AI has started moving into the physical world by incorporating intelligence into robots, autonomous vehicles, medical devices, drones, and other machines.
This is an exciting emerging sector known as Physical AI.
Unlike software, physical AI often relies on patents, manufacturing expertise, and intense engineering development. As such, it’s much harder to replicate.
This explains why so many VCs are backing away from software investments…
And opening their checkbooks for physical AI investments…
Physical AI Funding Soars
According to private-market research company PitchBook, venture investment into physical AI is surging:
As you can see above, global investment went from around a billion dollars in 2016 to $26 billion in 2025. And through the first five months of 2026 alone, funding had already reached $23 billion.
This is a big shift for VCs.
And that means it should be a big shift for us, too…
Why It Pays to Follow the Pros
It makes sense to follow the pros.
For starters, through their access to industry experts, technical advisors, and proprietary research, they can identify emerging trends before others.
Furthermore, startups backed by a venture fund are nearly 64% more likely to raise more money down the road than ones that aren’t. In other words, a startup that’s VC-backed is more likely to survive and thrive.
Even the pros follow the pros! Analysis from PitchBook revealed that the top 20 venture firms in the U.S. collaborate with at least one peer — i.e., another venture firm — nearly 50% of the time.
What’s all this mean for us?
Simple. It’s time, once again, to follow the pros!
The First Opportunity to Address a $50 Trillion Industry
Earlier this year, Nvidia CEO Jensen Huang called physical AI the technology industry’s “first opportunity to address a $50 trillion industry that has largely been void of technology until now.”
That declaration came shortly after Huang — leader of the world’s most valuable company — said that the ChatGPT moment for physical AI is “nearly here.”
That’s why VCs are diving head-first into physical AI.
And that’s why we should follow.
3 Ways to Follow the Pros
Here are three physical-AI startups raising capital right now — along with brief information about the “pros” that are backing them:
RISE is electrifying heavy machinery with its patented Beltdraulic technology — fluid-free electric actuators that are faster, more efficient, and lighter than traditional hydraulics.
This technology is applicable for construction, defense, and materials industries. It’s an example of physical-AI infrastructure, hardware that makes machines smart and AI-ready for industrial tasks.
RISE is backed by Techstars, MIT’s Engine Ventures, and Fortistar Capital. It’s been granted multiple patents and has brought in lifetime revenues of nearly $10 million.
2. SURGE
SURGE builds real-time sensor infrastructure that’s mounted on city light poles and feeds physical-AI systems with anonymous movement, traffic, and condition data. This hardware provides real-world data that makes AI useful for logistics, urban planning, and autonomous systems.
SURGE was selected to be part of Nvidia's Inception program, a top accelerator for tech-focused startups. It’s received an investment from VC Next Wave Partners.
3. LiquidPiston
LiquidPiston develops compact, high-efficiency engines for drones, military systems, and robotics.
One of the biggest bottlenecks for physical AI isn’t intelligence — it’s power. Robots, drones, and autonomous systems all need lightweight, efficiency energy sources. LiquidPiston offers a solution.
LiquidPiston is heavily backed by the U.S. government, along with VCs Adams Capital Management and Northwater Capital. It’s already earned $65 million in contracts with the U.S. Army and Air Force.
Before You Invest
Keep in mind — like all startups, physical-AI startups come with risks.
Building hardware is expensive. And manufacturing delays can cause timelines to get extended.
That’s why I’m not advising that you rush out and blindly invest in these startups. Startup investing requires substantial research and due diligence.
But if you believe in the potential of physical AI — and are excited to follow the pros — these startups are a great place to begin your search.
Happy investing.
Editor
Crowdability.com
