FinSight Ventures has launched a $100 million Physical AI Index Fund, describing physical AI as the third structural wave of artificial intelligence. The San Francisco-based firm, which manages more than $1 billion in assets, says the fund is the first institutional vehicle dedicated exclusively to AI systems that interact with the physical world.
The fund will target a concentrated portfolio of 10 to 12 leading companies across four segments: robotics, AI for science, the foundation layer, and hardware and infrastructure. It aims for an aggregate target capitalization of $5.7 trillion by 2031, betting automation will scale beyond assistants such as ChatGPT, Claude, and Gemini.
Founder and General Partner Alexey Garyunov framed the bet in demographic terms. Citing United Nations projections, FinSight notes that the working-age population across East Asia, Europe, and the United States will contract by 342 million people by 2050. With migration slowing and labor participation already high in advanced economies, the firm argues that automation through physical AI is the only channel with growing capacity to close the gap.
The market context is striking. PitchBook data cited by FinSight shows physical AI’s share of global venture financing rising from 0.8% in 2016 to 12% in 2025, with investment reaching $72.2 billion in the first half of 2026 alone. The firm also points to converging technologies: world models for robot training in simulation, vision-language-action models that let one system see, understand language, and act, and a maturing electric vehicle supply chain cutting hardware costs.
FinSight previously launched a Gen AI Index Fund that invested in 13 companies, including Together AI, Crusoe, and Glean. Its new fund bets that the next phase of AI value will be created not just in conversation, but in warehouses, factories, laboratories, and streets.
Source: GlobeNewswire
