Investment in AI robotics: A bubble set to burst?

AI and robots. Image by Tim Sandle

The latest investment data shows that investor interest in humanoid robotics is accelerating rapidly within the broader AI market. According to some venture capitalists, however, much of this momentum is being driven by hype rather than commercial readiness, raising concerns that humanoid robotics could become AI’s next bubble.

Recent major venture capital reports from KPMG and PitchBook demonstrate that AI remains in the lead, accounting for more than half of all investments this year. In addition, data from CB Insights shows that investors’ attention inside the AI market is shifting rapidly toward industrial humanoid robotics.

Is the AI-robotic bubble set to burst?

As a result, investors indicate that the flood of AI capital is pushing robotics toward a speculative zone, with potentially too many start-ups promising breakthroughs without commercial evidence.

The reports also show that, in the last quarter, industrial humanoid robotics captured 17 deals – the most of any category. AI was still the primary destination for investors, split into several categories, such as coding AI agents and co-pilots (14 deals), end-to-end software development AI agents (12), and others.

Rapid growth of the sector has already sparked fears of a bubble from the Chinese leading economic planning industry, which said that the humanoid robotics industry needs to “balance the speed against the risks of bubbles,” Bloomberg reports.

Why the interest?

Investors’ appetite for humanoid robots is largely driven by AI, since AI gives humanoids a commercial potential that was previously not possible.

What is the risk?

According to Daiva Rakauskaitė, the partner and manager of Aneli Capital, a company that manages a €35 million fund for early-stage Central and Eastern European startups, there are strong similarities between today’s AI-driven investment boom and the dotcom bubble in the early 2000s, leaving many startups exposed. She expects an AI bubble burst in 2-3 years, as she tells Digital Journal.

“Many AI startups that can’t yet generate revenue will fail, but we’re reaching a consensus on that in the market. While the same risks persist in humanoid robotics, many investors tend to overlook this,” says Rakauskaitė. “However, it is important to distinguish robotics from humanoid robotics; industrial and logistics robots already generate revenue and can deliver measurable results, while humanoids can’t yet prove their commercial value.”

As examples, companies around the world are demonstrating prototypes of robots performing actions from running to boxing, seeking to spark interest from users and investors. Yet, in the real world, Rakauskaitė sees very few practical commercial applications.

Similar challenges also persist for industrial humanoid robotics. These companies face challenges with inference (ability to make decisions in real time), dexterity (how well the robot can physically handle things), reliability, and cost, which limit the initial use cases to factories and warehouses with predictable sets of tasks, notes Rakauskaitė.

According to Rakauskaitė, especially now, when investments are driven by hype, investors should not forget the fundamentals and prioritize revenue-first philosophy, where real money matters more than growth at all costs. 

“Investments in robotics and AI are crucial for the future development of humanity. But investors should remain disciplined and back companies that have realistic goals based on economics, not hype. From day one, startups should aim for early revenue streams through licensing, partnerships and have a clear model of monetization in the near future. The same revenue-first philosophy can be applied to any field,” Rakauskaitė explains.

Despite early signs of a bubble in humanoid robotics, Rakauskaitė remains confident in the broader robotics sector, where cheaper hardware and rapid advances in AI are accelerating real-world deployment.

According to Rakauskaitė, robotics is an especially promising field for the CEE startups. This region, Rakauskaitė points out, is located close to Germany, the largest industrial robotics market in Europe, which provides a major strategic advancement to scaling.

“The region also has lots of hidden talent. That’s why we dedicated our new fund for this region, aiming to support the talented founders with hands-on guidance and quick decision-making. Many hype-driven investors pull back once the hype fades. Yet to create real innovators, VCs must support them through their full journey. That’s exactly what we are going to do,” Rakauskaitė concludes.