Physical AI and robotics is a material percent of my portfolio now, yet it feels like the trend is still drastically undervalued and misunderstood.
An investor has allocated a significant portion of their portfolio to physical AI and robotics, believing the trend remains substantially undervalued and misunderstood by the broader market.
Background
- The author is Anthony Pompliano ("Pomp"), a well-known crypto and tech investor, former Facebook product manager, and co-founder of Morgan Creek Digital. He regularly posts investment theses to a large Twitter following.
- "Physical AI" refers to artificial intelligence that operates in the real, three-dimensional world — i.e., robots, autonomous vehicles, drones, and industrial automation — as opposed to "digital AI" like chatbots or image generators that exist purely in software.
- Robotics has historically been a difficult investment category (hardware is capital-intensive, margins are thin, cycles are long), but recent advances in AI models, sensors, and cheaper components have led many tech investors to argue that "embodied AI" is about to follow a similar exponential curve as large language models did.
- Pompliano's point is that despite his conviction, the broader market has not yet priced in this shift, which he sees as a classic early-stage opportunity.