727 FinanceAround embodied intelligence, the capital market has already launched a contest over the future ahead of time. Now, a new divergence is emerging in this contest: some are still willing to pay higher prices for the distant future, while others have begun to re-examine how much of today's valuation can actually be realized.
Author: Zen, PANews
Two star companies in the robotics industry have recently delivered important news in succession.
On October 27, Bloomberg reported that Physical Intelligence, a U.S. robotics AI startup, is in talks to raise at least $1 billion in funding at a target valuation of about $20 billion. The company, founded just over two years ago, currently has no revenue.
A day later, Unitree Robotics, which has already listed on the STAR Market, released its third-quarter financial report. Revenue for the first three quarters reached 1.817 billion yuan, up 55.71% year on year, while net profit in the third quarter fell 17.37% year on year.
Compared with many robotics startups that have yet to establish stable sales, Unitree has already achieved preliminary commercialization results. In 2025, the company sold more than 5,000 humanoid robots and achieved profitability. Yet these results still look thin in front of the capital markets: as of October 29, Unitree's total market capitalization reached 267.9 billion yuan, about 158 times its revenue for the previous year.
The two companies represent two technology routes—general-purpose AI models and robotic hardware manufacturing—but they face the same reality: their existing commercialization results remain far removed from the valuations the capital markets have assigned them.
Unitree Has Sold Thousands of Robots, Yet Still Cannot Support a Valuation in the Hundreds of Billions
On August 19 this year, Unitree Robotics officially listed on the STAR Market. Its opening price on the first day reached 1,100 yuan, up nearly 630% from its issue price of 150.80 yuan, and its total market capitalization once exceeded 440 billion yuan.
The stock price then fell all the way from its high, dropping to an intraday low of 404.03 yuan on October 15, more than 60% below its opening price on the first day of listing. Just one week later, the market reversed again: the stock hit the daily limit up on October 23 and continued to surge 7.69% on October 26. As of October 29, the stock price had recovered to 662.39 yuan, with a market capitalization of about 267.9 billion yuan.
In just over two months, Unitree's market capitalization has experienced swings of hundreds of billions of yuan, while the company's fundamentals during the same period did not change enough to explain such violent fluctuations.
The third-quarter financial report released on October 28 shows that Unitree's revenue for the first three quarters was 1.817 billion yuan, with net profit attributable to shareholders of 387 million yuan. Third-quarter revenue was 665 million yuan, up 69.93% year on year, while net profit fell 17.37% year on year to 113 million yuan.
It is worth noting that the 270.54% year-on-year increase in net profit attributable to shareholders for the first three quarters was also affected by a one-time share-based payment expense in the same period last year. Because Unitree increased capital in an employee stock ownership platform at a low price, it recognized a one-time share-based payment expense of about 349 million yuan in 2025, lowering the profit base for that year. Excluding non-recurring gains and losses, the company's net profit attributable to shareholders for the first three quarters of this year actually fell 18.78% year on year, and net cash flow from operating activities also fell 54.69%.
One important factor creating profit pressure is increased R&D investment. In the third quarter, Unitree's R&D investment reached 127 million yuan, up 249.58% year on year, with funds mainly directed toward embodied intelligence models, computing power, and new product R&D.
In terms of operating scale, Unitree is already at the forefront of the global humanoid robotics industry. In 2025, the company achieved revenue of about 1.699 billion yuan, of which humanoid robots contributed 868 million yuan and quadruped robots contributed 698 million yuan. Full-year humanoid robot shipments were 5,511 units, with actual sales of 5,215 units.
However, compared with a valuation in the hundreds of billions of yuan, these revenues remain insignificant. Based on the market capitalization of about 267.9 billion yuan on October 29, even if revenue for the first three quarters of 2026 is simply annualized to 2.423 billion yuan, Unitree's price-to-sales ratio would still be about 111 times, and its price-to-earnings ratio based on annualized net profit attributable to shareholders for the same period would be about 520 times.
Unitree itself has also issued a warning about valuation risk. In an announcement on abnormal stock price fluctuations released on October 27, the company disclosed that as of October 26, its trailing price-to-earnings ratio had reached 465.22 times, far above the average of 38.54 times for the general equipment manufacturing industry. Unitree also reminded investors that the humanoid robot industry is still in the early stage of commercialization, and that if the pace of large-scale application falls short of expectations, there is a risk of valuation regression in the future.
Zero Revenue, $20 Billion Valuation: Silicon Valley Capital Bets on the Robot "Brain"
Unitree at least already has real revenue and profit, while Physical Intelligence's valuation is almost entirely built on imagination about the future.
Founded in 2024, the company's core team comes from institutions such as Google DeepMind, Stanford University, and UC Berkeley, and its goal is to develop general-purpose AI models that can adapt to different robotic hardware.
In November 2024, Physical Intelligence completed a financing round of about $400 million at a valuation of $2 billion. In November 2025, its valuation rose to $5.6 billion, and earlier this year it was raised again to $11.5 billion. Now, a new round of financing negotiations is trying to push its valuation to $20 billion. If the deal is completed smoothly, Physical Intelligence's valuation will have grown nearly tenfold in just two years.
Even more surprising is that Physical Intelligence currently has no revenue. The company is highly sought after mainly because of the potential commercial value of its general-purpose robot foundation models.
At present, most robots still require programs and trained control systems developed for specific tasks. Physical Intelligence hopes to use vision-language-action models (VLA) to enable robots to complete operations based on visual information and human instructions, and to transfer learned skills to different tasks and devices. Simply put, it is trying to provide a shared "brain" for robots from different brands.
In recent years, Physical Intelligence has successively launched series models such as π0 and π0.5, demonstrating operational capabilities such as clothes folding and item organization. On October 13 this year, Physical Intelligence also opened a beta version of the Pi API, allowing external developers to upload data, fine-tune models, and run them on their own robots.
Physical Intelligence has also begun exploring commercialization, having partnered with companies such as Weave Robotics and Ultra to conduct real-world tests in scenarios such as laundromats and e-commerce order packaging.
However, completing a technology demonstration, achieving actual deployment, and generating sustainable revenue are three completely different stages. Physical Intelligence has not yet disclosed a mature commercial pricing system, and the model's cross-hardware adaptability, long-term operational stability, inference costs, and customers' willingness to pay all still need further verification.
Yet at a $20 billion valuation, even if the market is willing to assign a 20x price-to-sales ratio in the future, Physical Intelligence would still need to generate $1 billion in annual revenue. For a company with no revenue, this means it must move from technology R&D to product sales, and then expand model services to enough robots and application scenarios.
Venture capital naturally tends to seek out the next-generation technology platform in advance. Silicon Valley capital's continued bets on AI foundation models have also given companies like Physical Intelligence ample funding support.
The only question is whether the robotics industry will form a large-scale third-party model market in the future, and how much revenue Physical Intelligence can capture from it. At present, there are no clear answers.
Behind the Hundreds-of-Billions Valuation: The Capital Climate for Embodied Intelligence Has Changed
The core reason supporting the high valuations of robotics companies is a potential market of extremely large scale. In addition to optimistic expectations for the industry's prospects, the capital market's own trading mechanisms have also amplified robotics companies' valuations to a certain extent.
Unitree's shareholding structure is particularly noteworthy. According to its listing announcement, the company's total share capital after issuance is about 404 million shares, and only 30.0877 million shares, or 7.44% of total share capital, were freely tradable at the initial stage of listing.
As of October 29, although Unitree's total market capitalization reached 267.9 billion yuan, the market value corresponding to unrestricted tradable shares was only about 19.9 billion yuan. The limited float amplifies the stock price's sensitivity to changes in capital supply and demand, and has also caused Unitree to experience violent market capitalization fluctuations after listing.
Physical Intelligence, by contrast, is in a different market environment. As an unlisted company, its valuation is mainly determined through negotiation among a small number of investment institutions. Even with no revenue, as long as investors are willing to pay for future technological potential, its valuation has a chance to keep rising through successive financing rounds.
Over the past two years, this logic has driven robotics companies' valuations steadily higher. And as the market entered the second half of 2026, the capital market's attitude toward embodied intelligence also began to show some subtle changes.Across global markets, capital continues to pour in. According to statistics released by Crunchbase on October 27, global robotics startup funding reached $9.9 billion in the third quarter of 2026, more than double the same period last year. Cumulative funding for the first three quarters of this year grew by approximately 185% year over year, with China and the United States remaining the two largest funding markets.
The pace of valuation and capital growth has also raised market doubts about valuations. On September 21, Reuters reported that Chinese regulators have adopted stricter scrutiny of IPO applications from some humanoid robotics companies. In addition to excessively high valuations, regulatory officials are particularly focused on whether revenue that some companies derive through local government-supported data collection centers and joint venture projects can represent sustained commercial demand from independent customers.
One investor interviewed revealed that valuations of some embodied intelligence projects in the primary market have already been cut by 30% to 50%. Another source even estimated that, if revenue brought in by data collection centers were excluded, valuations of some robotics companies could fall by 60% to 70%. These are industry insiders' estimates, and there is not yet sufficient public financial data to independently verify them.
This valuation controversy is not unique to the Chinese market. U.S. humanoid robotics company Agility Robotics previously announced plans to go public via SPAC at a transaction valuation of about $2.5 billion. However, documents it filed with the U.S. SEC show that the company's 2025 revenue was only about $1.78 million, with an operating loss of about $140 million. Even after deploying robots in real warehouse environments, the company's revenue remains far from enough to support a valuation of several billion dollars.
Money is still flowing continuously into the robotics industry, but more and more investors are beginning to ask more carefully about these companies' business models and potential, and whether they can support today's high valuations in the future. Valuations that were once driven up by successive funding rounds are now beginning to face scrutiny from financial data and the public markets.
Leading companies such as Unitree and Physical Intelligence remain at the center of this capital boom, while some other startup robotics companies have already begun to encounter valuation cuts and stricter financing reviews.
A recent investigative report by Hard Kr, under 36Kr, revealed many details of this shift: some leading institutions that previously invested actively in embodied intelligence have begun to tighten funding, and some financial advisors (FAs) are no longer willing to take on robotics financing projects. Deals that might have been completed in one month in the past now take three to six months.
In addition, according to a Securities Times report on October 29, over the past two months, early shareholders of some embodied intelligence companies have begun transferring old shares at a discount, with quotes only 65% to 80% of the valuation from the previous funding round, including even some leading companies.
Technical competition in embodied intelligence has only just begun, yet the capital market has already launched a contest over future profits.
Now, this contest is showing new divisions: some are still willing to pay higher prices for the distant future, while others have begun to re-examine how much of today's valuation can actually be realized.